Author Topic: How do the NBA salary cap rules really work?  (Read 13775 times)

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How do the NBA salary cap rules really work?
« on: May 12, 2019, 11:38:36 AM »

Offline nickagneta

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I have noticed more and more that many fans here don't understand how the salary cap really works and many posters have to be told that what they are proposing just won't work.

The salary cap doesn't work by being able to get rid of salary and then replacing that salary with that salary slot.

The salary cap doesn't work by just looking at a salary breakout chart on the internet and if it looks like a team is under the cap that that is the number available.

There is a bunch that goes into figuring out exactly how much cap space you have or don't have. And, of course, a lot goes into making trades work because of salary.

What I did is I took some time and read this:

http://www.cbafaq.com/salarycap.htm

This site is tremendous for learning this part of basketball and giving a complete understanding of how all things salary in the NBA works.

No, you don't have to read it all, to have a much better understanding of things. But there are some sections that would really benefit many here.

I highly recommend giving some or all of this a read

Also, this thread can be used to ask questions about the cap so if you have them and don't want to read about it post you questions here and if I or anyone else can answer them, we will.
« Last Edit: May 21, 2019, 03:25:07 PM by Roy H. »

Re: How does the NBA salary cap rules really work
« Reply #1 on: May 12, 2019, 12:07:57 PM »

Offline gouki88

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The CBA FAQ site is very handy.

As is Saltlover ;) hope salty (Mike Zarren) isn't too stressed right now

Re: How does the NBA salary cap rules really work
« Reply #2 on: May 12, 2019, 12:20:28 PM »

Offline jambr380

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In the past I have spent quite a bit of time on that site. It really is quite comprehensive. I think it may be helpful to point posters to a couple of sections or post them here (in separate posts); there is no way you can expect fans of any team to learn and understand all of the intricacies of the NBA salary cap. Also, this is definitely the type of thread that should be 'thumbtacked' (or whatever it is). Too often these threads go by the wayside over time.

Note: I don't think this is directed at me, but I do still fully believe that the Cs could open up enough money for a max contract if Kyrie and Horford left and we let all of our FAs walk. I understand the cap holds on rookie contracts, but trading those picks for future picks would seemingly be pretty easy if we needed the cap space for said max FA.

EDIT: I just re-visited the site and realized that many of the sections are WAY too long to post here - so never mind on that point.

Re: How does the NBA salary cap rules really work
« Reply #3 on: May 12, 2019, 12:38:01 PM »

Offline Somebody

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.
Rockets PG: Westbrook, Rivers, Clemons SG: Harden, Gordon, McLemore
SF: House, Carroll, Caboclo PF: Covington, Green, Williams
C: Tucker, Hartenstein, Bender
Warriors PG: Curry, Jackson, Bowman SG: Thompson, Lee, Poole
SF: Wiggins, Okoro, Anderson PF: Green, Paschall, MKG
C: Looney, Chriss, Smiley

Re: How does the NBA salary cap rules really work
« Reply #4 on: May 12, 2019, 12:44:04 PM »

Offline jambr380

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.

I just pulled this from another post I had. It is just a rough estimate, but should give you some idea of where we are at. Remember, there are also cap holds for rookies (currently at about $7M) and for any empty roster spots (two spots at $1.8M). The cap is currently projected to be at about $109M and Horford would represent another $30M if he were to pick up his player option.

Quote
Perhaps we need another thread on this, but I just want to understand better what we would have left if Kyrie and Horford left and we renounced all of our FAs. By my calculations from Spotrac, we would have $66.3M tied up in players currently under contract.

Hayward - $32.7M
Smart - $12.6M
Tatum - $7.8M
Brown - $6.5M
Yabusele - $3.1M
Williams - $2.0M
Ojeleye - $1.6M

I realize that is only 7 players so draft picks and cap holds would take effect to increase that $66.3M number. Heck, Baynes could opt in and push it up to $71.8M.

Re: How does the NBA salary cap rules really work
« Reply #5 on: May 12, 2019, 12:51:08 PM »

Offline Somebody

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.

I just pulled this from another post I had. It is just a rough estimate, but should give you some idea of where we are at. Remember, there are also cap holds for rookies (currently at about $7M) and for any empty roster spots (two spots at $1.8M). The cap is currently projected to be at about $109M and Horford would represent another $30M if he were to pick up his player option.

Quote
Perhaps we need another thread on this, but I just want to understand better what we would have left if Kyrie and Horford left and we renounced all of our FAs. By my calculations from Spotrac, we would have $66.3M tied up in players currently under contract.

Hayward - $32.7M
Smart - $12.6M
Tatum - $7.8M
Brown - $6.5M
Yabusele - $3.1M
Williams - $2.0M
Ojeleye - $1.6M

I realize that is only 7 players so draft picks and cap holds would take effect to increase that $66.3M number. Heck, Baynes could opt in and push it up to $71.8M.
TP for the numbers. So basically offloading Hayward would mean we'd have a max slot if Kyrie bolts. Doesn't sound bad lol
Rockets PG: Westbrook, Rivers, Clemons SG: Harden, Gordon, McLemore
SF: House, Carroll, Caboclo PF: Covington, Green, Williams
C: Tucker, Hartenstein, Bender
Warriors PG: Curry, Jackson, Bowman SG: Thompson, Lee, Poole
SF: Wiggins, Okoro, Anderson PF: Green, Paschall, MKG
C: Looney, Chriss, Smiley

Re: How does the NBA salary cap rules really work
« Reply #6 on: May 12, 2019, 01:08:14 PM »

Online tazzmaniac

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.
Looks like we're at ~121.2M for 9 players including free agents (Horford 30.1M, Irving 21.3M and Baynes 5.5M).  That doesn't include the 1.6M team option for Ojeleye.  One thing that is often forgotten if the 12 player minimum roster and the ~0.9M minimum roster spot cap hold for each open roster spot below 12. 

The projected cap for next season is 109M.   If all three free agents leave and Ojeleye's option is not picked up.  The 6 players under contract plus the 6 open roster spot cap holds would be ~70M.  So we could get to ~39M in cap space which would barely be enough to get Durant. 

Re: How does the NBA salary cap rules really work
« Reply #7 on: May 12, 2019, 01:11:18 PM »

Online tazzmaniac

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.

I just pulled this from another post I had. It is just a rough estimate, but should give you some idea of where we are at. Remember, there are also cap holds for rookies (currently at about $7M) and for any empty roster spots (two spots at $1.8M). The cap is currently projected to be at about $109M and Horford would represent another $30M if he were to pick up his player option.

Quote
Perhaps we need another thread on this, but I just want to understand better what we would have left if Kyrie and Horford left and we renounced all of our FAs. By my calculations from Spotrac, we would have $66.3M tied up in players currently under contract.

Hayward - $32.7M
Smart - $12.6M
Tatum - $7.8M
Brown - $6.5M
Yabusele - $3.1M
Williams - $2.0M
Ojeleye - $1.6M

I realize that is only 7 players so draft picks and cap holds would take effect to increase that $66.3M number. Heck, Baynes could opt in and push it up to $71.8M.
TP for the numbers. So basically offloading Hayward would mean we'd have a max slot if Kyrie bolts. Doesn't sound bad lol
Offloading Hayward at 2yrs 30M+ each without taking back any salary would be difficult and costly. 

Re: How does the NBA salary cap rules really work
« Reply #8 on: May 12, 2019, 01:53:50 PM »

Offline nickagneta

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.
Looks like we're at ~121.2M for 9 players including free agents (Horford 30.1M, Irving 21.3M and Baynes 5.5M).  That doesn't include the 1.6M team option for Ojeleye.  One thing that is often forgotten if the 12 player minimum roster and the ~0.9M minimum roster spot cap hold for each open roster spot below 12. 

The projected cap for next season is 109M.   If all three free agents leave and Ojeleye's option is not picked up.  The 6 players under contract plus the 6 open roster spot cap holds would be ~70M.  So we could get to ~39M in cap space which would barely be enough to get Durant.
You forgot the cap holds for draft picks. That comes to $7 million.

So think about this. In order to get a max player like Durant you need to permanently give up on Rozier, Morris, Theis and Wanamaker. Have to have Kyrie, Horford and Baynes opt out and sign elsewhere(which is still their option...Horford and Baynes could easily opt in). Trade away all our picks for future picks. And trade away Hayward for a huge trade exception you would need to renounce right away because those exceptions count towards the cap, which most likely means sending at least one of those first round picks with him.

All that and hope Durant is good coming to play with Smart, Tatum, Brown, Williams, Ojeleye and Yabusele. If Durant wasn't coming to Boston the last time to play with IT and Horford, he isn't coming to play with that group with little chance of ever getting a title.

You really have to think about the totality of the situation this year when discussing trying to add a max level free agent. In essence, to add a guy like that you are losing

Kyrie
Horford
Hayward
Theis
Morris
Rozier
Wanamaker
And draft picks

For one player.

It just makes no business sense and Ainge would need to add a player by convincing them that the small core left will propel this team to a championship while adding no other stars whatsoever. Ainge is good. He ain't that good.

Re: How does the NBA salary cap rules really work
« Reply #9 on: May 12, 2019, 02:03:24 PM »

Offline ozgod

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John Karalis at MassLive has a quick primer on the salary cap as well. It's not as detailed, but it's a decent overview for those who have forgotten the basics.

https://www.masslive.com/celtics/2019/05/kyrie-irving-free-agency-what-happens-to-boston-celtics-salary-cap-if-he-leaves.html

Any odd typos are because I suck at typing on an iPhone :D

Re: How does the NBA salary cap rules really work
« Reply #10 on: May 12, 2019, 02:09:32 PM »

Offline Sophomore

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I'm aware of the fact that cap space isn't created by getting rid of a salary slot, but what's our payroll atm, and how can we open up a max slot? I guess trading Hayward for pure cap relief and renouncing Kyrie while signing Horford to a Duncanesque deal would do it, but I not sure.

I just pulled this from another post I had. It is just a rough estimate, but should give you some idea of where we are at. Remember, there are also cap holds for rookies (currently at about $7M) and for any empty roster spots (two spots at $1.8M). The cap is currently projected to be at about $109M and Horford would represent another $30M if he were to pick up his player option.

Quote
Perhaps we need another thread on this, but I just want to understand better what we would have left if Kyrie and Horford left and we renounced all of our FAs. By my calculations from Spotrac, we would have $66.3M tied up in players currently under contract.

Hayward - $32.7M
Smart - $12.6M
Tatum - $7.8M
Brown - $6.5M
Yabusele - $3.1M
Williams - $2.0M
Ojeleye - $1.6M

I realize that is only 7 players so draft picks and cap holds would take effect to increase that $66.3M number. Heck, Baynes could opt in and push it up to $71.8M.
TP for the numbers. So basically offloading Hayward would mean we'd have a max slot if Kyrie bolts. Doesn't sound bad lol
Offloading Hayward at 2yrs 30M+ each without taking back any salary would be difficult and costly.

LarBrd posted an interesting idea, assuming Ainge is cold-blooded enough to do it - and if it works under cap rules.

Trade Hayward to the Cavs. Have them include JR Smith, whose $15.6 million contract isn’t fully guaranteed ($3.8m is guaranteed July 1), then dump Smith. Assuming all sides would do it, could this let us shed another $15 million or so?

Re: How does the NBA salary cap rules really work
« Reply #11 on: May 12, 2019, 02:15:42 PM »

Offline nickagneta

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John Karalis at MassLive has a quick primer on the salary cap as well. It's not as detailed, but it's a decent overview for those who have forgotten the basics.

https://www.masslive.com/celtics/2019/05/kyrie-irving-free-agency-what-happens-to-boston-celtics-salary-cap-if-he-leaves.html
TP...that's all really good stuff...comprehensive, realistic and he makes excellent assumptions that make business sense.

Just a minor critique... he had the team not picking Semi's option but keeping Yabu. The team would be better served picking up Semi's contract and salary dumping Yabu with some cash and a second rounder for a top 55 protected 2nd round pick.

Re: How does the NBA salary cap rules really work
« Reply #12 on: May 21, 2019, 12:28:31 PM »

Offline otherdave

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New question:

Projections for this coming season:

Non tax payer MLE is 8.6 mil

(Cap) Room MLE is 4.4 mil.

MY numbers may be off, but the difference is always about the  same, and that is my question:

What is the rationale for difference?  If anything I would have thought Room MLE would be higher (but what do I know?)

Re: How does the NBA salary cap rules really work
« Reply #13 on: May 21, 2019, 12:53:25 PM »

Offline nickagneta

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New question:

Projections for this coming season:

Non tax payer MLE is 8.6 mil

(Cap) Room MLE is 4.4 mil.

MY numbers may be off, but the difference is always about the  same, and that is my question:

What is the rationale for difference?  If anything I would have thought Room MLE would be higher (but what do I know?)
The MLE is for teams that are over the cap. I believe the logic is the MLE allows a team over the cap to add a new "average" player at a price that is close to what an average NBA player makes.

Of course, those teams can still sign players they had on the team the previous year through other methods but this allows them to sign a new player, or players if that team breaks up the MLE to use on multiple players.

The MLE comes in two types. The standard MLE and the taxpayer MLE. For teams in the luxury tax, the league penalizes those teams by making it more difficult to add players and so they are only eligible for the taxpayer MLE, that is less money.

Also available to teams over the cap but below the apron is the BLE which is an exception that can be used only once every two years. It is much smaller that the MLE.

2019-20
MLE standard will be $9.264 million
MLE taxpayer will be $5.711 million.
BLE will be $3.619 million

For teams under the cap, they of course have the room under the cap to sign players. For this reason they do not have access to either MLE or the BLE. But once the team has used up their cap space they are given one exception to use, the Room Exception.

The Room Exception for next year is set at $4.76 million.


Re: How does the NBA salary cap rules really work
« Reply #14 on: May 21, 2019, 12:57:05 PM »

Offline PhoSita

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Tricky thing about the CBA is it's a document written by lawyers so for some things it's going to take a very high level of reading comprehension and some familiarity with legalese in order to parse it.

I know the FAQs like the one you linked help in that regard, but it's still a thicket.
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