Cavaliers

Sure, The NBA is Back, but How Does it Affect the Cavs?

The National Basketball Association took the “11th hour” cliché to a whole new meaning this past weekend when a deadline deal to have basketball on Christmas Day leaked into the early hours of Saturday morning.  In principle, what we are left with is a season of NBA hoops, albeit a shortened one, that will include all of the bells and whistles of it’s regular brethren including an All-Star weekend, a postseason and a draft that is not in the determining hands of a Googlesque algorithm.

While Yahoo!’s Adrian Wojnarowski, CBS’ Ken Berger and the New York Times’ Howard Beck have been legitimate All-Stars in terms of keeping the world abreast of all of the details from Day One, the goal of this exercise is to answer all of the questions which could still be outstanding with regard to how the new NBA landscape will affect the Wine and Gold – niche entities get the luxury of such a myopic focus.

What follows are answers to the accumulation of all of the questions we have been pinged with via different mediums.  Any that go unanswered can certainly be added in the comments. We’ll do our best to address what we know. 

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Before we get into the specifics regarding the new Collective Bargaining Agreement, let’s take a look at what the Cavaliers’ payroll looks like as of today:

Player 2011/12 Salary
Antawn Jamison $15,076,715
Baron Davis $13,900,000
Anderson Varejao $7,950,000
Daniel Gibson $4,403,834
Ramon Sessions $4,257,974
Ryan Hollins $2,483,333
Omri Casspi $1,341,960
Christian Eyenga $1,097,520
Joey Graham $1,106,941
Alonzo Gee $884,293
Samardo Samuels $788,872
Manny Harris $788,872
Luke Harangody $788,872
Semih Erden $788,872
Total $55,658,058
Total Guaranteed $52,189,080

Alas, a few quick caveats: These figures are based on the full season compensation which was due to the players. Feel free to adjust accordingly for 20 percent game checks missed over the last several weeks, but if we’re talking percentages, this doesn’t matter all that much. The “total guaranteed” figure strips out the unguaranteed contracts of Gee, Samuels and Harris while adding in the $100,000 guaranteed amount due to Joey Graham. Graham’s contract was fully guaranteed if the player was not released by July 14, but this was post-lockout and how the league treats this remains to be seen.  For those looking for clarification on the expired Traded Player Exception, how the league handles the Graham situation could be akin to that of the potential extension; if Graham can be released sans ramifications, the TPE is is good as gone. Also, this serves as a reminder that both Luke Harangody and Semih Erden are still on the Cavaliers.

So, knowing where we stand, what does the new agreement do to our rookies?

Per the new CBA, rookie contracts will not be impacted.  Thus, the Cavaliers can expect to sign both Kyrie Irving and Tristan Thompson to deals that would cost approximately $5.5 million per player in 2011-12. Given this, we can add $11 million to each total, bringing the Cavs to $66 million and $63 million, respectively.

One of the concessions for the lockout to end was, despite the players only getting paid approximately 80 percent of their salary for this season, that the salary cap itself remains constant at $58 million – this “cap,” a soft one, is also expected to be present for the 2012-13 season though some projections have it increasing to roughly $61 million. As hard as it is to believe, the Cavaliers roster listed above, save for a few minor tweaks for roster-space reasons, will be close to – if not above – the 2011-12 salary cap.

First-round draft selections have their contracts fully guaranteed during the first and second year, with options abound for subsequent seasons.  Given where the Cavaliers project to be in 2012-13 (only $31 million guaranteed, excluding rookies), their reasons for not moving up into the first round for a third selection and trading the soon-to-be-extended JJ Hickson make financial sense for the long-term health of the franchise.

If the team is near or above the cap, what can they do in the free agent market?

The luxury tax line is expected to be, like the salary cap, similar to it was prior to the lockout and will come in somewhere in the neighborhood of $70 million.  Given that the Cavaliers are not above this line with the rookie contracts theoretically added to their present total, Chris Grant will have the ability to use his version of the Mid-level Exception.  Wherein teams that come in over the luxury tax line will have $3 million to use annually over three years, Grant and his below-tax counterparts will have up to $5 million to spend annually over four seasons, with the deal growing at three percent after the second year. If the team could drop below the salary cap figures (more on this later), they would be granted an additional $2.5 million exception that could conceivably put them over the cap.

The Cavs could place bids on the free agents of other teams where the new CBA would allow said team only three days to match offers.  This helps all parties as the ‘limbo’ period is drastically reduced.

As discussed around these parts several times, it is anticipated that the Cavaliers opt to bring back free agent shooting guard Anthony Parker – for his locker room presence as well as his ties to Omri Casspi via Maccabi Tel-Aviv – who would soak up a portion of the team’s MLE. Parker has a cap hold of $3.7 million (120 percent of his 2010 salary) as of today; it would be expected that he would sign for something close to the $2.8 million he was paid last season. This would leave the Cavs around $2 million of the MLE which they could spend as they see fit.

Given that the Cavaliers are not tax-payers as of present day, they would also be afforded the bi-annual exception which was present in the last CBA. It cannot be used in consecutive seasons and has a two-year cap starting at $1.9 million. The team used a portion of their bi-annual exception in 2009-10 when it re-signed Zydrunas Ilgauskas following his release from Washington, so their full BAE should be in tact for the coming season.

Free agency is slated to start on December 9.

What about all this “amnesty” stuff we’re hearing about?

Well, there are two different options here.  There is the much-discussed amnesty clause that will reportedly allow a team to completely wipe a player’s salary off of the books; this player has to currently be on the roster. There were hopes that this would be a coupon of sorts that an owner/general manager tandem could hold on to for a future addition gone awry, but that will not be the case as it can only be used on players who were rostered as of July 1, 2011.  It’s worth noting that players who are released via the amnesty clause will go through a “secondary waivers” system that will allow teams below the salary cap to bid after the player clears the initial waiver run.

Given that there is a salary floor as well as a cap (85 percent), teams that are vastly under the current cap – Denver, Sacramento, Indiana, Memphis, etc – to offer contracts to any of the players who are told ‘thanks, but no thanks.’  It is widely assumed that as many as three-to-six teams will actually take advantage of this provision as its largely used to avoid luxury tax situations. Alas, after hearing what the rule truly turned out to be, it’s getting a lot more run in media circles than may actually be deserved.

There is also a “stretch” provision, that will allow a team to release a player under contract while paying him his salary but only having him count against the books at a mathematically adjusted rate of twice the remaining deal plus an additional year.  For example’s sake, Baron Davis is due approximately $29 million.  If the team were to use this provision, he would be on the books for five years at $5.8 million per season. This provision can be used on a future contract.

The Cavs front office will undeniably have some decisions to make.  These have been laid out here and here. Rather than re-writing them, please feel free to check out the past publications while noting the current payroll discussed above.

After all of this lockout nonsense, are we finally free of players deciding where they can go while teaming up with friends and creating supergroups that would make Temple of the Dog blush?

No. Not at all.  If anything, player movement will now be increased due to the NBA’s ownership team looking to shorten the length of maximum contracts as well as potential exceptions and the league deciding that trades increase interest in the sport as it did this past season via television ratings as well as merchandising.  Increased trade volume means new jerseys that get to be racked in team shops across the nation, meaning increased revenue and more money to split. Everyone’s a winner, save for the guy who just purchased that Dwight Howard Orlando Magic jersey.

The much-discussed point of owners hoping to limit the sign-and-trade or extend-and-trade abilities of tax-paying teams was one of the last second concessions prior to the agreement getting done. LeBron-to-Miami and Melo-to-New York are deals that are just as possible this time around as they were in the not-so-distant past. Sure, it’ll cost these teams more money as the luxury tax implications are increasingly more drastic, but buying wins is still a possibility.

If there’s any good news to be had in the area of wheeling and dealing, non-taxpaying teams like Cleveland can now take back up to 140 percent plus $100,000 of any players they send out.  For example, if a team really wants Antawn Jamison’s glorious expiring contract, they Cavaliers could theoretically take up to $21.2 million in return. Tax-payers are restricted to 125 percent, meaning that if the roles were reversed and the Cavaliers were looking to acquire Jamison – as they were back in 2010 – they could now pay more to Washington than a team like the Los Angles Lakers.

If free agency doesn’t appear to be an option at this point, what else can the Cavaliers do to improve?

For this team to flourish in the future, they will need to draft well while making smart, strategic trades; acquire draft picks, hit on them and then make moves when the timing is right.  You know, how Oklahoma City, San Antonio and the notoriously tight-walleted Chicago Bulls have done it?

As far as fans and the front office is concerned, the only real untouchable player on the roster isn’t even signed yet, and that’s first-overall selection Kyrie Irving.  Sure, we can group Tristan Thompson in there, but I sense that the team would consider moving the highly athletic defensive specialist if the price was right.

Teams will likely inquire about Anderson Varejao, Ramon Sessions and Daniel Gibson.  Sure, two of the three are certainly fan favorites, but there’s a reason why other teams would covet them and their various sets of skill.  Varejao would take a king’s ransom and there is still some uncertainty as to the health of his ankle.  Gibson started off strong last season, but faded due to a bevy of injuries and off-court issues.  This leaves Sessions as a player who is inexpensive and could start for several other teams if not prove to be one of the premier back-up point guards in the league.

What these players could pull back in return remains to be seen.  Surely, the team would love to add additional first-round draft picks; Varejao would likely command at least a starting player as well.

Between Davis, Jamison, Irving and the rest, do the Cavs have what it takes to make the playoffs this season?

Stop it, already. Seriously.  The last thing this team needs to do is make the playoffs or – God forbid – fall just short.  This team will be building around Irving, Thompson and, to an extent, Omri Casspi.  If forgoing a season and drafting 22nd on an aggregate scale was bad, making the playoffs would be worse. Sure, Davis and Jamison could each be good for 20 points per evening, but this will do the team nothing two seasons from now.  The veterans will be here to teach and lead; winning will be the sole responsibility of Irving et al after a couple classes in Byron Scott’s School for the Athletically Gifted.

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  • stin4u

    This is good for one glaring reason, that we’ll have another high draft pick and not be forced into the aggregate model they had prepared.

  • Craig

    My thoughts exactly.

  • ClemJax

    I’ve asked this elsewhere, but haven’t gotten a real answer, so here goes…across the board the reaction to this deal is that the owners “won” and the players “caved.” Is this strictly because of the BRI decision, or is there some other details that caused this to be a rout for the owners? Because the way I’m reading this, there are little to no real changes to the systemic problems of the game – as Scott points out, some of those problems have the potential to get worse. Did the owners basically just trade minor changes to the system issues to get their BRI number and call it a day? If that’s the case, then the real losers are the fans.

    If the owners had a chance to improve competitive balance, tamp down on player movement fiascoes like those of the last few years, and overall increase the health of the game, and they just dumped any hope of that for more money, then I’m beyond fed up with the game, and there’s little to no chance of my coming back beyond the occasional “casual observer” role.

    Or am I completely misreading this and will this CBA really help to fix these issues and help the game?

  • -bobby-

    @ClemJax- I read this as the owners realized the trades/player movement=profit. So they increased that so they get mo money. I hope it backfires. Immediately it probably wont, but give it half way through and they could be struggling. Maybe not..

  • Andy

    The problem is that there is no real way to improve competitive balance. Numerous studies have shown this. All the things the owners proposed are ones that sound good in theory but dont actually accomplish much. The only true way to increase balance would be to literally change the fundamental rules of the game so it becomes more of a team game as opposed to a superstar one.

  • http://waitingfornextyear.com Scott

    ClemJax – it depends on what you consider to be the “systemic problems.”

    The owners do not see increased player movement as a problem, they’re the ones who wanted the shorter contracts from both a max perspective, as well as the MLE and extend-and-trade possibilities. So, for those who view the Cal Ripken/Reggie Miller days of sport as ideal, those days are long gone.

    What the owners hope is that with the increased player movement, all of the teams will have a chance to lure due to the high cost of going over the luxury tax. For instance, with the amnesty clause: only the teams below the cap can bid in the seondary waiver market.

    By in large, given that the NBA game can largely be won by one or two all-star players on the same roster, the game will (as it should) largely hinge on front offices and drafting. That’s as balanced as you can get.

    For now, we still have the select super teams; let’s be honest, the new CBA wasn’t going to retroactively disband these clown shows. The effects of the new deal largely won’t be felt for a few years. And I know ‘patience’ isn’t a popular term around these parts, but the only way we’ll see if it worked from a competitive balance standpoint is to reassess the landscape in three-to-four seasons.

  • C-Bus Kevin

    If what you say is true, that the owners decided that player movement is good for business, then I am extremely disappointed. Looking back on the glory days ofthe NBA (which are certainly behind them at this point), it’s clear to see that the most popular teams and players had longevity with their teams. Jordan, Bird, Magic, Malone, Stockton, Robinson, etc. all stayed with one team for the vast majority of their careers. Barkley, Drexler, Kareem, etc. only moved once (in Barkleys case, twice).

    Fans cheer for sports teams, in large part, because they “get to know the players” (and by ‘get to know’ I mean ‘get used to seeing them’). The NBA is losing me fast, and they’ll lose their youngest fans soon if they’re not careful. The notion that fans follow individual players rather than teams is false, and it will cost the NBA in the long run as one of their worst miscalculations.

  • ClemJax

    Scott…I’m good with patience and seeing what happens, and I’m not thinking that the CBA was going to go back and undo stuff, but to a certain level, there should be a bit about learning from mistakes. I’m with Kevin – I think the “increased player movement = better business” is going to be one of the most flawed models in any sport. It seems to suggest that because of the soft cap/hard floor, all teams will be able to compete in the high-end free agency market, when the last few years have demonstrated that to be utterly false. There’s nothing about that model that suggests the “less desirable” markets will have any luck in a) attracting or b) keeping their high profile players.

    When I refer to systemic stuff, there are a few easily identifiable things that were mentioned (perhaps as BS, but still mentioned) that would have gone a long way…stuff like franchise tags, or making a player take a haircut if they wanted to force a sign/extend-and-trade. If a player wants out, so be it…but there has to be an incentive structure that gives all teams an advantage on keeping their superstars. If Carmelo wants to leave Denver for a bigger market, cool, that’s his choice, but he shouldn’t have the option of dictating “this is HOW I’m going to a bigger market” and manipulating the rules designed to allow teams to keep their top tier players. If he wants an extend and trade, fine, but he has to take *much* lower than what he’d get if he stayed with his team. Similar argument on the franchise tag – hey LeBron, we know you’re going to be franchised, so let’s get you as large of a contract as possible, then use the fact that we know you’re not going anywhere to actually recruit other players to come play with you. If he wants out of Cleveland still, cool, that’s his choice, but he has to do it without the max contract sign-and-trade.

    I don’t see anything in this new CBA that addresses issues like this – the only couterargument I’ve seen is that “more money for teams and a punitive luxury tax means more competition for these players.” I think that’s a bit of wishful thinking.

    I’m with C-Bus Kevin – the league was best when superstars established dynasties in one city. I’d love to be wrong, but the idea of accelerating player movement just looks like an utter disaster waiting to happen.

  • Vengeful Pat

    @C-Bus Kev, I also think it’s a shame but I don’t know if I agree that NBA fans cheer for teams over players. We do because we tie ourselves to the city of Cleveland and have pride in that, but I think the majority of LeBron’s fans outside of Cleveland didn’t care that he left and are now loving him on the Heat. In other words, I don’t think the majority of fans in any major sport are loyal to teams… I think they’re loyal to winning and follow wins. The guys out at the bar who were wearing Dallas Cowboys gear in the 90′s are the same ones wearing Pittsburgh Steelers gear now and they’ll ride that train until the Steelers stop competing (if that ever happens). Likewise, you didn’t see hardly any Miami Heat gear until Wade/O’Neal won a championship, and then it was everywhere. Then it went away for a while as the Heat struggled. Now you see Heat gear everywhere again. It’s no coincidence. That gear will stop showing up everywhere when the team stops winning.

  • R

    Would it be that bad if we surprised everyone and played .500, won an 8 seed or just missed the playoffs?

    That would only be possible if Irving and Thompson have huge rookie years, which would also hint at a 2011 draft homerun.

    What would you rather have?

    a. .500-ish season + incredible optimism + 16th pick in 2012

    or

    b. 16-50 season + Questioning Chris Grant’s ability to draft talent + another run in the lottery to get a Barnes or Sullinger + hoping we don’t become the next Timberwolves

    or

    c. Somewhere in between + a top 14 2012 pick + cautiously optimistic that Irving/Thompson/??? will equal a winner down the road.

    I’m leaning towards the first choice. I want Irving and Thompson to look like winners asap. Then I’ll feel like Chris Grant has it in him to hit a draft homerun out of the mid-late teens of a strong 2012 class. Who cares if we don’t get a top-5 pick if we know we already have two proven cornerstones.

    That’s better than watching crappy basketball hoping we can re-draft Lebron.

  • Hurricane

    Anyone know when they are releasing the schedule?

  • http://waitingfornextyear.com Scott

    Re: “making a player take a haircut if they wanted to force a sign/extend-and-trade,” I’m 95 percent certain that the cap on E/T’s is set at three or four years with a lower percentage of an increase from their base. Thus, this is a bit of a haircut versus what they could get in the open market, or if they opted to stay with the same team via Bird rights (7.5 percent versus 4.5 percent, annually).

    Also, beyond 2013, teams that exceed the lurxury tax by more than $4 million are not permitted to acquire players in a sign-and-trade.

  • http://waitingfornextyear.com Scott

    Also, the cap hold provision is greatly reduced. Thus, if a free agent decides he wants to hold a team ransom for a few weeks after becoming a free agent, the amount he counts toward the cap is less than it was in the 2005 CBA, allowing that team to spend money in the free agent market rather then waiting in limbo.

  • mike

    the cavs will stink again and thats fine. they definitely can use another top 3 pick. hopefully, sacramento makes the playoffs and we can get that pick for this next draft. sac MIGHT very well be better than we think. hopefully a healthy tyreke evans, a motivated (and sane) demarcus cousins, Jimmer, a healthy fransisco garcia, jj hickson, jason thompson, marcus thornton and john salmons can sneak into a #8 seed in the West. at least on paper, its not a terrible lineup.

  • C-Bus Kevin

    @ Vengeful Pat

    ” I don’t think the majority of fans in any major sport are loyal to teams… I think they’re loyal to winning and follow wins.”

    If that’s true, how do you explain a packed Cleveland Browns Stadium, Lambeau Field in the down years, or Knicks fans?

    I think that fans follow players too…but they get attached to the players THROUGH the team.

  • christopher

    @Cbus

    Agreed on one point in that “storied” franchises like you’ve mentioned; Cleveland Browns, Green Bay Packers, New York Knicks will always keep a fan base.

    But disagree on the NBA losing younger fans. In fact I think the opposite. I think the NBA is specifically targeting younger fans with a deal that allows players to move even sooner.

    Younger fans want drama, storyline, basically the WWF with the belief that it is not all fixed.

    The new shorter max contracts allow just this.

    I’m with you in being 31 years old myself in that the NBA is losing me as well, but I don’t think it’s about us anymore. It’s about our kids.

    I can see the argument that they need to keep our attention as well because we have the money, not our kids and so I do believe they will try to stay relevant with the older generation through throwback Jordan special segments during All-Star weekend, KG sitting with Bill Russell in an awkward “fireside chat”, Charles Barkely commentating on how ugly Blake Griffin is, yada yada but in the end it’s all about the youth movement.

    Just my opinion though.

  • ClemJax

    As far as the cap hold goes, that strikes me as being far less important than it sounds. I mean, put it in pre-”Decision” terms – what big name would the team land with that extra cap space not knowing who was going to be on the team? That might be useful with your mid-tier players that play the market for a while, but that doesn’t strike me as doing much for balance.

    Also, a thought on the player movement discussion…is the NBA banking on player movement making the teams more money, or are the contract provisions just shortening the pain of bad contracts? With the max deal limitations, in terms of years and dollars, it might be less that player movement is the goal than getting rid of bad contracts faster.

    Finally, on the contract terms breakdown, here’s how I’m reading it (so please correct me if I’m wrong here). Max contracts for both Bird/Non-Bird are reduced a year (6/5 to 5/4), and max increases are dropped from 10/7.5% to 7.5/4.5%. So players can get a half-percentage larger increase if they stay with their teams under the new CBA than under the old. That basically translates into an extra $10k per $1mil of the contract. That strikes me as being negligible, no? That extra year might be worth it to the 2nd and 3rd tier players, but that’s clearly of little interest to the top tier players. Also, there’s no limit on sign-and-trades (max players can get is 4 years/4.5%) so there’s no upside there. The extend-and-trade limit is interesting – the way I read the new rules is those max out at 3 years including whatever is currently on the contract. That seems to take away the Carmelo example, and at least encourages players to ride out their contract. Unintended consequences there point to motivations to push the sign-and-trade.

    I guess what I’m getting at is these changes seem like a half-step in the right direction, but I’m not sold on them being enough. Also, the rules that kick in beyond 2013 simply make me laugh – hey, let’s make sure that Chris Paul and Dwight Howard (just to name two) can cash in before we actually start enforcing things…then, 4 years later, we opt out and make sure everyone else can cash in. Either you believe in what the rules should be to help balance or you don’t…this delayed kick in just seems to make sure a few more superteams can be created before reducing incentives.

    Maybe I’m overly cynical about this deal, and the league in general…I’m just not sold on this deal actually improving competitive balance in the league. Like I’ve said, I’d love to be wrong about this…I’m just afraid this is a deal for the sake of a deal and not a deal that’s for the good of the game.

  • Colin

    What if we made the playoffs with Kyrie and TT leading the team and Casspi and Varejao play great and Baron and Jamison are more of role players? Not saying I want it to happen or not but I was just trying to think of a scenario that making the playoffs wouldnt necesarily be bad and thats if these two players are way better than we think.

  • Vengeful Pat

    @CBK, you listed teams in the minority rather than the majority. Most sports stadiums are not anywhere near full when their teams are having a bad season. Which basketball arenas are full when their teams are bad? Boston, LA, NY Knicks… anyone else for sure? I can say that the Heat, Pacers, Wizards, T-Wolves, Bucks, Clippers, Bobcats, Hornets, Hawks, Magic, Mavericks, Rockets, 76ers, Kings, Pistons, Nuggets, Grizzlies, Nets, and Raptors do not come close to selling out their arenas when their teams are bad.

    Also, there are many more potential fans than can fit in a stadium. Just because the Cavs sold out their arena last year (because people bought season tickets thinking LeBron would be back) doesn’t mean that the Cavs didn’t lose a horde of fans when LBJ left town. Remember, the NBA has a mostly urban fan base so assumptions can’t be made based on the fact that suburbanites are showing up at games and supporting their city’s team over an individual player. The question is, what is the urban fan base doing?

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