Cap Space Deadline

 In David Kahn's Letter to the Fans on September 14th, Mr. Kahn named three distinct time periods he was targeting to trade our $11.77 million in cap space for maximum effect.

However, if one of our players fails to emerge, we will be prepared  to find more talent for our team – and we will seek a singular move rather than a series of moves, as we did these last 14 months.

Hence, the desire to operate under the salary cap.

Just as we took advantage of Miami needing to move Michael Beasley to a "room" team on short notice, I am hopeful other opportunities will come across our desk at three specific periods during the next several months:

•    Before the 2011 trading deadline, when teams that are over the tax line and not playing up to their capability seek to move a star player as the first step of a rebuild;

•    During the 2011 draft period, when some teams will be seeking to move salary to create room for free agency (although the class of 2011 is not nearly as attractive as the class of 2010); and

•    Immediately following the announcement of the new collective bargaining agreement, in whatever form it may take.

The Timberwolves front office has been very quiet since September, preferring to wait until their team was healthy before assessing what they have, and the moves they need to make.  Now, as the Wolves approach the February 24th trade deadline, they still hold $11.77 mil in cap space, which could be a very valuable trade commodity.

However, one question arises:

Does the asset disappear if they don't use it before the trade deadline? 

Let's take a closer look.

Trade Deadline:

This is the easiest to calculate.  Wyn's fantastic NBA Salaries Spreadsheet show us that Minnesota is $11,768,619 under the salary cap.  This allows them to make any trade without the standard 125% + $100,000 salary matching requirement that teams over the cap face, as long as the deal keeps them under the cap.  Other rivals with cap space are:

Cleveland $14,500,000 Traded Player Exception.  The Cavaliers are probably the most likely teams to counter our trade offers to a front office that needs cap space.  No one could have missed the vitriol from owner Dan Gilbert after LeBron left, and even last week, he twittered "You don't panic when things get tough," he wrote. "You think. You examine. You calculate. THEN you strike. And we will strike."   The team has lost 19 straight games, and now has the only record worse than the Wolves.  With few assets left on the Cavaliers, perhaps this means using their TPE.

Sacramento $13,455,452 cap space.  Sacramento has more cap space than Minnesota, but its probably unlikely that they'll use it in a big deal.  The Maloof brothers have been having severe financial problems, and probably need the savings.  Over the last few years, the Maloofs have sold their homes, large assets, and their original family business to try to make balloon payments on their casino, the Palms, which they still may lose.  Moreover, their arena deal forthe Kings fell through, and there are rumors that they may either sell the team or move it to Anaheim.

Toronto $12,207,400 Trade Player Exception.  I think its highly unlikely Toronto will be a major player using their TPE at the deadline.  While their TPE from the Bosh deal is large, they are only about $2 mil under the luxury threshold.  As many of you know, for every dollar a team spends over the lux, they have to pay a dollar in penalty.  Also, if a team is over the lux, they lose their lux share, which this year should be worth about $3 mil.  If the Raptors used their $12 mil TPE, it would cost them about $25 mil .. pro-rated to about $16 mil.  Other teams that don't worry about the lux can make a better offer and still profit.

No other teams have even half this much cap space, and/or can use it without going over the lux themselves.

 

This Summer.

It's very difficult to make conclusive statements about this summer, with a potential lock-out and new Collective Bargaining Agreement that could change all the rules, and even alter salaries.  However, let's at least start by pretending the CBA would stay the same.

The first thing to note is that while we only have two potential expirings (Telfair and Brewer), Mr. Kahn added nine new players last summer, guaranteeing all of them 2011-12 money.

Love, Flynn, Ellington (existing 2011-12 contracts)
Darko, Pekovic, Ridnour, Tolliver (free agents using cap space)
Beasley (trade using cap space)
Webster (trade using some cap space)
Koufos (trade - then team option picked up for 2011-12)
Wes Johnson + Hayward (2010 draft picks)
MIN pick + UTA pick (+ maybe MEM pick)
Rubio?


So did Mr. Kahn spend all our 2011 money in 2010?  Let's look at this summer's numbers.

$43.1 Guaranteed salaries for 12 current players

$3.5-$5.3 MIN 2011 pick - Top 5 (currently #2)

$1.2-$1.5 UTA 2011 pick - 18-24 (currently #19)

$0.0-$1.8 MEM 2011 pick - 10-18 (currently #14)

$2.9-$3.5 Rubio ($2.9 x 1.2 bonus) .. carries $2.9 cap hold through summer, even if doesn't come

$0.0-$4.0 mil Corey Brewer?

 

$50.7-$59.2  TOTAL:  14 to 17 players


The salary cap this year was at about $58 mil.   If we did nothing by the trade deadline, and everything worked in our favor, the most cap space we would have under the current CBA is $7.3 mil, which isn't much more than the typical MLE (last year $5.765).  A more realistic estimate puts out cap space at less than the MLE, and therefore, not much of a trade commodity at all.  This also points to an upcoming issue with roster glut - teams are only allowed 15 players.

The bottom line here is that if Glen Taylor wants to flex his financial might, he probably better do it by the Trade Deadline.

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