The Nets And The Salary Cap

Through three and a half days of NBA free agency, the Nets have run away with the title of most active team. They've agreed to a four-year deal with Gerald Wallace, a three-year deal with Mirza Teletovic, a sign-and-trade for Reggie Evans, a blockbuster trade for Joe Johnson, and, of course, a maximum contract for Deron Williams. How much flexibility do the Nets have to continue adding to their roster? Let's take a look….

Heading into free agency, the Nets' salary cap situation looked like this (cap holds in italics):

• Jordan Farmar ($4,250,000)
• Anthony Morrow ($4,000,000)
• Johan Petro ($3,500,000)
• MarShon Brooks ($1,160,040)
• Jordan Williams ($762,195)
      Guaranteed salary total: $13,672,235

• Deron Williams ($17,177,795)
• Gerald Wallace ($14,250,000)
• Kris Humphries ($12,000,000)
• Brook Lopez ($7,692,458)
• DeShawn Stevenson ($3,000,000)
• Damion James ($1,329,720)
• Sundiata Gaines ($854,389)
• Gerald Green ($854,389)
• Armon Johnson ($854,389)
• Shelden Williams ($854,389)
      Overall total: $72,539,764

As I explained yesterday when breaking down the financial details of the Joe Johnson trade, despite only having $13,672,235 in guaranteed salary on their books coming into the offseason, the Nets won't be using any cap space this summer. Their cap holds easily made them an over-the-cap team, and in order to claim cap room, the Nets would need to renounce the free agents listed above. That would mean losing Bird Rights for those players, so the Nets won't be doing that.

Here's the Nets' new cap outlook for guaranteed salaries, assuming all their agreed-to moves become finalized next week:

• Joe Johnson ($19,752,645)
• Deron Williams ($17,177,795)
• Gerald Wallace ($9,000,000?)
• Mirza Teletovic ($5,000,000)
• Reggie Evans ($1,600,000?)
• MarShon Brooks ($1,160,040)
      Total: $53,690,480

We're not exactly sure what the 2012/13 cap figures for Wallace and Evans will be, but based on the reported total contract amounts ($40MM and $5MM respectively), it's safe to assume their first-year salaries can't be much less than $9MM and $1.6MM. If we pencil in those two figures, the Nets have committed a total of nearly $54MM to six players so far.

What does that mean for the rest of the roster? Well, since Brooklyn decided to use its full $5MM mid-level exception on Teletovic, the team won't be permitted to pass the "tax apron" at any point this season. The apron is considered to be $74,307,000, $4MM above the luxury-tax threshold. Using our tentative cap figures for Wallace and Evans, that would leave the Nets with just $20,616,520 to spend — not just in offseason free agency, but for the entire season.

Needless to say, that makes the team's pursuit of Dwight Howard very, very challenging. Brooks would presumably be a part of any Howard deal, but his cap hit is minimal. With Howard slated to make $19,536,360 in 2012/13, there's almost no way the Nets can realistically hope to acquire him, unless they back out of one or two of their reported agreements.

At this point, even re-signing the rest of their own free agents would be a tough task for the Nets. Humphries made $8MM last year, so if you assume he and Lopez would each require about that amount for 2012/13, you're once again approaching the tax apron that can't be crossed. With less than $5MM to spend on the rest of the roster, the Nets would have to look almost exclusively at rookie-minimum players, and even then, could be in trouble if they have injury problems later in the year.

The Nets have been aggressive in improving their roster so far, and the additions they've made certainly make them a better squad than they were a year ago. But based on the cap limitations the team is up against, it will require some serious creativity to keep adding impact players to the existing roster.

Note: Much of this information was rendered moot within about two hours, as the Nets were able to get Teletovic to agree to the $3.09MM taxpayer mid-level rather than the full MLE. This means the team won't face a hard cap this season. While aquiring Howard will still be very difficult, Brooklyn is free to exceed the $74.31MM tax apron this season, making it much easier to re-sign their own free agents, at least.

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