When the NBA instituted a salary cap before the 1984-85 season, it was uncertain how fixing each team’s financial capabilities would impact the league as a whole. At the time, the NBA was the first of America’s major sports to implement such a policy; the National Football League did so in 1994, the National Hockey League in 2004-05 and Major League Baseball continues to rely on its Competitive Balance Tax (luxury tax).
Proponents of the salary cap believe that it precedes a more even disbursement of talent and a subsequent increase in revenue league-wide. Detractors suggest that it leads to an upsurge in players switching teams and diminished fan-interest as a result. The reality of a relative limit on what an organization can spend to build a team, though, has made at least one thing certain: putting together a championship caliber roster relies more on the competency of a franchise’s executives than the depth of its owner’s pockets.
The Intricacies of Today’s NBA
Through both the 2011 and 2016 collective bargaining agreements, the NBA Players Association negotiated a dashboard of new maximum contracts for gifted players. Instead of pushing to get rid of max contracts, which place a ceiling on what a player can earn, they contrived the Designated Player Extension, which allows an individual to earn ascending proportions of their team’s salary cap based on experience, accolades, and where they intend to sign.
Increased earning opportunities for deserving players, combined with the nature of a league in which it’s nearly impossible to win without one or more superstars, create an environment in which competitive teams must be deliberate with every dollar of deployable cap space.
The 2017-18 Golden State Warriors, for example, devoted 60% of their salary cap ($99M) to Steph Curry and Kevin Durant; the duo even accounted for 50% of the team’s space under the luxury tax penalty ($119M). Combined with Klay Thompson and Draymond Green — two players on the tail-end of team-friendly deals — the Warriors’ four all-stars earned 95% of the salary cap and 79% of their budget below the tax. To field a supporting cast around such an expensive core, Warriors’ management fills in the cracks with draft picks and inexpensive veterans.
And the Warriors aren’t the only team that has succeeded while commissioning such a strategy. When evaluating the payrolls of the league’s best teams, compared to the productivity of the players they employ, a trend emerges.
Elite franchises pay top-dollar for worthy max contract players, draft prospects that can contribute on rookie-scale deals, and avoid overpaying for second, third and fourth contract veterans. Among the NBA’s top-four seeds from this season, there was very little in-between cheap, productive players and superstars. While Ryan Anderson (Rockets), Serge Ibaka and Jonas Valenciunas (Raptors) should be pointed at as bad contracts, those players are at least capable contributors during the regular season. And maybe it’s not a coincidence that their teams aren’t vying for the NBA Title. Regardless, a pattern is evident in the way that contending teams are assembled.
The Trouble with the Timberwolves
When Tom Thibodeau took the helm as Head Coach and President of Basketball Operations in Minnesota, the Wolves were grooming a trio of rising stars who were playing on rookie deals. Consequently, the organization had a short window during which to sign free agents before their cap space would be tied up. Between the spring of 2016, when Thibodeau was hired, and today, the Wolves have signed players to the following substantial, long-term contracts:
- Gorgui Dieng: 4-years, $64M
- Taj Gibson: 2-years, $28M
- Jeff Teague: 3-years, $57M
- Andrew Wiggins: 5-years, $148M
Each deal has seemed both defensible and irrational at different times, but the only one that fit into the framework of roster construction illustrated above at the time it was signed is Wiggins’. The 23 year-old demonstrated immense upside in garnering his max extension, but regressed offensively the following season after being replaced schematically by Jimmy Butler.
While Gibson and Teague were both pivotal in delivering the Wolves’ first playoff appearance in over a decade, it can be argued that they are overpaid relative to the role they provide. And Dieng, signed during the cap-spike offseason of 2016, continues to enjoy a salary that far exceeds his value. As a result, the Wolves payroll from last season, relative to the value of it’s players, looks less appealing than those of the teams they’re chasing.
When considering the guaranteed contracts they have for next season, including the first year of Wiggins’ new deal, things get lopsided.
As Wolves’ brass contemplate offering Butler and Karl-Anthony Towns max contract extensions this summer, further limiting their spending flexibility, they’ll be forced to consider avenues of re-adjusting their resource allocation.
First and foremost, the left-hand side of the chart above needs to be more populated. Justin Patton, last year’s first round pick, might see real NBA minutes for the first time next season. The Wolves also own the 20th pick in this year’s draft; if they choose to keep that pick, they’ll add another source of affordable labor. They’ll have the opportunity to make qualifying offers to restricted free agents Amile Jefferson and Marcus-Georges Hunt for $1.578M and $1.744M respectively. Beyond that, Thibodeau will need to take advantage of his roughly $6M below the tax threshold, their mid-level exception, and veteran minimum contracts, to sign free agents.
But these are just the little things that the Wolves front office will do to dust off the edges of a roster that could use a cleanup. If Thibodeau is exploring a more significant change, an evaluation of relative value added would highlight a pair of unsettling contracts; the two Wolves who were lowest in Win Shares added last season, Wiggins and Dieng, will combine to earn more than $40M in 2018-19.
If the front office is motivated to unload Dieng, they’ll have to be willing to relinquish considerable assets in order to entice a trade partner. While such a move wouldn’t free up significant cap space next season, it would create flexibility for the future given Dieng’s contract is guaranteed through 2020-21.
Exploring a trade to move on from Wiggins, on the other hand, likely wouldn’t cost the Wolves as much in assets, but it might be difficult to convince another team to take a shot on a player with major downside. Giving up on Wiggins before the first season of his new deal would also be an indictment on Wolves’ upper management as a whole. On owner Glen Taylor, who reportedly insisted that Wiggins was untouchable in trade talks before the 2017 draft, and on Thibodeau’s most high-profile signing at the helm in Minnesota. In the end, though, it may be a necessary decision for the organization's long-term success.
On the other hand, the Wolves can work toward internal progression and hope for improved health next season to bolster the appearance of their financial well-being. Butler seeing the floor in more than the 59 games he did in 2017-18 would catapult his value to the team. That, combined with a jump from Wiggins and a resurgence from Dieng could see the Wolves make a playoff run in 2018-19. But relying on drastic improvements from a young player that has struggled to progress and added value from an overpaid backup center is a risky proposition in a league with such such a small margin for error.
We’ll see what happens.