Revisiting Free Agency

March 4th, 2013 by Nate Smith

In December, I penned a two part series on the summer of 2013 free agency class.  Click here for part 1, and here for part 2.  It’s time to check in on these guys and note what is still relevant and what isn’t.  The Cavs cap situation has changed a little bit.  The Cavs have restricted free agents in Omri Casspi, and Wayne Ellington.  No one expects the Cavs to extend a qualifying offer to Casspi, and Ellington’s offer is $3.1 million, but my bet is that his contract number will come in higher than that at around $4 million (I’d rather over-estimate than under-estimate).  In addition, C.J. Miles has a team option for $2.2 million, which is fairly reasonable for a bench scorer.  In addition, Kevin Jones’ team option is $788,000.  Marreese has an ETO option for $4.5 million which most people expect he will exercise to get more long term money.  The Cavs will have cap holds for their 2013 draft picks that I’m estimating at between $5-7 million (with four picks and many different slotting options, there’s a lot of flux).  Which gives them salary commitments of between $39.5 – $41.5 million, assuming Speights opts out.  With an estimated $60 million dollar salary cap, that gives the Cavs Approximate $20 million to play with.  But…

We all know that the plan is to save cap space for 2014 when you know who is expected to opt out of free agency.  I’m betting that it will take at least $19 million per year to sign him, unless he takes less money to build a better team. Furthermore, I’m assuming the Cavs will elect to keep Anderson Varejao in 2014, to both help lure a potential free agent, and because $4 million of his salary is guaranteed that year.  Alonzo Gee’s $3 million is non-guaranteed that year, and I would put the odds of him seeing that money from the Cavaliers at around the same odds that Andy straightens his hair and frosts his tips in 2014.  So the goal is to have about $42 million in cap commitments going into 2014.  Without Gee, with Ellington’s $4 million, and with $9 million in cap holds from the 2013 and 2014 drafts (that’s being conservative), the Cavs will have $40.7 million in cap commitments in 2014.  Whoa.  $1.3 million is not a lot of spending room.  Fortunately, the Cavs will be able to complete sign and trades in 2014, being so far below the cap, so they can ship out some salary to get some back. But one can see that planning for a future that may never happen can severely limit what a team can do in the present.

What does this mean for 2013 free agency?  It means that the Cavs are going to have to get very creative with contracts.  I don’t know how much the NBA salary cap allows them to front-load their contracts, but if they are able to offer players a $10 million dollar 2013 salary and a $1 million dollar 2014 salary, they ought to do it.  In addition, offering players expensive one year deals with the promise to consider signing them to salary cap exceptions in 2014 is also a good plan.

Some other factors have come in to play too.  With the development of Tristan Thompson, a power forward who will play more than 10 minutes a night is no longer really a necessity in free agency.  As such, it makes much more sense to go after players who can play center, small forward, and guard.  This rules out players like Maul Millsap, David West, Karl Landry, J.J. Hickson, and Jason Maxiell.

The Cavs Own Free Agents: The first thing the Cavaliers will have to consider is what to do with their own free agents.   And yes, I realize I didn’t even cover any of them in the earlier iterations of this series.  Of course, Ellington wasn’t playing well then, and Speights was so buried on the Grizz that I didn’t think he’d turn down $4 million next year.  But it shows you what I know… We’ve already gone over what it will take to keep Wayne Ellington.  The bet is three years, $12 million.  With the way he’s played, he may get closer to $5 million per year from another team.  That would be a hard offer to match.  As for Marreese Speights, who can play both big man spots, what if Cleveland could offer him $15 million in year one, and $1 million in years two and three?  Is this even possible?  That would be the ideal contract: around $5.66 millon per year for three years averaged, but with low cap hits in years two and three.  Someone with some salary cap brains answer this question for me, please.  Otherwise, he is probably not worth paying him the long term contract he seeks.  Signing Shaun Livingston to a similarly front loaded deal with maybe $4-5 million this year and league minimums in subsequent years (for a three year deal, total) would be a good answer to signing him long term as well.  An average contract of just over $2 million per year seems about right.  The final question here is, do the Cavs try to bring back Luke Walton?  He certainly has outplayed all expectations this year, but to do it again at 33 is asking a lot.  Still, he is a guy who can play both forward spots, and make the offense flow.  Would he be worth a league minimum for another year or two before transitioning into coaching?  Probably.  (And yes, I can’t believe I just said that.)

Who’s worth spending long term money on in 2013? This is a very short list, populated with people who are supreme talents, and/or people who would be easy to move if the Cavs wanted to clear cap room in 2014.  Dwight Howard would probably be at the top of it, but he’s not coming to Cleveland, and he is apparently a clown.  Chris Paul is on that list, but he plays the same position that Kyrie Irving does.  However, they could very easily play together, and CP3 could show Kyrie how to be GREAT.  It’s an intriguing option, as Cp3 and an unnamed 2014 perspective free agent are reportedly good friends.  But Cp3 will be looking for an $80 million over four years contract, and unless things absolutely blow up in Clipperland, he’s not leaving Los Angeles.  If you’re the Clippers, do you swallow that contract and pray his knees hold out?

This leaves Josh Smith who can play the 3, but will also want $80 million over four years and plays the same position as 2014 Player X.  If you’re the Cavs do you go after Smith, hoping you can move him in 2014, or because you’re afraid 2014 won’t pan out?  Smith is a great two way player who can be electric at times, but can also be a headache who takes bad shots at times, and is not a go-to scorer.

Al Jefferson?  He’s probably going to get too much money since he’s a legit center.  Andre Iguodala?  In the words of Bill Simmons, he’s a third banana making second banana money who wants first banana money.  Andrew Bynum?  Thank God for dodged bullets.

What about the restricted free agents? There are a few restricted free agents still worth looking at, most notably: Nikola Pekovic, Tiago Splitter, Tyreke Evans, and Gerald Henderson.  Splitter and Pekovic because they play center, and are still relatively young, are going to make northwards of $10 million a year.  Someone will pay them that.  Their teams are going to have a very hard time matching this number.  My bet is that Minnesota matches and that San Antonio doesn’t.  If you’re Danny Ferry, would you pay Josh Smith almost $18 million a year, or would you try to get Splitter for $10 million and move Horford to power forward?  If I’m Chris Grant, I’d be extremely tempted with both.  I’d bid these guys up just to tie up other teams’ time and salary.  I still think Splitter would be awesome with Varejao, but we’d have to take a Xanax every time that Brazil played international ball.  I like Pekovic: his toughness, his ability to check opposing centers (at least in terms of body), but I just get this feeling that he’s likely to sign and retire: sign a big fat check and balloon up to 350.  Though, he does look like a character from Grand Theft Auto IV, so maybe not.

As for Evans and Henderson, they both can play either wing spot, though they’re undersized for the 3.  They both are players with very intriguing skill sets who are trapped on horrible teams.  Someone will make a run at these guys, and both players should pray they can get off their current teams.  But unless someone massively overpays, they won’t be going anywhere (though with the Sactown ownership situation, who knows).  Still, it might be worth the Cavs time to throw offers their way to tie up their teams’ cap.

The Other Guys:
So this leaves a chunk of players who the Cavs should go after via my plan: cheap players, and/or 1 year deals with the promise of future salary cap exceptions, or front-loaded contracts; who can play multiple positions, mainly at the wing and big man spots.  Tony Allen, Anthony Morrow, Martell Webster, Al Harrington, Chase Budinger, Dorell Wright, DeMarre Carroll, Elton Brand, Josh McRoberts, Austin Daye, Earl Clark (yes please), Samuel Dalembert, Jermaine O’Neal, Cole Aldrich, Mike Dunleavy (my fave for this category), and Brandan Wright; and (if Livingston leaves) Randy Foye, Jarrett Jack, Devin Harris, Beno Udrih…

Final Thoughts: I’ve been giving a lot of consideration to Mallory’s ideas from Friday.  While I don’t think that signing Iguodala is the right answer, the Cavs cap situation in 2014 allows one max player, and not multiple.  This may not be ideal…  The answer might be to trade in the 2013 draft.  My trade?  Both draft picks in 2013, plus a 2015, and Alonzo Gee and Tyler Zeller for?  Jared Dudley and Marcin Gortat.  Gortat’s contract doesn’t go past 2014, and Jared Dudley’s is uber reasonable for one of the best wing defenders in the league who can also hit open 3s and guard 4 positions.  Would the Cavs get a player better than him in the 2013 draft?  Doubtful.

Update: Thanks to frequent CtB commenter and collective bargaining consultant JAG, it appears I was wrong in the Cavs’ ability to frontload contracts.  Here’s his note.

AFAIK Nate, decreases  from year to year in a contract are subject to the same rules as increases. The standard raise/decrease limit is 4.5%  but depend upon if any exceptions are used to sign the contract. The max increase/decrease available I’ve seen listed using certain exceptions is 7.5%. I don’t think Speights qualifies for any exceptions that could allow a 7.5% yr/yr change sice he had to waive his Bird Rights. Also note that because his time of service is between 0-6 years, his MAX contract is something like $13.668M for the first year. The poison pill type of contract that allowed Houston to steal Asik and sign Lin was a result of a part of the Gilbert Arenas Clause, which allowed Houston to average their salaries over the length of the contract for CAP purposes but not their original teams.

So it appears that outside of the Gilbert Arenas rule, there is no way for teams to jigsaw contracts to make them fit in the cap from year to year, as I was proposing.  Thanks for clearing that up, JAG.  The Cavs can overpay players in 2013 to play on one year contracts, but they have no leverage in keeping those players at lower salaries in years beyond that.