Offseason Breakdown: The Cap

by Timothy Varner

There are a lot of things I want to talk about in the Offseason Breakdown series. And, judging from the comment thread under the first installment, you have a lot on your mind too. Here’s what’s ahead: my thoughts about what direction the team should go with its backcourt, how to address the small forward situation and special considerations for the 2009/10 season. But before we get to all that, we need to spend a little time discussing the salary cap. What follows is a framework for discussion, not an exact picture. It’s impossible to know the exact picture until after the league sets its 2009-10 cap parameters.

Earlier this season, I offered up a cap breakdown for your reading enjoyment.  Several months have passed and I was happy to see that Bruno from SpursTalk has done the same thing with a terrific post that improves on mine in every way.  Much of what follows is indebted to him. Here’s the skinny:

• The Tax Line Should Be Around 70 million, maybe a bit higher.
• There is no reason to believe the Spurs will exceed the tax threshold, so this is functionally a hard cap for San Antonio.
• The Spurs will have their MLE (5.8 ish), LLE (2 million) and minimum salary exceptions–825,000 or 457,000, depending on the player.  Obviously, these numbers are approximate.
• The Spurs must carry at least 13 players on their roster.

So, what’s the number? First, no matter how you break things down, the Spurs cannot get under the cap. The exceptions listed above represent their spending ability this summer. Second, the Spurs’ final cap number depends largely on 3 players: Michael Finley, Fabricio Oberto and Bruce Bowen.

Michael Finley has a player option that he must decide to pick up by July 1. That’s an important date. We’ll come back to it in a minute. But if Finley picks up his option, the Spurs are on the hook for his 2.5 million dollar contract. It’s also worth noting that the Spurs are not able to trade Finley without his consent.  The ball is in his court.

Fabricio Oberto has a partially guaranteed salary. This means that if he is waived by July 1, teams only have to pay him 1.9 of his 3.8 million dollar contract. In other words, there is a strong chance that he’ll either be traded or waived by July 1.

Similarly, Bruce Bowen is only owed half of his contract if waived by August 1. His full deal is worth 4 million, so that reduces his waived-by money to 2 million, for all you math wizards out there.

You’re probably starting to see why July 1 is such an important date. Here’s the last wrinkle. For trade purposes, the full contract number, not the partial guarantee number, is used for salary match purposes. As you know, team’s in the NBA must match salaries at 125% for a trade to be legal. The incoming and outgoing players must be paid essentially the same amount of money. This is why you see so many 2 and 3 for 1 deals in the NBA. It’s about getting the math to work.  But in reality, team’s are only taking on 3.9 (rather than 7.8) million if they trade for Bowen and Oberto before July 1.  If they give up a player who is owed, say, 25 or 30 million, over the next 3 years, that’s a huge cap coup. The Spurs actually have about 29 million in expiring contracts, but only Oberto and Bowen are partially guaranteed.

If the Spurs trade Oberto and Bowen prior to July 1, the receiving team would waive them and pocket huge savings. If the Spurs can’t find a trade partner, we should expect to see them waive Oberto and Bowen. In both cases, we should expect the Spurs to be active between now and July 1. It will be a busy summer, early and often.

So assuming Finley picks up his option and Bowen and Oberto are traded or waived, the Spurs cap number is at about 65 million for 9 players. Assuming the tax line comes in at 70 million-ish, the Spurs can at least spend most of their MLE. If Finley doesn’t pick up his option, the Spurs will have all their exception money available without fear of incurring a tax penalty. As a fan, you should want Finley to forgo his 2.5 million and retire and the tax line to be set at a number closer to 71 million. Every dollar it comes in beneath that number will effect the Spurs ability to sign free agents with their exception money. We won’t have a final number from the league for a couple months. And the Spurs will have to field a team of at least 13 players.

Also, it’s worth noting that if the Spurs were to move into the first round of the draft, whomever they select would count against the cap. I can’t see the Spurs doing this unless it is to draft and stash an international player. It would also cost them a player or some cash to get into the first round. I can’t see that either.  I’m sorry if this disappoints those of you who were hoping they’d move up to grab a player.

This is all necessary backdrop for the posts to follow. Leave your questions and comments below. Tomorrow, we’ll roll out our first draft preview. But chew on the cap today.