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The Sixers’ 2020-21 Salary Cap Preview

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Get ready to hear some big numbers thrown around.

Philadelphia 76ers v Cleveland Cavaliers Photo by David Liam Kyle/NBAE via Getty Images

Remember when the Philadelphia 76ers and Denver Nuggets were signing and waiving (a retired) Mo Williams over and over to get closer to the salary cap floor to avoid a tax? Or when the Sixers had the lowest payroll in the entire league?

Well, those times are gone! After a big summer of spending in 2019 the franchise now finds themselves in what is essentially salary cap hell. The likes of Tobias Harris and Al Horford alone will combine for nearly $62,000,000 of the payroll next season, which will be above 40 percent of the team’s combined salary. The Sixers will officially be a luxury tax team for the 2020-21 season with Ben Simmons’ five-year extension kicking in.

We all already know how the Sixers got here, but the question on where they go is very unclear. There’s no clear cut path in which the team can get back to serious contention with a limited amount of assets and long-term contracts. So, where do the Sixers go from here? Who should they trade? Who should they target in the draft or free agency? Is there any way they can claw their way out of salary cap hell?

Before we break down the Sixers’ salary cap I think it’s essential to show you all a spreadsheet to get a picture on how things look over the next few seasons. You can find this spread sheet here, via Basketball Reference:

Important note not mentioned in the spreadsheet: Ben Simmons will make additional money on top of the salary shown above, as he made the All-NBA third team. This is awarded to Simmons via a clause in his contract extension.

This spreadsheet really puts how lopsided the Sixers’ salary cap is going forward. The Sixers’ starting five consisting of Simmons, Josh Richardson, Harris, Horford, and Joel Embiid will take up more than 90 percent of the team’s salary cap next season. The next highest paid player outside of that group is Mike Scott, who is making just over $5 million.

Josh Richardson has been known for being a very good player on a great contract. This upcoming season will be likely be his last before a big payday as he will almost certainly turn down his player option worth $11.6 million. It’s unlikely the Sixers will be able to offer him a competitive contract with the current roster construction. It’s very possible that the Sixers might shop Richardson in the trade market if they feel they won’t be able to retain him.

On the flip side of things, the Sixers do have some other good players on great contracts in Matisse Thybulle and Shake Milton. While both are young and still developing, their contracts are a major plus in a somewhat dire money situation. It would be wise for the Sixers to do whatever it takes — trade or not — to keep both of these young studs on the roster for the foreseeable future.

ESPN Insider Adrian Wojnarowski reported a few months ago that the luxury-tax threshold for the 2020-21 season was estimated to be around $139 million. Due to the COVID-19 pandemic and lagging economy, the figure is now estimated to stay around where it is today at approximately $132 million.

Assuming the Sixers don’t waive their non-guaranteed players in Furkan Korkmaz and Norvel Pelle, the team will enter the upcoming season with 11 players under contract making around $147 million (before adding any future draft picks or free agent signings). This means that the Sixers will enter the next season around $15 million over the salary cap, making them a luxury tax team.

For those unfamiliar with NBA salary taxes, any team above the salary cap has to pay an added tax depending on how much money is being paid. For example, if the Sixers are paying somewhere between $15 million to $19,999,999 million over the cap, they would pay an additional tax rate of $3.25 per dollar.

The Sixers would be paying well over $30 million in tax if the Sixers were to use their taxpayer’s mid-level exception (also known as a MLE) and sign one/two veteran minimum deals. For those unfamiliar, offering the MLE is the most common way NBA teams can pay incoming free agents while being over the salary cap. Each team is given a set MLE in an offseason. While the full-scale MLE will be worth roughly $10 million a year in salary the Sixers will only have access to the taxpayer’s MLE, which will be closer to half that.

It’s very possible that the Sixers could look to move one of Zhaire Smith (making $3.2 million next season) or Mike Scott (making $5 million next season) in an attempt to cut down on paying taxes. While both of their salaries may seem microscopic compared to some of the biggest numbers, their deals are essentially multiplied by their luxury tax rate.

While retaining a player like Mike Scott may sting the Sixers financially in the short-term, it would actually be wise to retain him going forward. Scott only has one more season left on his deal and won’t hamper any of the Sixers’ desperate need of flexibility. More importantly, they could pair a player they sign with this year’s MLE along with the likes of Mike Scott, Zhaire Smith, and their trade exception (which I’ll touch on later) to match salary up to the $15 million mark in the event of a future trade. Upgrading the Sixers mid-season could be done a lot easier in this regard.

How the Sixers’ 2020 NBA Draft will affect the salary cap

The NBA Draft has always been a great source of acquiring young talent on team-friendly contracts and the Sixers will look to take advantage in what is a mostly lackluster class.

The Sixers currently own selections at 21, 34, 36, 49, 58.

The only pick that will affect the salary cap in a noteworthy manor would be their lone first-round selection at 21. The NBA has a set scale every year for the first round in which players get paid varying on where they’re selected. The current projections suggest that this pick’s first year salary will start just under $2.5 million and go up year by year. The only noteworthy point that can vary in this event is if the Sixers choose to trade up or down in the draft; as it can either increase or decrease the added salary of a new rookie.

All second-round selections will be negotiated individually. It’s very likely the Sixers won’t use all four of their second-round draft selections and will opt to either trade them away, draft a “stash” player, or do everyone’s favorite option: sell them.

Two-way contracts are an evolving, popular way of bringing in raw talent into an organization. These contracts have set pay values that pay depending on how many NBA/G-League games are played. These contracts don’t have a salary cap hit.

Marial Shayok is the most recent example of the Sixers drafting and using a two-way contract. His two-way deal actually spans into this season, so the Sixers may look to add another two-way contract player to their roster via the draft.

Philadelphia 76ers v Boston Celtics - Game One Photo by Garrett Ellwood/NBAE via Getty Images

Navigating the 2020’s free agency with limited spending

As mentioned before, the Sixers won’t have much flexibility headed into the summer fall. Combine this fact with the Sixers will have several key rotation players testing the free waters of free agency, it doesn’t look promising.

Speaking of those free agents, the Sixers have — more than likely — four unrestricted free agents in Raul Neto, Kyle O’Quinn, Alec Burks, and Glenn Robinson (who has a player option he will almost certainly turn down).

The Sixers don’t own any bird rights to any of these players which means they’ll be unable to offer them anything outside of the veteran minimum unless they use their lone MLE. This will likely mean that their mid-season acquisitions — Glenn Robinson III and Alec Burks — will look to cash out in a weak free agency class that the Sixers just won’t be able to match.

This will make the Sixers’ upcoming offseason very challenging in many ways, offering little flexibility with a roster filled with big contracts that are hard to move. The largest contract they can offer would be the Taxpayer’s Mid-Level Exception, worth around $5.7 million. The Sixers would have to trim a large amount of salary to gain access to the full MLE which is a very unlikely event.

The most popular player to pack their bags would be the Sixers’ $109 million dollar big man, Al Horford. It’s well known that father time has gotten the best out of Big Al, whose also just a flat-out bad fit alongside Embiid and Simmons. Moving off of his contract won’t be easy by any means as the Sixers don’t have any leverage. There is a bit of light at the end of this otherwise grim contract; Horford’s last year is only guaranteed $9 million, meaning that he really only has two years left on his deal compared to the three most people see. However, paying an aging Al Horford more than $60 million throughout the duration of his current deal isn’t attractive to probably any team, and will cost a large amount of assets to move.

In the event of a trade scenario it’s worth noting that the Sixers also own a trade exception that was generated from the James Ennis trade worth around $1.8 million. This could be useful in future trades as any flexibility is a welcomed site, no matter how small.

The best case scenario for the Sixers would be moving one of Harris or Horford’s deals for multiple incoming players. This would allow the future salary to be dispersed more, which would allow more flexibility in future trades or gaining cap space. That, however, is way more easily said than done.

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Some possible targets for the Sixers

It’s widely known what this Sixers team needs to address in the offseason: a lack of shot creation and no-hesitation jump shooters. The Sixers have lacked players — outside of Alec Burks or Jimmy Butler — that could shoot off the dribble over the past few seasons. It’s cost them in years past, and this is the offseason in which they need to address this overdue issue.

As stated before: Burks will likely command a decently sized contract that the Sixers will be unable to competitively beat. This means they’ll have to look for shot creation in the upcoming NBA draft or in free agency.

Fortunately for the Sixers, this draft has a ton of guard talent found throughout. Players such as Cole Anthony, Tyrell Terry, Kira Lewis Jr, or Desmond Bane could bring the desperate need of shot creation to the team.

However, it would be unwise to fully bank on a first-year player in the middle-to-late first round to fix this problem. That being said, there could be some answers found within this years free agency class to address the Sixers’ lack of shot creation on the roster. Some realistic targets could be Reggie Jackson, Austin Rivers, DJ Augustin, Jeff Teague, or Langston Galloway.

The Sixers’ MLE will need to be used wisely in this offseason. We saw the Sixers use their lone MLE last year within the first few hours of free agency on Mike Scott, who had a down year and fell out of the rotation completely. The Sixers cannot afford to miss again in this regard, if they make a roster-changing trade or not.

Apart from shot creation, the Sixers may look to add an affordable backup big man to their roster. While many may look (and hope) to move Horford, the Sixers should look for a more viable option regardless. Some realistic options at the center position could be JaMychal Green (who has a player option worth around $5 million), John Henson, Patrick Patterson, or Willie Cauley-Stein.

The Sixers will be incredibly limited in solving their gaping roster flaws without a trade. It’s likely they’ll draft at least one or two players and sign the same amount of free agents in the upcoming 2020 free agency. Look for the Sixers — who are maybe led by Elton Brand — to be aggressive in pursuing trades to overhaul this lopsided roster. There’s a lot of work to be done in between now and in the coming weeks.