I know the NBA finals are upcoming. I know the Sixers still haven't hired a coach. I know that the draft still hasn't happened yet, and you can't wait for the Sixers to pick the player you like, even if he's not available anywhere close to the 11th pick.
But this is news, and it's important in figuring into the first offseason under an exciting new front office regime that hasn't actually done anything yet. Marc Stein reports that the NBA has projected its salary cap for next year, and it's lower than expected:
Hearing early projections given to GMs and owners in May have NBA salary cap rising to just $58.5 mil next season. This season: $58.044 mil— Marc Stein (@ESPNSteinLine) June 3, 2013
NBA teams being told PROJECTED luxury-tax threshold for next season:$71.6 million. Reminder: Projections not binding until full July audit— Marc Stein (@ESPNSteinLine) June 3, 2013
I like numbers and playing around with them and seeing what they mean. But I also understand that I'm strange and many people don't understand or really care about the rules and mechanics behind the cap number. So I'm not going to go that far into them; instead I'll just give you what you need to know.
The NBA salary cap is weird. It's not really a cap on spending, but on freedom of spending. Most teams spend more than the NBA salary cap but less than the "luxury tax" number, since teams pay a penalty of more than a player's salary whenever they go over the tax number. The tax number is usually the most important number when considering NBA player salaries. According to Stein's tweet, the tax level will increase by only around $1.3 million for next year.
Before Stein reported the $58.5 million cap number, NBA observers (including me, the resident cardboard-box-capologist) expected the number to be around $60 million. That would also lead to an increase in the tax level of about the same amount, maybe a bit more, to around $73-74 million, instead of the $71.6 million figure.
The Sixers sit far below the tax line and have some wiggle room between the salaries of players on the roster and the salary cap. This is important because the Sixers can acquire salary from other teams while gaining cheaper, valuable players in the same exchange. This would have been the case whether or not the cap number came in high or low.
Even under the previously expected cap, the Sixers didn't have enough room to sign a free agent to a max contract. Because they can get far enough under the cap by renouncing their free agents, they can take on a lot of salary with returning anywhere near as much money as they take on in a trade. While the Sixers can't take on as much salary as expected with the old number, they still should have as much as $11 million available under the $58.5 million cap.
For other teams who wished to open up enough room to sign players to max contracts, the lower cap hurts. Dallas already seeks teams to take its 13th pick away to preserve space, while Houston might give away Thomas Robinson for almost nothing. But I find it more likely they will target teams on the edge of the luxury tax line, since other teams actually have first rounders to trade before 2018 to Dallas and Houston.
The lower luxury tax means more teams should be impacted by the tax line, and that teams closer to it now or even over it and need relief will push more aggressively to solve their tax problems. Simply put: with the lower tax threshold, the Sixers have more leverage in negotiations with tax-weary teams.
For instance, look at the Chicago Bulls. They unexpectedly paid the tax last season after years of resisting paying the tax. Before this year's draft and free agency, with 5 roster spots to fill, the Bulls are already over the tax, with 4 starters commanding at least $11 million salaries. Owner Jerry Reinsdorf may not be willing to risk paying tax for two years in a row, staring down a potential raise in the tax if they pay for 3 consecutive years (referred to almost always as "the dreaded repeater tax").
Luol Deng is expendable because Jimmy Butler is awesome and also played extremely well both alongside Deng and in his absence. Carlos Boozer is expendable because Carlos Boozer isn't good. Both make upwards of $14 million next season; Deng has just one year on his deal remaining, Boozer has two.
So, as a very rough example, the Bulls can move Boozer's two-year deal for Spencer Hawes and Lavoy Allen and cut nearly $6 million in salary this year AND over $15 million the year after. They also get two backup bigs, for what that's worth. They would also have to forfeit assets like international player Nikola Mirotic, young point guard Marquis Teague, and/or Charlotte's future unprotected first round pick (thank Larry Brown for that chip) to make that deal worthy for the Sixers.
Another team that might struggle with a lower tax is the Golden State Warriors, who took the NBA playoffs by storm. Based upon the probable exercising of options, the Warriors look committed to over $69 million in salary, without having Jarrett Jack or Carl Landry signed. They also have $20 million in dead contracts on the roster in Andris Biedrins and Richard Jefferson that they probably want no part of.
While prying Harrison Barnes seems like a pipe dream, obtaining a future first round pick and one of their other graduating rookies (Draymond Green or Festus Ezeli) in a one-year salary dump seems doable. The Sixers would send out one of their expirings for next season in return (Lavoy, Hawes, Kwame Brown, even Evan Turner) in the deal.
I cherry-picked the Bulls and Warriors because they have clear cap problems and clear ways to address those problems. Other teams will be in the tax - the Nets are swimming about $18 million north of the tax line already somehow, and the Lakers, Knicks, and Heat will almost certainly stay over the tax - and teams like the Raptors, Clippers, Celtics, and Spurs will likely face the question of whether or not they want to pay it as well.
Also, the Sixers will have competition for deals with tax-burdened teams. Orlando has a massive trade exception from the Bynum-Howard-Iguodala deal, Cleveland has cap space and draft picks galore, and Utah has so much cap room that it might not know what to do with it.
But that the Sixers are in position to make these deals, and that teams have an unexpectedly low tax level to deal with, makes them a valuable trade partner - which is a great thing for our long-term prospects. And it helps that we have a general manager I trust to do the right thing with the cap room.