Even though Dwight Howard didn't end up choosing Golden State, the Warriors still managed to steal many of Friday's headlines by making a pair of splashy moves, agreeing to send more than $24MM in salaries to the Jazz and reaching a long-term contract agreement with Andre Iguodala. With so many moving pieces involved in the Warriors' series of transactions, let's break down how the moves will affect the team's salary cap outlook.
Heading into July, the Warriors had $69,905,195 in guaranteed salary on their books for 2013/14, according to Storyteller's Contracts. Throw in a cap hold for first-round pick Nemanja Nedovic and non-guaranteed salaries for Dwayne Jones, Kent Bazemore, and Scott Machado, and that figure rises to a total of $73,445,481. We don't know for certain that all these figures are 100% accurate, but they're at least in the ballpark, and for our purposes, we'll assume they're bang-on.
Now, a good chunk of the team's salary will be offloaded in the deal with the Jazz. With Richard Jefferson ($11,046,000), Andris Biedrins ($9,000,000), and Brandon Rush ($4,000,000) heading to Utah, the Warriors will eliminate $24,046,000 in guaranteed salary from their books, with only Kevin Murphy's non-guaranteed salary of $788,872 coming back. The result? $45,859,195 in guaranteed contracts, with non-guaranteed salaries and Nedovic's cap hold bringing the total to $50,188,353.
The way the pair of deals with the Jazz and with Iguodala were inititally reported suggested that the Warriors had cleared the necessary room under the cap to sign Iguodala outright. That's not quite true yet, if we assume a '13/14 cap line of $58.5MM — some or all of those non-guaranteed contracts would need to be waived if Iggy is going to receive a four-year deal in the neighborhood of $48MM. But that would be simple enough to do.
However, what if the Warriors don't intend to go under the cap at all? Using cap space to sign Iguodala would eliminate a ton of flexibility for Golden State. The team would have to renounce its rights to free agents Jarrett Jack and Carl Landry, making it extremely difficult to bring either player back. The Warriors would also lose access to their full $5.15MM mid-level exception, gaining instead the much more modest $2.65MM room exception assigned to under-the-cap teams.
On top of that, Golden State would have to renounce three significant traded player exceptions acquired in the deal with the Jazz, worth the equivalent of Jefferson's, Biedrins', and Rush's salaries. The Warriors also have a handful of smaller TPEs that would need to be renounced as well, but none of those are as potentially useful as the ones for Jefferson ($11.046MM) and Biedrins ($9MM) would be.
There's another way for the Warriors to add Iguodala without sacrificing all those exceptions and all that flexibility, but it would require the cooperation of the his old team, the Nuggets. Here's how it could work:
Once the July moratorium is lifted, Golden State would first finalize its trade with the Jazz. At that point, despite only having about $50MM in salaries on their books, the Warriors would still be considered an over-the-cap team because all of the their exceptions and cap holds would keep them over the presumed $58.5MM cap line.
After that, the next step would be bringing Iguodala into the fold. If the Warriors and Nuggets could work out a sign-and-trade agreement for the free agent swingman, it could potentially be beneficial for both teams. Denver likely wouldn't want to take back any salary for Iggy, but Golden State would have access to a newly-created $11,046,000 trade exception (for Jefferson).
Using that exception, the Warriors could acquire Iguodala via a sign-and-trade, giving him a starting salary of $11,146,000 (the amount of the TPE + $100K). Annual 4.5% raises on that amount would give Iguodala a four-year total of $47,593,420, which is in the ballpark of his reported $48MM agreement. This sort of transaction is how the Lakers were able to acquire Steve Nash last summer, using their Lamar Odom TPE rather than cap room.
From the Nuggets' perspective, accommodating a sign-and-trade with a conference rival that significantly helps that team become more flexible isn't necessarily good business. But if the Warriors were willing to include an asset or two (perhaps future draft considerations, cash, and/or the rights to Nedovic), Denver could add a couple pieces and create a trade exception of their own, worth Iguodala's new salary. That's better than getting nothing for a player the Warriors could sign outright anyway.
If the two teams were to work out such an agreement, the Warriors would still have trade exceptions worth $9MM (for Biedrins) and $4MM (for Rush). They also wouldn't necessarily have to renounce the rights to Jack and Landry, and they'd still have access to the full mid-level exception. The club would be hard-capped for the season, having acquired a player via sign-and-trade, meaning team salary couldn't surpass the tax apron (approximately $75.6MM) at any point, but there'd be plenty of wiggle room to add talent before reaching that threshold.
Needless to say, such a scenario would make a lot more sense for the Warriors, which is probably why beat reporters like Marcus Thompson and Tim Kawakami are hearing that the team anticipates ending up with one or more trade exceptions. Using cap room to sign Iguodala would mean losing those TPEs, so a sign-and-trade with the Nuggets looks like the preferred scenario for Golden State, assuming Denver is willing to negotiate.