What's the Best Way to Use the Salary Cap?

Ultimately, teams who get to the top have 2 things: great players and a team identity (defense, SSOL, etc.). Teams who stay on top, however, have some combination of the following: 1) good health; 2) shrewd drafting and trading; 3) owners willing to pay the luxury tax; and 4) good cap management. If the Wolves ever plan on getting to and staying at that level, they definitely need #2 and #4. #4 is the focus of this post. Basically, with the current salary structure in place (which unfortunately has to be assumed since the new CBA won't take effect until 2011), how much can the team afford to pay 1) superstars 2) All-Stars 3) bona fide rotation players/fringe All-Stars 4) rotation players 5) system players 6) young guys with potential 7) end of bench guys?

First, let's assume a $58 million salary cap and a $70 million luxury tax threshold. Let's also assume that the team will keep 15 players on the roster because they want to continue to develop young talent.

In this scenario, a team benefits salary-wise if 1) they can develop young players to step in and play immediately 2) they can get minimum-salary guys who fit their system 3) they have past-their-prime veterans who can still play and cost little and 4) they have a bona fide superstar who's on their first max deal after their rookie contract (think Kevin Durant). All of these variables matter, and ultimately, it means that there isn't a specific amount or even a specific % that can be spent on each player. What it means is that the team has to judge the value of the player and determine how much they should pay that type of player.

Ultimately, a franchise is paying for 10-12 players: the rotation guys and the developmental guys. The end-of-roster players are minimum-salary guys who can play a little (e.g. Shelden Williams). In these 10-12 guys, a championship-caliber team needs enough good players in their rotation. For example, the last 5 Finals teams had this makeup:

'10 Lakers: 1 Superstar (Bryant), 1 All-Star (Gasol), 1 fringe All-Star (Bynum), 3 rotation players (Odom, Artest, Fisher), 1 young player (Farmar), 2 system players (Brown, Walton)

'10 Celtics: 3 All-Stars (Garnett, Rondo, Pierce), 1 fringe All-Star (R. Allen), 3 rotation players (Wallace, Robinson, Perkins), 1 young player (Davis), 1 system player (T. Allen)

Obviously, this analysis is a bit rough, but it does indicate that having 2-3 All-Stars and 1 fringe All-Star are necessary and will likely be the guys who get the money. If a team has a Superstar, that means they probably don't need to spend as much on the upper level because paying for 1 Kobe costs less than paying for a Pierce and a Garnett. Either way, just looking at the salaries of some of the top teams, it seems like the following costs should be expected:

$13-24 million for a Superstar: if a team is lucky, they can pay less because a young player becomes a Superstar quickly (LeBron, Wade, Durant), but the vets make up to $24 million/season.

$9-18 million for each All-Star: teams that need more than 1 of these guys probably don't have a Superstar, but it's mainly the veterans who get more than $15 mil a year. A team can get away with 1 Superstar and 1 All-Star, but the teams lacking a Superstar probably need 3 All-Stars to be title contenders.

$6-15 million for a fringe All-Star: most teams have at least 1, but this is probably the most-overpaid group and probably leads to the most trouble for a team that makes mistakes here. Case in point: the Magic paid Jameer Nelson a little over $6 million last year while giving Rashard Lewis almost $19 million.

Really, the 3-4 players from the above groups are the ones who'll take up most of the lower cap. The Lakers paid out $52 million for Bryant, Gasol, and Bynum last year, with only Bynum really being overpaid. For a team not paying the tax, that means about $18 million for the other 12 roster spots. With the rookie minimum being about $500K and the vet minimum about $1 mil and with championship teams probably paying about 3-4 minimum-salary guys, that means a franchise like the Wolves needs to set limits about how much they will pay for every player below a fringe All-Star.

Let's say, for example, that a team has 4 guys at or above fringe All-Star level and making roughly $50 million and that the same team has 4 minimum-salary guys combining for about $3 million. This leaves about $17 million for 7 players, with 3 of those guys expected to be good enough to play in the rotation. Here's my take on how to divvy it up:

  1. 1 legitimate rotation player for the MLE. Think Ron Artest. $11 million left for 6 players.
  2. 3 mid-late first-rounders still on the rookie scale, combining for about $4 million, leaving $7 million for 3 players.
  3. 1 legitimate rotation player for $3.5-4.5 million, like Kendrick Perkins, leaving about $2.5-3.5 million for 2 players.
  4. 1 veteran rotation player for the biannual exception, leaving $500K-$1.5 million for the last roster spot.

This is an admittedly-rough assessment and probably means that the team needs to develop at least 2 rotation players out of guys who are on minimum and/or rookie-scale deals. However, good teams do this (Roddy Beaubois, Rajon Rondo, even Dwyane Wade during his first 4 years).

Ultimately, what needs to be figured out for the Wolves is which players fit into which categories. Here would be my guesses:

Fringe All-Stars: Love, Beasley, Johnson

Rotation Players: Flynn (possibly a fringe All-Star), Brewer, Webster, Milicic, Pekovic, Ridnour

System Players: Ellington, Tolliver, Hayward

So ultimately, the Wolves' goals have to be developing 1-2 of their fringe All-Stars into All-Stars, developing Rubio or whatever is received for him via trade into an All-Star, making choices about which rotation players deserve to stay and which ones should be moved, and hitting on 1-2 All-Stars with their future draft choices. Most importantly, they must figure out how to strategically prune the roster. It might make sense for them to overpay Love, for example, but they certainly can't overpay Love, Beasley, and Johnson. Also, they can't pay more than $5 million/season for anyone who isn't a fringe All-Star or pay more than $2 million for anyone who can't hold down a spot in the rotation (a possible red flag for the Tolliver signing).

I think the most important aspect, though, is something they already seem to be doing: not giving players long-term deals. Milicic (3 years guaranteed), Pekovic (3), Ridnour (4), Tolliver (2), even going back to Telfair (3), Smith (2), and Gomes (2 with a buyout) are all indications that they realize the folly of deals like Hudson and Hassell. They need to burn this into their brain: rotation players should be replaced before they are overpaid, and there's no reason to give them a deal longer than 3-4 years. It's pretty clear that getting and keeping talent is difficult, but a competent franchise should be able to build a good team and keep it good if they keep adding talent and understand player value.

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