Renouncing players to use "Cap Space": Bad Idea

[LarBrd33]

For a lot of you this will be a rehash of stuff you already know, but I think it's important enough that it deserves it's own thread.

We keep hearing about how we have "cap space" and "flexibility".  It's mostly nonsense.  Next year we have Rondo (11 mil), Pierce (16.8 mil), Bradley (1.6 mil), and JaJuan Johnson (1.1 mil) under contract.  Add the 21st pick (1.6 mil) and 22nd pick (1.6 mil) and you're already at roughly 33 million in committed salary.  The soft cap will be set at around 58 mil... which leaves us theoretically 25 million in cap space. 

Problem is, we'd be renouncing the bird rights (in short, bird rights grant you the right to exceed the soft cap to sign your own player) to Jeff Green, Ray Allen, Kevin Garnett, Brandon Bass, Chris Wilcox, Keyon Dooling, Pietrus, Stiesma, Daniels... I believe we even still hold the bird rights to Nenad Krstic that we would need to renounce.   Some of those names don't necessarily matter (regardless of the cap you can always sign guys to vet minimum deals)... but some of those names DO matter. 

Here's a rough estimate of what our guys are likely to get next year (either from our team or elsewhere)

KG - anywhere from 5-15 mil a year.  I have no freakin idea.
Ray - Anywhere from 5-10 mil, most likely
Bass - At least 5 mil since he's opting out of a contract paying him 4.3
Jeff Green - I've seen estimates between 5-9 mil

Additional Info:
Dooling - Made 2.2 mil last year
Wilcox - Made 3 mil last year
Krstik - Made 5.5 mil when he last played for us.  Supposedly we own his bird rights
Pietrus - Actually made 6.5 mil last year (5.3 from the Suns and 1.2 from Boston)

I'll just assume the rest of the guys (including Stiesma) can be had for the vet minimum (800k-1.4 mil depending on years of service)

THE PROBLEM WITH RENOUNCING:

Technically you can renounce (give up the bird right to) ALL of these guys (KG, Ray, Bass, Pietrus, Krstik, Jeff Green, Dooling, Wilcox, etc)... but now you are LIMITED to 25 million..  Sure, this grants you the opportunity to explore ideas like "Absorb Ariza/Okafor's contract and land the #10 pick!" or "Trade multiple picks for Josh Smith!" or "Go after a restricted free agent that we have no chance of actually signing!", but again... you are LIMITED TO 25 MILLION.  No sign-and-trades.  If, for example, you decided to absord Emeka Okafor's 14 mil contract, you now have 11 million dollars to split up amongst the rest of your players That 11 mil might be enough to sign Kevin Garnett... now you're more than likely saying goodbye to Brandon Bass, Ray Allen, Jeff Green, and any other Celtic who will want more than the vet minimum.  You gave up their bird rights... they are gone.   

Sure, maybe you get creative with that 25 million... convince KG (our 1st or 2nd best player) to take 8 mil.  Convince Jeff Green to take 6 mil... maybe go all-out and give Chris Kaman the 11 million dollars remaining.  NOw you're effectly saying goodbye to Ray Allen, Brandon Bass and any other Celtic who wants more than the vet minimum, but at least you have a starting center, right?   

Ok... theoretically that could potentially work out if you're in the mood to let key Celtics walk away for the addition of someone that may or may not make us a better team.  But here's the alternative:

The Benefit of saying "the heck" with "Cap Space" and Renouncing nobody:

This, to me, makes a lot more sense.  Forget the idea of limiting yourself to 25 million dollars.  Forget renouncing bird rights.  Don't even worry about it.  Our team made the ECF this year with key players injured.  Just reload.   By retaining bird rights, you don't really have to worry about budgeting.  You can exceed the soft cap (58 mil) to bring in your own guys.  So... for example.

Does KG want 10 mil ?  So be it. 
Does Bass want a 4 year deal making 6 mil a year?... so be it
Does Ray want to come back making 7 mil?  So be it.
Is Jeff Green's agent demanding no less than 7 mil?  So be it.
Do you want to bring back Wilcox making 3 mil?  Done.
DO you want to hang onto Nenad Krstik's bird rights so we can sign him for 6 mil when he comes back to the states next year?  Done

If you're doing the math at home, we just brought back the key players, added Jeff Green and we already spent 39 million dollars (14 mil more than we could spend if we renounced players... simply because you can exceed the soft cap by signing your own guys).

The benefits don't end there, though...

We are granted the Mid-Level Exception since we're over the cap at the start of free agency and paid luxury tax last year... which means we can offer a free agent 3 mil per year with a 3 year duration.  Offer that to a Greg Oden, for instance... or another vet backup like a Chauncy Billups.

Do you want to entertain sign-and-trades?  No problem.  Want to sign and trade Ray?  Jeff Green?  Bass?  Krstik?  I believe we'd have the ability to do that.

Yes, by doing this you no longer have the ability to sign big money free agents... but who were you planning on signing anyways?  All the names I hear (Roy Hibbert, Javale McGee, Eric Gordon) are restricted free agents.  Whatever you're willing to give them, their original team will be willing to match.  When it comes to unrestricted free agents it's Deron Williams and then... probably KG, Ray and Jeff Green, actually.

 
Final Thoughts
Everyone keeps talking about Ray Allen being a goner.  I don't really understand why that is.  Forget about cap space... there is no reason why we can't bring back KG, Ray, Bass, and the rest of our team, actually... add Jeff Green... add Krstik (or sign and trade him) when he's ready to come back to the states.  Add someone with the MLE.  Add our two rookies... and ride it out until Pierce finally falls off the books and we have legitimate cap space to deal with.  I really don't see a better option for the next two years.   In fact... I'd say if the plan is to hang onto Paul Pierce and Rondo this is a no-brainer.  If your plan is to dump Pierce for additional cap space (and hopefully a lotto pick) or move Rondo for a guy on rookie contract... the idea of renouncing guys and utilizing cap space in a "rebuild" starts to make a lot more sense.
   

[csfansince60s]

TP for a well thought out post. I have been thinking the same thing which was also spelled out in much the same way on Felger and Mazz yesterday.

Let's bring'em back. You add a healthy Green, Wilcox and Bradley to what we had this year as well as two decent rooks and we are good to go for another year.

[LooseCannon]

We are granted the Mid-Level Exception since we're over the cap at the start of free agency and paid luxury tax last year... which means we can offer a free agent 3 mil per year with a 3 year duration.  Offer that to a Greg Oden, for instance... or another vet backup like a Chauncy Billups.

Having the full MLE to work with instead of the taxpayer MLE is based on the luxury tax threshold for the current season, not having paid the tax in the previous season.  Also, if the team can stay below the "apron", the team has the bi-annual exception (two years at $1.957m per) available.

Renouncing players means you are limited to the $25m or whatever plus the room MLE, but you lose the LLE.

[guava_wrench]

I don't see Ray coming back. He wants 2 years and doesn't want to worry about trade rumors at the deadline.

Renounce Marbury. There is probably some other dead weight that can be dropped.

I am not going to extrapolate from our playoff run. We missed the Bulls without Rose, Heat without Bosh for a bunch of games, and I don't see Pierce and KG being any faster next season. Wilcox is often injured and he and Dooling aren't getting any younger either.

We also should try for some RFA if they are available, even if their teams might re-sign them, if we are talking about young talent that can help us long term.

[cman88]

i dont think Ray is such a goner either. if KG is back, I have a feeling Ray isnt going to want to leave.

Rose is out with an ACL injury until next march-april...and even then, most players arent back at 100% for Another year after that..see welker or Perkins who werent themselves when they came back.

with the right moves, we can be a #2 team in the East...and the fact is, there is no better option. Theres no good FA's out there. so why not try and make a run at it?

sign and trades are a big thing too...look at how we swapped BBD for Bass


 

[LarBrd33]

We are granted the Mid-Level Exception since we're over the cap at the start of free agency and paid luxury tax last year... which means we can offer a free agent 3 mil per year with a 3 year duration.  Offer that to a Greg Oden, for instance... or another vet backup like a Chauncy Billups.

Having the full MLE to work with instead of the taxpayer MLE is based on the luxury tax threshold for the current season, not having paid the tax in the previous season.  Also, if the team can stay below the "apron", the team has the bi-annual exception (two years at $1.957m per) available.

Renouncing players means you are limited to the $25m or whatever plus the room MLE, but you lose the LLE.

"Under the 2011 CBA, the amount of the MLE and its duration depend on the team's cap status. The MLE is now $5 million for a duration of four years for teams that are over the cap either before or after the signing, but did not pay luxury tax in the previous season. Teams without cap room that paid tax in the previous season have an MLE of $3 million with a three-year duration. Teams with cap room, previously ineligible for the MLE, have a new MLE of $2.5 million with a two-year duration. The MLE is frozen at the stated levels through the 2012–13 season, after which it increases by 3% per season.[6]"

I assumed that the bold would apply if we didn't renounce anyone.

[LarBrd33]

I am not going to extrapolate from our playoff run. We missed the Bulls without Rose, Heat without Bosh for a bunch of games, and I don't see Pierce and KG being any faster next season. Wilcox is often injured and he and Dooling aren't getting any younger either.

Nice.  So you're in the "LarBrd33 Pessimist camp" that we were never a contender and we were never going to beat Miami this year and we shouldn't take any of our success seriously.  I like it!

Blow er up!  Trade Pierce for an expiring contract and a draft pick and let's do er up right.  Bring on a decade of lotto land!  Eventually we might luck into a superstar and return to relevance against the mighty LeBron and DUrant Dynastys.

[minijericho29]

TP for the post.  Great effort.

[LooseCannon]

Wikipedia is wrong.

According to Larry Coon's CBA FAQ, cap holds for free agents don't count for the purpose of calculating whether or not a team is eligible for various exceptions, such as the taxpayer or nontaxpayer MLE.

Coon has this to say about the MLE:

This exception is available only when a team is below the "apron" (i.e., not paying luxury tax, or less than $4 million above the tax line). This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes it above the apron. It cannot be used by a team that has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception.

I should also point out that because they waived him, the Celtics can only sign Wilcox using the veteran minimum salary, cap space (if they renounce enough free agents to free up space), or an exception such as the MLE.  For Pietrus, the Celtics can use all three of those plus the non-Bird exception allowing them to sign him to 120% of his previous salary, which will be the minimum salary and not what Phoenix was paying him.  (If the Celtics sign Wilcox again, however, this past season would count as the first towards accrual of Bird rights, assuming he doesn't sign with a different team in between stints in Boston.)

[colincb]

I've been on board with this analysis for a while and have been tempted to write something similar every time I see one of the posts that talks about KG returning and let's pair him up with fill in the blank. So thanks for sparing me the effort and congrats on an important post. One observation is that if we don't renounce our free agents and can't get a sign-and-trade for Ray Allen, then it is to our benefit that he returns. Otherwise Ray walks and we can only replace him with a minimum scale scrub.

At the end of the day, (A) if KG doesn't come back, we'll tank unless we're stupid enough to waste our cap on a weak class of unrestricted free agents and (B) if KG does come back for a salary in the $10M range, then the roster damage from renouncing all our free agents more than offsets any benefit of adding another good player.  A very few here have talked about low-ball offers for KG which assuredly will lead us back to scenario (A) above.

[Eddie20]

Wikipedia is wrong.

According to Larry Coon's CBA FAQ, cap holds for free agents don't count for the purpose of calculating whether or not a team is eligible for various exceptions, such as the taxpayer or nontaxpayer MLE.

Coon has this to say about the MLE:

This exception is available only when a team is below the "apron" (i.e., not paying luxury tax, or less than $4 million above the tax line). This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes it above the apron. It cannot be used by a team that has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception.

That's what I thought as well. I guess the key is to re-sign players to one year deals, getting us passed the salary cap, but under the 4M tax line in order to secure both the MLE and Bi-Annual exceptions to sign FA's.

KG and Green (in oder to showcase himself) both seem likely to accept 1 year deals. We might be able to sign Bass for 1 year if we overpay for him like we did for Baby a couple of summers ago. Allen is probably looking for a multi-year deal so it makes it a bit harder than in Bass' case. He doesn't have much time left so I'm sure he's looking for a 3 year deal to end his career. And I wouldn't want to to give him that many years since it'll tie up cap space for the upcoming summer. Steimsma I would want back and wouldn't mind giving him multiple years since he's young and his cap figure will be low.

I would like to bring back Pietrus and Dooling (more for his locker room intangibles than on-court play) for the vet minimum.

So I guess that's pretty close to running it back.

(Starters)
4/5 - KG and MLE Big
3 - Pierce
2 - Bradley
1 - Rondo

(Bench)
6th Man - Green
5 - Steimsma, LLE, or 1st Rd Pick
4 - Bass
2 - Pietrus, Moore, LLE signing, or 1st Rd Pick
1 - Dooling, Moore, LLE, or 1st Rd Pick

[LarBrd33]

Wikipedia is wrong.

According to Larry Coon's CBA FAQ, cap holds for free agents don't count for the purpose of calculating whether or not a team is eligible for various exceptions, such as the taxpayer or nontaxpayer MLE.

Coon has this to say about the MLE:

This exception is available only when a team is below the "apron" (i.e., not paying luxury tax, or less than $4 million above the tax line). This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes it above the apron. It cannot be used by a team that has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception.

I should also point out that because they waived him, the Celtics can only sign Wilcox using the veteran minimum salary, cap space (if they renounce enough free agents to free up space), or an exception such as the MLE.  For Pietrus, the Celtics can use all three of those plus the non-Bird exception allowing them to sign him to 120% of his previous salary, which will be the minimum salary and not what Phoenix was paying him.  (If the Celtics sign Wilcox again, however, this past season would count as the first towards accrual of Bird rights, assuming he doesn't sign with a different team in between stints in Boston.)

Good info.  Still sounds like 3 years 3 mil would be the exception available to us if we re-signed everyone, right?  We'd probably be above the "apron" after the exception was used (assuming we had already signed Jeff Green, KG, Ray, Bass, etc)

I guess what you're saying is that if we exceed the cap (to bring back our own guys) but keep it under the "apron" we could actually use the NON-TAXPAYER MID-LEVEL EXCEPTION

[LooseCannon]

We'd probably be above the "apron" after the exception was used (assuming we had already signed Jeff Green, KG, Ray, Bass, etc)

I'm eyeballing the numbers and I suspect the Celtics would have to spend close to $30m on KG, Green, and Allen combined to put the Celtics into a position where they lose the full MLE, but I really don't feel like figuring out right now how close.  The only other scenario I could see is if some other team wants to throw crazy money at Ray Allen and gives the Celtics some big salary back in a sign-and-trade.  With the new rules increase the allowable salary gap in trades for non-tax teams, the best-case scenario might be bringing almost everyone back except for Ray Allen, who gets S&T to a team that will overpay him in exchange for a guy making something like $12m while providing closer to $7m worth of production.

I guess what you're saying is that if we exceed the cap (to bring back our own guys) but keep it under the "apron" we could actually use the NON-TAXPAYER MID-LEVEL EXCEPTION

Yes.  Avoiding dipping into luxury tax territory would also mean the team still has the bi-annual exception.

[goCeltics]

25 mill plus the room and bi annual exception should be enough to return kg, bass, greg and wilcox with having around 8-9 mill left to sign g wallace or ilyasova. Would i trade jeff green and ray allen for either g wallace or ilyasova probably.

This assumes greg and wilcox will sign for 2.5 million, kg for 9 million and bass opts back in. if bass opts out they could have enough for ray also.

If greg or wilcox don't sign for that 2.5 mill i fine with letting them go and getting replacements.

[LooseCannon]

25 mill plus the room and bi annual exception

You don't have the bi-annual exception to work with if you use the room MLE.