Shrink's Mailbag
by shrink on Nov 19, 2009 11:25 AM CST
Email
PrintMoney Talks with shrink
First, would Rudy Gay's qualifying offer carry over to us if we were to trade for him midseason?
Second, if so, would that technically count him as a member of our team over the summer, meaning we could use our cap space to sign a free agent, THEN sign Gay afterwords because we can go over the salary cap to resign our own players?Brian
Hey Brian! I share your interest in Rudy Gay, particularly after he and Memphis were unable to come to an agreement on a contract extension a few weeks ago. While I am concerned about a number of his statistics, I suspect his situation in Memphis leaves him unhappy and artificially lowers his production. If he reaches free agency, these concerns may push other teams to gamble longterm money on more reliable free agents ahead of Gay, and I suspect that a lot of the NBA's cap space will be gone by the time Gay gets a contract. With less buyers, I think his final contract may be less than we expect, and his physical tools give him the uncommon opportunity to sign a fairly large free agent deal, and still get upside on that money. There are a lot of scenarios for Rudy Gay, and he's an interesting player to follow.
In 2010, Rudy Gay is still a restricted free agent on his rookie scale contract, and Memphis' inability to sign him to an extension does not mean that they lose their ability to make him a qualifying offer of $4,422,784 next summer, which they will. If he's traded to us, we retain that right as well.
Also, whoever has him will have the right to match offers from other teams. In my view, if things don't improve with the relationship between OJ Mayo and Rudy Gay, and Gay and the rest of the team, small-market Memphis would be unlikely to use their right to match an expensive offer. Next season they will be paying Zach Randolph and Marko Jaric a combined $25 million, and they would struggle to pay for Gay's deal until 2011. This may encourage them to try to trade Rudy Gay, rather than lose him for nothing.
If Minnesota acquires Rudy Gay, he will indeed carry a cap hold for 2010. Here's the skinny:
For first rounders like Gay, if the player's salary from last year is greater than the average salary of all the league’s players, his cap hold is 2.5 times his salary. If his salary is less than the average league salary, then his hold is 3 times his salary.
For non-first round free agents, they have a cap hold equivalent to 1.5 times their last years salary if that salary is above the league average and 2 times their last year's salary if its below.
Finally, the hold cannot be larger than the player’s maximum first-year salary on their new contract. For example, 3x the #1 pick's last year would be greater than a max deal.
For Rudy Gay, his will likely be less than the average salary, which should come in near $5 mil. As a first rounder, his cap hold would be $3,280,997 x 3.0 = $9,842,991.
Cap holds are in place at the beginning of free agency, and are designed specifically to prevent teams from creating artificial cap space by delaying contracts to players they have the rights to. If we traded for Gay before the deadline, his cap hold would prevent us from using our cap space elsewhere unless he was dealt to another team. Notice that Randy Foye would have put us in the same situation if he had not been traded.
Got Questions? EMail shrink at nba_economist@yahoo.com and you may find yourself in a future mailbag!
22 comments
|
0 recs |
Do you like this story?
Comments
so explain this so even us who don't understand the CBA can get this
If we were to trade for Rudy Gay…We would not be able to use the other money we have coming off the books to sign other free agents?
Or at least we can't
use the amount that his hold is. Anything in excess of that up to the salary cap is fair game. So basically it would be Gay and filler in the offseason.
by TheEvilProfessor on Nov 19, 2009 3:06 PM CST up reply actions
It seems to me
that the cap hold is a fairly stupid rule. Why should Rudy Gay count as an 11 million dollar player when he’s worth 4 million? I don’t understand the logic behind that at all.
The $4 mil is just the opening offer
Let me use Portland as an example.
If Brandon Roy hadn’t signed an extension, his qualifying offer would still be around $4 mil because he’s still on rookie scale, but we all know he’s worth more than that,. However, the NBA doesn’t know how much, so they err on the side of caution.
Without the 3x or 2.5x rule, POR would have a big advantage. If Roy’s cap hold was only $4 mil, perhaps they’d have the cap space to grab a max deal player like LeBron for $16 mil, then the next day, replace their $4 mil cap hold with Roy for a $13 mil contract.
Since I mentioned Roy, let me talk about Foye. Suppose we still had him, and he had the same $4 mil qo, $11 mil cap hold. If we wanted to give him a new contract starting at $5 mil, we’d want to do that immediately, replace his cap hold with a true salary, and reclaim the real cap space.
Rudy Gay is a question mark. I personally don’t think he’s going to get $11 mil in the 2010 economy unless things change drasticly for Gay or for the NBA market. Trading for him before the deadline would reduce our flexibility with other free agents and may hurt our 2010 pick, but it would give us a preview of how he’d look on the team before committing longterm money, and it would also give us the ability to match a contract if he accepted a low offer.
If the “preview” of Gay didn’t go well, couldn’t we renounce his rights on Day 1 of free agency, which would eliminate the problem of reduced flexibility in free agency next year? Which would make the only real downside to a mid-season trade the potential hurting of our draft pick (which is not something to consider when making personnel decisions, if you ask me)?
The reason for the rule is to avoid cap cicumvention
It applies to all players—not just guys with a qualifying offer, and if memory serves was the result of a sleight of hand Pat Riley attempted with the Heat years ago. Juwon Howard had played the best basketball he ever would play, conveniently for about 2 months before he became a free agent. He was with Washington at the time. The Heat wanted to sign him to a massive contract, and had Zo Mourning coming off a contract themselves, but obviously wanted to keep him.
So they signed Howard first, with the “cap space” created by Mourning’s ending contract, THEN they used their Bird rights to resign Mourning over the cap. The league voided the Howard deal as an attempted circumvention, and to avoid this sort of thing in the future, they came up with the system of cap holds.
by Eric in Madison on Nov 19, 2009 3:30 PM CST up reply actions
Thanks for writing
One of the reasons I wanted to post here was to explain things like this, so let me simplify:
FREE AGENCY:
1. Every team can offer MLE deals to free agents, which should be about $5 mil next year.
2. If your team’s total payroll is under the salary cap (which may be around $52 mil), you can offer up to that amount under the cap. ( If we’re $10 mil under the cap, we can offer $10 mil, while most teams could only offer $5). No team can exceed a max deal.
3. MIN wants to clear as much payroll as possible for next season, to be able to offer bigger deals, or trade the cap space.
CAP HOLDS
4. To prevent teams from cheating the system on “when” they are under the salary cap, the NBA applies “cap holds” to players that a team has the rights to sign later.
5. If we owned Rudy Gay in 2009-10, we’d have his rights in 2010-11, so we’d carry a cap hold for him.
Example:
Suppose MIN’s Total salary with 8 players was $37 mil, which means they would have $15 mil of “cap space” under the $52 salary cap. Without Gay on the roster, we could offer $15 mil to a promising free agent.. With Gay on the roster, his $11 mil cap hold would only leave us $4 mil to offer a free agent. The cap hold only disappears if we either sign Gay to a real contract (which may be lower or higher), or move his rights to another team.
Edit
Strangely, I recited the rules, then failed to apply them correctly.
I’ve edited the post to reflect Gay’s true cap hold, $9,842,991
Big Al - Gay - Love - Sessions
Don’t forget the big guy.
If only we could afford to add both Gay and Johnson
Big Al – Gay – Johnson – Love – Sessions.
Alright, it’s a reach, but it’s making me smile.
If the qualifying offer transfers to us, then I'm all for trading for Gay ASAP
Say what you want about his shortcomings….he’s exponentially better than anyone we have on the wings right now.
We can get him right now, test drive him for the season, and win a lot more games than we’re projected to right now. If we like him, we guarantee ourselves the ability to retain him. If we don’t like him, we won’t waste the summer chasing him and won’t have to deal with a disappointment next year.
How much?
How much do you give up to have the right to match an overpriced deal on Gay? After NY strikes out on LeBron and the rest, who do you think they’re going after? And, what will Memphis accept in trade?
What indeed...
I’d start with trying to get a steal. Ryan Gomes and our second or third draft pick maybe (that’d save us having a cap hold because of the rookie contract). Then go from there.
It’s hard to know what the Grizz would want. Are they looking of requal value on his contract or his talent? No one really knows.
It’s hard to know what the Grizz would want .. indeed
That’s one franchise I can’t figure out. Were they so desperate for ticket sales/wins that they were willing to ignore their rebuild, endangering developing young talent with guys like Zach Randolph, Allen Iverson, and Jamaal Tinsley?
Maybe this is a team that wants to bring in Mark Blount, not for financial reasons, but for his stabilizing clubhouse presence?
Love the updates – nice job Oceanary
We could trade Rudy ourselves later.
One point that’s been left out in all this discussion of cap space is that Rudy is an asset. If we traded for him at the deadline, nothing prevents us from trading him again this summer.
A sign-and-trade limits us if we want to take back raw cap space, because there will be few buyers. However, while there’s risk, he could be a value play. I think its very possible his trade value would rise if he moved from MEM to MIN.
I want to know...
It is not even Thanksgiving yet and all of this speculation is killing me. I know a lot will change between now and July but I really wish Kahn would give us a hint to who he is going to pursue. Of course in the end there is so much more involved in the decision process than just talent alone.
Comments For This Post Are Closed
Secondary Sidebar
User Tools
FanPosts
Community blog posts and discussion.
Certain photos copyright © 2012 by Associated Press or Getty Images. Any commercial use or distribution without the express written consent of Associated Press and Getty Images is strictly prohibited.
