2010 Cavs salary cap projections - based on the trades we might make this summer

[Joel]

Much of the discussion on RCF these days centers on possible trades we might make this summer. I ran the salary cap numbers for the Cavs in the summer of 2010, based on the potential trades that are being considered.

I included the following assumptions:

1. I assume that we re-sign LeBron James. Obviously, the point of this exercise is to examine what our roster might look like on the assumption that LBJ stays.
2. I project that the Cavs will re-sign Andy, and that his salary will be $7.5M in 2010. This represents what would seem to be a median projection.
3. I assume that we pick up the 2010 option-years for Delonte West, J.J. Hickson, and Darnell Jackson.
4. We will have another first-round pick in 2009, and I guesstimate a salary for him of $0.85M.
5. I do not include second-round picks either from 2009 or 2010, figuring that these players will have salaries close to the minimum salary anyways. Keep in mind that we will have a few salary cap holds that will cut into our cap room under each of these scenarios, too.
6. If we assign a player to a multi-year MLE contract this summer, then we will need to include another salary of about $6M for 2010.
7. Keep in mind too that if we re-sign Z for anything more than the veterans' minimum for 2010, his number will be included as well. To get to these salary cap numbers, we would have to renounce Z. If we do not renounce Z, he will have a large cap hold until he signs a contract.

PROJECTION - CURRENT 2010 CAVS ROSTER
LeBron James - $17.15M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $46.58M

PROJECTION - CURRENT 2010 CAVS ROSTER, BUT WITH A 2009 MLE SIGNING ONLY
LeBron James - $17.15M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
2009 MLE Signing - $6M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $52.58M

PROJECTION - WALLACE-PAVLOVIC / SHAQ TRADE
LeBron James - $17.15M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $46.58M

PROJECTION - WALLACE-PAVLOVIC / CHANDLER-POSEY TRADE
LeBron James - $17.15M
Tyson Chandler - $13.15M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
James Posey - $6.48M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $66.21M

PROJECTION - WALLACE-PAVLOVIC-BOOBIE-JJ / AK-47-BOOZER TRADE
ASSUMPTION: Boozer signs a contract starting at $12.67M in 2009-2010, projecting to a 2010-2011 cap number of about $14M.
Andrei Kirilenko - $17.82M
LeBron James - $17.15M
Carlos Boozer - $14M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Delonte West - $4.50M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $72.86M

PROJECTION - WALLACE / VINCE CARTER TRADE
Vince Carter - $17.52M
LeBron James - $17.15M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $64.07M

PROJECTION - WALLACE-PAVLOVIC / JEFFERSON-VILLANUEVA TRADE
ASSUMPTION: Villanueva signs a contract starting at $7M in 2009-2010, structured in a way in which I guesstimate a 2010-2011 cap number of about $7.5M.
LeBron James - $17.15M
Richard Jefferson - $15.20M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Charlie Villanueva - $7.5M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $69.28M

PROJECTION - WALLACE-PAVLOVIC / KAMAN-CAMBY TRADE
LeBron James - $17.15M
Chris Kaman - $11.3M
Maurice Williams - $9.30M
Anderson Varejao - $7.5M
Delonte West - $4.50M
Boobie Gibson - $4.02M
J.J. Hickson - $1.53M
2009 1st round pick - $0.89M
Darnell Jackson - $0.85M
2010 1st round pick - $0.85M
TOTAL - $57.88M

SOURCE FOR SALARIES

ANALYSIS
I previously discussed the projected salary cap for 2009-2010 and 2010-2011 here.

It should be quite clear that the only way in which we will have any salary cap room in the summer of 2010 is to take on players with expiring contracts this summer - Shaquille O'Neal, Marcus Camby, Mike Miller, etc. Any acquisition of any player with a significant multi-year contract means that we will not have money available in the 2010 free agent market. Even if we simply sign a player in 2009 for the MLE, we will likely not have enough money under the salary cap to be significant players in the 2010 free agent market.

It is in this context that one can see the point of the Shaquille O'Neal trade discussions. If the Wallace-Pavlovic / Shaq trade happens, it is a clear signal from management that we will try to be players in the 2010 free agent market. A trade for Shaq would be followed by a one-year MLE offer to a veteran, such as Rasheed Wallace or Jason Kidd. Management would be saying that our best chance to be competitive in 2009-2010 while still maintaining salary cap flexibility in 2010 would be to add a Shaq-Sheed combination.

On the other hand, if management opts instead for a trade for a player with a multi-year contract, then they anticipate that the player(s) they received in the trade is anything that they could receive in the free agent market this summer.

If any other (reasonable) trades are floated, I'll crunch those numbers later...

Our only means of maintaining salary cap flexibility next summer is to acquire expiring contracts only now. I'm not arguing for or against either strategy here; I'm simply crunching the numbers, in the context of what Ferry/management is probably thinking right now. Make of that what you will, in your trade discussions.

 

[chiefwahoo]

Good info, but this cannot be in Cavs Talk since it contains so many hypotheticals...

 

[Joel]

Good info, but this cannot be in Cavs Talk since it contains so many hypotheticals...

Fair enough; I intended it more as a salary cap implications discussion thread than a trade rumors thread, but I guess it's a little of both. So either forum is fine by me.

 

[mixman]

In your best case scenario for Free Agency of 2010 (Wallace - Sasha for Shaq) We're at best 10-12 million under the cap. Max free agents will want more than that. So we don't really stand a good chance of getting anyone worth a Max contract in Free Agency.

 

[Lee]

So in your scenerio you expect Z to retire? We will need to resign Z before any free agents as surely his next off the bench cotnract will not be starter center money but his caphold will be around 15 million. If we renounce his rights, use 100% of the free agent money on a player. we will only be able to sign Z to vet min.

 

[BooyaCS]

We also have to take into consideration the long term effects as well. I would rather have a title contending team that can win it all rather than worry about cap space in 2010.

That being said that is why I don't think SHAQ should be option 1. Yes he is a big expiring contract but it does nothing to help us with the goal of winning multiple titles.

I would rather try to get a Chandler/Posey deal done, sign either Sheed or Chris Anderson to some or all of the MLE and use the BAE on a guy like Joe Smith or Grant Hill.

 

[Joel]

In your best case scenario for Free Agency of 2010 (Wallace - Sasha for Shaq) We're at best 10-12 million under the cap. Max free agents will want more than that. So we don't really stand a good chance of getting anyone worth a Max contract in Free Agency.

That's exactly right, and that's the other point to be made here too. We are very unlikely to be able to sign a player to a maximum contract in the summer of 2010. Granted, there are a few things that we could do to improve our salary cap situation even further; we could renounce Delonte West's player option for 2010-2011, for example. (I just threw up a little in my mouth when I typed that, but still. We could do it. And if the prize was Bosh, well...)

Still, if we had $10M-$12M under the cap, then we could offer a free agent contract of 5Y, $58-$70M. So the question is whether that would land us a free agent of a better quality that we could obtain in free agency this summer.

So in your scenerio you expect Z to retire? We will need to resign Z before any free agents as surely his next off the bench cotnract will not be starter center money but his caphold will be around 15 million. If we renounce his rights, use 100% of the free agent money on a player. we will only be able to sign Z to vet min.

Right, and so the other question here is Z. I will simply make the point that any attempt to get under the salary cap next summer means either that we will renounce Z, or that Z will have to agree to a very small contract - perhaps the veterans' minimum - next summer. The question becomes whether that's worth it.

With this thread I'm simply trying to guess what Ferry/management is thinking right now. There are scenarios in which we can get under the salary cap next summer, and there are scenarios in which we could (probably) improve our team for next year and still preserve salary cap space next summer. It's just a matter of whether we can improve our team by signing a probably-non-max-level free agent next summer, with all the things that come with it (like renouncing Z) - or whether it's better to swallow hard and forgo salary cap room next summer, and make a trade for a better player with a longer contract now.

 

[Lee]

Anyone that is a regular here knows I have been saying for about 2 years now that we wont be getting a major free agent in the summer of 2010 besides Lebron. One of the reason for this is because to have the money we need we will leave the cubbards so bare that Lebron wouldnt want to resign. The only way to add major talent now and next summer is through trade and draft. Free agency will be used for complimentry pieces like Joe Smith or I thought Pietrus would have been perfect last summer. I am not saying we cant get another all star...just not as a free agent. No money. and besides. free agents never leave during the peak...they always take max money. (shaq 12 years ago last exception)

 

[D-westfan]

there's also cap holds up to 12 players i think..

 

[mixman]

there's also cap holds up to 12 players i think..

You're correct, I believe they're at the rookie min, so add another 1-2 mil onto that for almost every scenario.

 

[D-westfan]

Question though, is it possible to structure varejao's contract ext to maintain as much cap space as possible in 2010?

E.g.

6.5 first year, 5.5 second year (2010), 7.5, 9.5... (average of about 7 mil per year)

 

[wackersr]

Question though, is it possible to structure varejao's contract ext to maintain as much cap space as possible in 2010?

E.g.

6.5 first year, 5.5 second year (2010), 7.5, 9.5... (average of about 7 mil per year)

No... They need to make a decision this offseason of AV is part of the core or not. If they sign him, it will be for $ much higher than you are predicting.

 

[Joel]

Question though, is it possible to structure varejao's contract ext to maintain as much cap space as possible in 2010?

E.g.

6.5 first year, 5.5 second year (2010), 7.5, 9.5... (average of about 7 mil per year)

The answer is yes, but not at the numbers that you are predicting. We know that a contract can include "escalators" of 10.5% per year, as calculated over the base contract. I have never seen a published number on the limit of "de-escalators," but I guess we might assume that this would also be on the order of 10.5%.

But yes: if we were going to sign Andy for 4Y, $32M, we could structure his contract as something like $8M/$7.24M/$8M/$8.76M, thus giving us a slightly smaller cap number in 2010. If we offered him a 5Y or 6Y contract, then we could obviously start at a smaller number, but we would be tied to him for a longer time.

 

[Phills14]

Thanks for this post man. Great stuff. As we sit right now, we don't have a max contract to offer in the 2010 summer. Now that can change but as of now we don't have what people think we have.

It might be time to cash in the chips and leave no doubt to Lebron that this team will be good for MANY years to come.

-Greg

 

[D-westfan]

The answer is yes, but not at the numbers that you are predicting. We know that a contract can include "escalators" of 10.5% per year, as calculated over the base contract. I have never seen a published number on the limit of "de-escalators," but I guess we might assume that this would also be on the order of 10.5%.

But yes: if we were going to sign Andy for 4Y, $32M, we could structure his contract as something like $8M/$7.24M/$8M/$8.76M, thus giving us a slightly smaller cap number in 2010. If we offered him a 5Y or 6Y contract, then we could obviously start at a smaller number, but we would be tied to him for a longer time.

Better to offer him that longer contract, save 2 million in the year we'll have cap space (Maybe cut Darnell and offer someone like wally the vets min.. save as much money as possible, get roughly 13-14 million cap space.. make the best of it..

http://www.hoopsworld.com/Story.asp?story_id=9031 (some names changed based on contractual changes...)


Basically, imo, if we can get enough cap room, we can upgrade our team much better than we can through trading away our expirings;