I continue to be amazed by the myth that cap space means a great player will come and play here and make the next incarnation of the team contenders. We should dispell this myth along with the idea that we can trade an expiring for talent.
Here's what we know/have learned about building a team:
1) Free agency is for suckers. Players tend to go to the team that pays the most, meaning no other team will pay that much. It is how bad contracts are made. Even max players get more by staying with their team, so it's still a sucker's game.
1a) A FA is more likely to use another team's cap space as leverage to get more money where he is, i.e. Grant Hill and J-Kidd last year. Players really don't like to move their families if they don't have to.
1b) A FA role player will take a discount for ONE year on a contender, but only with the expectation that they prove their value to cash in the following year, i.e. Posey did, and Daniels may be hoping to do.
2) Expiring contracts have little trade value by themselves. Teams will dump overpaid players, but largely only dump young talent when they absolutely have to, and want some talent/hope back in return in either picks or prospects.
3) The draft is the best way to get talent, but it's a crap shoot, especially outside the top-5, top-10, if you need a franchise player, and it takes a few years to develop players. Sometimes, though, miracles happen (PP at #10).
That's how it goes. It's understandable how some folks have looked toward FA as the hope for the future, especially after our incredibly long rebuilding process. The rebuilding took so long because of bad trades of picks and prospects, though, not because the draft was the wrong way to go.
Predictions: If we don't go very deep in the playoffs this year, Daniels definitely won't get more than 120% to stay, and Nate may not get a raise at all ($4 mil for a backup is a lot). (I think they'd play well together, though). They may not use the MLE at all if they can't get a player that makes us a contender.
Next year: expect us to coast even more mid-year, but make the playoffs, getting a better draft pick (around #20) while still holding out hope for the fan base.