Q&A with Jeff Siegel: Sixers’ Cap Situation and Free Agency

Jeff Siegel (@jgsiegel) is an NBA writer and salary cap expert. You can read him on Early Bird Rights, Peachtree Hoops, Fear the Sword and Blazer’s Edge. (I strongly suggest you check Jeff’s work out; I learn something in every article.) Jeff joined me to discuss the Sixers’ salary cap situation heading into the offseason.

Kevin F. Love: As things currently stand, how much cap space will the Sixers have in this upcoming free agency period? Let’s assume Richaun Holmes’ option is not picked up. And what if it is? How do cap holds affect their cap space?

Jeff Siegel: Assuming Holmes is out, that leaves the 76ers with $74.2 million in salary, which includes the 10^th and 26^th picks in this year’s draft. They have additional cap holds, $46.5 million worth, $40.8 million of which are J.J. Redick and Amir Johnson, with the remainder split among Marco Belinelli, Ersan Ilyasova, and their two two-way contracts, Demetrius Jackson and James Young.

If Holmes’ option is picked up, then $1.6 million is added to their team salary and they lose that cap space, unless they were to cut him later. Holmes is non-guaranteed for 2018-19 in addition to his team option, so they can always pick up the option and then cut him for no cost later if they need every ounce of available space. T.J. McConnell’s contract works the same way; they’ve already picked up his option, but he can be cut at any time if they do land a big fish this offseason.

Cap holds are estimates of what a player’s value should be after his contract ends and go against a team’s cap space unless the team renounces that player’s hold. Once renounced, then the player can still re-sign with the team and retains whatever level of Bird rights he previously had, but for cap purposes he would be treated as an outside free agent—he would either have to fit in their cap space or in one of their exceptions (mid-level, room, etc.).

KFL: If the Sixers were to add a max free agent, let’s say LeBron James or Paul George, would they have any money left to add another (more) free agent(s)? How concerned would you be over their ability to add depth? Are there exceptions the Sixers could qualify for?

JS: Without making trades or stretching anybody on the roster, Philadelphia could dump Holmes and McConnell and get to $30.0 million in cap space, which is about $5 million off James’ max and just a few hundred thousand dollars short of George’s max. If they were to make a trade to get off enough salary to sign James, it would depend on the exact terms of the deal—how much salary do they take back for whatever they’re sending out? Because of the way the salary is spread among their players, it’s unlikely they could clear enough space to sign James/George and another key free agent.

Depth could be a small issue, but not nearly as much as it normally is when teams acquire a superstar of James’ or George’s ilk. When James first went to Miami, the Heat were very thin before they were able to build around their Big 3. Same thing in Oklahoma City with George and Carmelo Anthony—losing multiple players to bring in one does sap a team’s depth. In the 76ers’ case, the only key player they’d almost certainly have to part with is Redick and replacing him with either George or James would obviously be a massive upgrade. The other players on the outs could all return on a minimum contract or are Amir Johnson, who won’t be missed in their rotation when he leaves this summer. Holmes, McConnell, Marco Belinelli, and Ersan Ilyasova would all be candidates to immediately return; even if Philadelphia has no remaining cap space, they can always go over the cap to sign minimum contracts.

In this scenario, Philadelphia would qualify for the Room exception, which is estimated to be at $4.4 million for 2018-19. The Room exception can be used to sign a player for up to two years starting at anything less than that $4.4 million number. In a perfect world, the 76ers would land George or James and Redick would re-sign under this exception—while it would be an illegal arrangement, it wouldn’t surprise me if part of signing Redick for $23 million for 2017-18 was to “pre-pay” him to come back on a much smaller deal in 2018-19. Redick had never made more than $7.4 million in a season prior to this past year.

KFL: Jerryd Bayless is under contract through next season. In many scenarios, it seems like he needs to be thrown into hypothetical trades just to make salaries work. If the Sixers aren’t able to move Bayless, what could it look like if the Sixers used the stretch provision on him?

JS: Bayless is absolutely a stretch candidate this summer, especially if they get a commitment from James. Stretching his remaining $8.6 million salary would split his cap hit over the next three years, reducing his 2018-19 charge to $2.9 million. That $5.7 million saved coincidentally lines up with exactly the amount they’d need to give James his full max, currently projected at $35.35 million for 2018-19. Trading him would be preferable to stretching and waiving him, depending on what it would cost them to get rid of him. Attaching a first-round pick to his salary doesn’t make a ton of sense. It would be better to just cut him and take the three-year hit, especially if they already have a James signing in the bag; they likely wouldn’t have any cap space in the next two years if they were to sign James anyway, so Bayless’s extra money on the books wouldn’t affect them significantly.

KFL: What do you expect the market value of JJ Redick to be this offseason? How about Ersan Ilyasova? Could either be signed to the Sixers using an exception?

JS: Redick will be interesting to watch this summer. It’s nothing more than a conspiracy theory at this point, but it wouldn’t surprise me to see him return under the Room exception if they land James or George. Ilyasova would be another candidate to return under the same exception, though there’d be no conspiracy there—$4.4 million feels about fair for Ilyasova this summer. Redick’s market value is higher than that, probably in the $8.6 million mid-level exception range for a good team that needs more outside shooting. A 76ers team with James would be a little weak in their spacing and bringing back Redick would go a long way for them offensively, but if he’s focused on getting as much money as possible for his services, I imagine he’ll have a better offer out there.

KFL: Assuming the Sixers use the 10th overall pick owed to them by the Lakers, how does the salary of the player selected affect things?

JS: It doesn’t. Unlike under the 2011 Collective Bargaining Agreement, the 2017 Agreement stipulates that all first-round picks who are unsigned have a cap hold for the same amount for which they’re likely to sign: 120% of that year’s scale for their draft position. Rookie scale contracts are already such a great bargain for teams because they artificially deflate the player’s value for up to four years, but teams used to also be able to sign their draft picks later on in the process to use the difference between their cap hold and their eventual salary. That loophole was addressed by the new CBA and now it no longer matters whether a first-round pick signs immediately or waits until the end of free agency to officially put ink to paper.

KFL: Last question. How do you feel about the Sixers’ cap situation? Is it one of the better situations in the league?

JS: It’s absolutely one of the better cap situations in the league, due to the aforementioned rookie scale contracts. Philadelphia has six players on rookie scale contracts, including Ben Simmons, which is what helps to give them the potential to sign James or George this summer. While those rookie scale guys may need raises by 2020, the 76ers are in a great spot this summer to add a superstar and continue to build on what is perhaps the best young core in the league.

Huge thanks to Jeff Siegel for participating. Give Jeff a follow on Twitter @jgsiegel and check out his site Early Bird Rights.