What Is The Celtics' Salary Cap Situation?

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http://celtics.realgm.com/articles/367/20090202/what_is_the_celtics_salary_cap_situation/

What Is The Celtics' Salary Cap Situation?


There is an occasional theme on Celtics websites of pondering if and how they
could become players in the much-vaunted 2010 free agent market. Can the Cs
get below the salary cap sufficiently to make a play for a superstar?

There is a great deal of confusion about how the salary cap works and what
the rules are for determining what is included in a team’s salary total.

To help clarify matters I have done some research and consulted with experts
like Larry Coon, author of the unrivaled NBA Salary Cap FAQ. Here is my
report.

I confess at the outset that the very idea that the Celtics could get far
enough below the salary cap to have sufficient capspace to sign a
maximum-salary free agent seemed absurd on its face. Just adding up the
contracts of the players under contract in July 2010 gets you close to the
salary cap as is. That doesn’t even include the possibility of re-signing
Ray Allen or any of the young players. And when one considers that Danny Ainge
’s first priority is to contend while his veteran team is still in its
prime, there would be great incentive to use the mid-level exception free
agent slot in the summer of 2009 to sign a quality veteran who could help the
team off the bench. A player like this, say a Drew Gooden or Ron Artest or
Ben Gordon or Lamar Odom or Chris Andersen, would require a multi-year deal
that would all but blow-up any chance of getting beneath the cap in 2010.

This would be Plan A. Play to win now, and do not sacrifice the present for
the future.

But we know by Danny’s unwillingness to sign James Posey to a four-year deal
at the mid-level rate that he will not sacrifice the future for the present
either. He is always thinking two or three moves ahead. You have to think if
there is a path to get the Celtics a LeBron James or a Dwyane Wade in 2010,
Danny Ainge will move heaven and earth to find it.

So let’s consider the plausibility of a Plan B. Let’s try to see if there
is a way for the Celtics to get beneath the cap in 2010 that does not
compromise the team’s ability to contend this year or in 2009-10. I am
relying on the salary information from three websites; I doubt it is precise
but after cross-checking I think it is close enough for our purposes.

Now we have to start with two often misunderstood rules about the salary cap.
First, and most important, a team’s unsigned free agents count against the
cap. This prevents teams from keeping its own free agents unsigned to get
beneath the cap, so it can sign an expensive player, and then go way over the
cap by signing its free agents. To give this provision muscle, the salary
amounts for unsigned free agents tend to be much higher than their last
salary.

Brian Scalabrine, who earns $3.4 million in the last year of his contract in
2009-10, will count as a free agent against the Cs salary cap in 2010 for a
whopping $6.8 million. This forces teams seeking to clear capspace to either
sign their free agents, let other teams sign them, or simply renounce them to
get them off the books. If a team renounces a player, it cannot then sign
him, except (with a few exceptions irrelevant to the Cs situation) at a
minimum contract level.

Second, not only does the league determine a team’s salary total for cap
purposes by counting all players under contract and including unsigned free
agents. It also insists that there be 12 players accounted for, so if a team
has less than 12, the league adds in the additional salaries at the league
rookie minimum to get a team to a 12 player roster. The rookie minimum salary
will be around $500,000 in 2010-11.

So if a team had no players under contract and no free agents, the NBA would
show it with a salary level of $6 million.

Now let’s see where the Celtics stand salary-wise come the anticipated
summer of 2010.

Here are the firm contracts the Cs have for the 2010-11 season:

Kevin Garnett: $18.8m
Kendrick Perkins: $4.9m
Paul Pierce: $21.5m

That comes to: $45.2 million.

The Cs have options that year for Bill Walker and JR Giddens. Let’s assume
the Cs exercise those options for 2010-11.

J.R. Giddens: $1.1m
Bill Walker: $0.9m

That takes us to five players and a cap total of $47.2 million.

Then we have to deal with our two restricted free agents in the summer of
2009, Big Baby Davis and Leon Powe. If the Cs were not planning to contend in
09-10 it might be wise to let these guys go to create capspace. We are
planning to contend, so I imagine Danny will work to keep them. As restricted
free agents, Powe and Davis can solicit contracts from any team in the league
and then the Cs have a right to match them. Powe and Davis will not be
willing to settle for one-year deals, unless they are insane.

What are Powe and Davis worth? That is very hard to say, and their value this
season already has more gyrations than Oprah’s waist line. Looking at
players in a similar situation in the summer of 2008, I think Powe and Davis
are worth more than Sebastian Telfair and less than Ryan Gomes. So, for our
purposes, let’s say Danny signs them to three-year deals, and for 2010-11
they are each under contract at $3 million.

Leon Powe: $3m
Big Baby Davis: $3m

That takes us to seven players and $53.2 million.

Now there is the matter of Rajon Rondo. This summer, in 2009, the Cs and
Rondo could negotiate a long-term extension to kick in starting in 2010-11.
The Cs might be willing to do that because they could get Rondo for less than
he would get a year later if he continues to improve. Rondo might do it for
the security. If the Cs and Rondo decide to do so, we are back to Plan A,
because the team will not be able to get under the cap no matter what. Once
Rondo gets his next contract, he will be getting paid an eight-digit salary.

So for Plan B to work, Rondo and the Cs have to let him complete his fourth
season and then become a restricted free agent in 2010. An unsigned Rondo in
the summer of 2010 will count three-times his 2009-10 salary, or $6.3
million, for salary cap purposes.

Rajon Rondo: $6.3m

That takes us to eight players and $59.5 million. (Now, mind you, if the Cs
are able to sign a free agent in the summer of 2010, the immediate order of
business thereafter would be to sign the restricted free agent Rondo to a
long-term deal.)

Now that leaves six players that the Cs will have who are free agents in
2010: Gabe Pruitt, Patrick O’Bryant, Eddie House, Brian Scalabrine, Tony
Allen, and Ray Allen. Recall, as with Rondo, each of these players count
against the 2010-11 salary cap for the Celtics at a much higher rate than
their 09-10 salary. The “cap hold” figure against the cap for T. Allen,
Scalabrine and House are over $5 million each so they have to be renounced.
Let’s assume that the Cs decide that one of Gabe Pruitt and Patrick O’
Bryant show sufficient promise that the Cs do not renounce him. For our
purposes, let’s assume it is Gabe Pruitt. Therefore we assume Patrick O’
Bryant is renounced.

Gabe Pruitt: $1.6m

That takes us to nine players and $61.1 million.

And this means we have to renounce Ray Allen, too. He counts as a max
contract against the cap until he is resigned for less, signed by another
team, or renounced. Nice knowing you, Ray.

Then, finally, the Cs will have a first round pick in the 2010 draft. Unless
the Cs trade the pick for a future pick or renounce the pick – unlikely –
 it will count against the cap. For our purposes, let’s assume it is a low
pick and the cap hit will be $1.2 million.

No. 1 pick: $1.2m

So that takes us to a roster of ten players and a cap payroll of $62.3
million.

For the finishing touch, we have to add in two more rookie minimum contract
players to account for slots 11 and 12.

Minimum-salary player, roster spot #11: $0.5m
Minimum-salary player, roster spot #12: $0.5m

That takes us to a roster of 12 players (for cap purposes) and a payroll of
$63.3 million.

The Cap will be no more than $61 million in 2010-11, if even that high in the
midst of a depression. This seems to foreclose the idea of getting under the
cap if we wish to contend.

But, to put the matter to rest once and for all, let’s see how far below the
cap the Celtics could get if Danny became obsessed with the idea, yet still
wanted to contend in 2009-10.

This is what he could do. (Remember, we can remove salaries, but, when we do,
we have to add in $0.5 million to account for a minimum salary roster spot.)

First, the Cs would have to sign a veteran big to a one-year MLE deal in
2009, say a Rasheed Wallace, and then let either Powe or Big Baby leave.
Assuming Wallace is renounced in 2010, we now have the cap total down to
$60.8 million.

Then, maybe go ahead and renounce Gabe Pruitt and trade the 2010 no. 1 pick
to someone for a future no. 1 pick, or whatever we can get down the road.
That gets the cap total down to $59 million.

Likewise, do not pick up the options in Bill Walker and J.R. Giddens. That
gets the salary cap total down to $58 million.

Then, the biggie. Paul Pierce is owed $21.5 million in 2010-11. But Pierce
also has the right to opt out of his contract. Have Pierce opt out and then
immediately sign a new four-year deal with the Cs starting at $10 million in
2010-11, with annual million dollar raises. So Paul sacrifices $21.5 million
in one season to get $46 million for four seasons. Would he do it? Possibly.
If Paul plays out the original deal, he will become an unrestricted free
agent approaching age 34 in 2011. Will there be teams willing to give him a
three-year deal then worth $25 million? Possibly, but possibly not. Paul
might just like the security and the chance to finish his career in Boston.
And the prospect of getting another star on the team.

So Paul does that deal and we are down to $46.5 million, for a 12-man roster.
We are still a good four million dollars away from the max contract salary
that Wade, James, Bosh, Yao and the other free agents will be eligible to
command, and that many teams will be in a position to provide. We have no
reason to think any superstar will forgo what would be around $25 million
over the course of a contract to play in Boston. Especially to join a team
consisting of four other veterans and seven minimum wage players. (The Cs
would lose their MLE and other exceptions in order to get under the cap and
sign a free agent.)

There is no way Danny considers such an approach. It would be general manager
suicide.

Let’s purge it from our considerations. The Celtics will not be under the
cap in 2010.



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