Pelicans, Bucks, Others To Be Hard-Capped

The NBA salary cap is somewhat malleable, with various exceptions allowing every team to surpass the $101.869MM threshold when that room is used up. In some cases, teams blow past not only the cap limit, but the luxury-tax limit as well, with clubs like the Thunder, Warriors, and Nuggets projected to go well beyond that tax line this year.

The NBA doesn’t have a “hard cap” by default, which allows those clubs to build significant payrolls without violating CBA rules. However, there are certain scenarios in which teams can be hard-capped. When a club uses the bi-annual exception, acquires a player via sign-and-trade, or uses more than the taxpayer portion of the mid-level exception, that club will face a hard cap for the remainder of the league year.

When a club becomes hard-capped, its team salary cannot exceed the tax “apron” at any point during the rest of the league year. For the 2018/19 league year, the apron is $129.817MM, approximately $6MM above the $123.733MM tax line.

Based on the agreements reported so far in free agency, it appears that five teams are set to hard-cap themselves for the 2018/19 league year. Here are the details on those teams:

New Orleans Pelicans

When the Pelicans agreed to sign Elfrid Payton to a one-year, $2.7MM deal, we assumed they’d use a portion of their mid-level exception rather than their bi-annual exception, to avoid creating a hard cap. However, the team then reached a two-year agreement worth a reported $18MM with Julius Randle.

It now appears that the Pelicans will sign Randle using their full ($8.641MM) mid-level exception. With Rajon Rondo headed to the Lakers, it’s possible the two teams will arrange some sort of sign-and-trade agreement to allow New Orleans to preserve its MLE, but there’s been no indication so far that that’s in the works. And either way, the Pelicans would become hard-capped.

The projected salaries for Randle and Payton bring the Pelicans’ total team salary to about $112MM. With Rondo and DeMarcus Cousins headed elsewhere, New Orleans likely doesn’t have any other big-money investments coming, so the hard cap shouldn’t be a major issue.

Milwaukee Bucks

The Bucks agreed to a deal with Ersan Ilyasova worth a reported $21MM over three years. The taxpayer mid-level exception would only allow for about $16.8MM over three seasons, so Milwaukee figures to exceed that amount and create a hard cap.

Taking into account Ilyasova’s projected salary, the Bucks are up to almost $108MM in guaranteed team salary. Keeping Brandon Jennings and Tyler Zeller, who have non-guaranteed deals, would increase that number to nearly $112MM. That would leave less than $18MM in breathing room under the hard cap as Milwaukee considers what to do with restricted free agent Jabari Parker.

Minnesota Timberwolves

When word of the Timberwolvesagreement with Anthony Tolliver initially surfaced, the one-year deal was said to be worth about $5-6MM. That amount lined up with the taxpayer mid-level exception ($5.337MM), so it made sense that Tolliver would receive that taxpayer MLE. However, subsequent reports said the forward will actually earn $5.75MM, meaning Minnesota will be using the full MLE and will become hard-capped.

Tolliver’s signing isn’t yet official, so it’s possible that final number will look a little different, but if the Wolves’ flexibility this season ends up limited by paying Tolliver an extra $400K, that move will be questioned. For now, Minnesota projects to have a team salary of about $118MM for 11 players, assuming they stretch Cole Aldrich‘s partial guarantee. That should give the Wolves enough room to fill out their roster and stay well below the apron, perhaps even avoiding the tax too.

San Antonio Spurs

Like the Timberwolves, the Spurs appear to have imposed a hard cap on themselves by barely exceeding the taxpayer mid-level exception. A two-year deal using the tax MLE would end up just shy of $11MM, but San Antonio’s reported agreement with Marco Belinelli is for $12MM, suggesting the team will be using its full MLE.

Taking into account new deals for Belinelli and Rudy Gay, the Spurs appear to have a team salary of approximately $108MM. That puts them more than $20MM below the tax apron, so as long as they don’t have to break the bank for restricted free agents Kyle Anderson, Davis Bertans, and Bryn Forbes, they should be fine.

New York Knicks

In order to secure a commitment from Mario Hezonja, the Knicks had to go over the taxpayer mid-level, agreeing to sign the veteran forward for $6.5MM. New York will be using the full MLE, dedicating most or all of the remaining portion to second-rounder Mitchell Robinson.

The hard cap shouldn’t be a factor for the Knicks, who are currently at about $109MM in team salary, and don’t have any other major expenditures planned.

Salary information from Basketball Insiders was used in the creation of this post.

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11 thoughts on “Pelicans, Bucks, Others To Be Hard-Capped

  1. glk5150

    I am really interested to see what the Spurs do. Also, on a side note, has anyone else notice how espn has turned it’s comment section off?

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  2. The NBA is a joke with their “salary-cap” garbage. Teams can have salaries that go 30-50 million OVER the “salary-cap” with no penalties. The Bucks are hard-capped by being under the “salary-cap”.

    What a joke.

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  3. The NBA “salary cap” is a joke. They seem to just make it up as they go.

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  4. Don’t like hard caps, is not the American way, everyone should be free to get as much as they can, not trying to make all equal, I do like a flex cap. Though San Antonio seems to may have made a bit of a mistake hard capping themselves, not surprising Minny did, but all the fans always rave about the Spurs, but this doesn’t seem to be a very smart move, right?

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    • Connorsoxfan

      Hard capping yourself isn’t a big deal for some organizations, because if the owner sets an internal budget below it anyways, there’s no harm. Belinelli is a lights out shooter though, so I have no problem with the Spurs making that signing. The spurs are far enough below the hard cap they haven’t really limited their flexibility so in this case it doesn’t matter. Plus Belinelli signed a 2 year deal which means they’ll still have him next year but without the hard cap, so there’s some value there because they’ll get their exception back while keeping another rotation player.

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  5. imindless
    imindless

    Warriors should be hard-capped. Amazing that there teak salary is well over 101 and then other teams are expected to compete. Ridiculous.

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    • xtraflamy
      xtraflamy

      Not ridiculous. The system is obviously set up to encourage teams to re-sign their own players. The Warriors have amazing players and they re-sign their core, and else gets league minimum or an exception.

      It’s the rules, and all the people that really matter (players, owners, NBA) have agreed to the system.

      All the fans who complain that the Warriors operating within the rules and succeeding is unfair should just stop. Use your dollars to complain (stop subscriptions, quit buying tickets and merchandise) and maybe your teams will listen and start to draft better, spend more, and develop systems and cultures that make their team a desirable destination.

      Lacob wants to win more than he wants to save tax on penalties — maybe your team’s ownership could consider it.

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