The NBA's offseason news wire has slowed down since Summer League ended, but there's still no shortage of storylines to follow in August. Since the month began, Luka Doncic, De'Aaron Fox, and Mikal Bridges have signed lucrative new extensions, and top restricted free agents like Jonathan Kuminga, Josh Giddey, Quentin Grimes, and Cam Thomas are still working on new contracts.
As we await further updates on the summer's top remaining free agents and extension candidates, I'm taking a closer look today at some of the stories that have caught my eye as of late. That includes taking a closer look at how the new luxury tax rates are affecting projected tax bills, how the extend-and-trade rules might affect players traded this summer, and whether a Kuminga/Giddey double sign-and-trade could really work.
Luke, Here is a wild-**s question after listening to Lacob interview last night where he said they were looking at some “highly unusual scenarios that would involve going over the apron”… (and this is not something he mentioned)… Is there any way that GSW could:
1) first, sign Kuminga to a 2 year extension at, say, $22M.in $25
2) then, sign Horford using the TPMLE, and also sign one or two of Seth Curry, Melton, or Brogdon, staying under the first apron
3) then, do an S&T with Chicago for Giddey at $24M/yr using Brandon Podziemski? Chicago has apparently expressed interest in Podziemski twice since the beginning of last summer, so they seem to have a special appreciation for him. He’s got 2 years remaining at ~$5M/yr, a great value. The Warriors could use either Moody’s $12M/yr or Hield’s $9M also to enable the trade.
At $24M/yr, Giddey would cost more than what the more than the Warriors are sending out, but it seems like the Warriors could stay under the 2nd apron… or, maybe not, and Lacob is willing to spend big.
$171MM for the current roster + $22MM for Kuminga + $8MM or so for Horford and a minimum-salary player would get them to $201MM, which is above the first apron ($196MMish).
That wouldn’t necessarily prohibit them from acquiring Giddey via sign-and-trade, but if they wanted to give him a $24MM salary, it would mean sending out a lot of money (at least $29MM to get below the first apron, but probably several million more than that in order to be able to fill out the roster).
Not really practical. Pretty hard to imagine a scenario in which they re-sign Kuminga and acquire another high-salary player via sign-and-trade without moving one of their top three contracts, which presumably isn’t happening.
Luke, thanks so much for all the detail. Let me set the context better for what may be a coming paradigm shift.
In this case, the goal is NOT to stay below the first apron. The justification for spending above the first apron, even though it doesn’t make GSW a title contender, is to capture a prized asset at a uniquely opportune, short-lived moment.
Lacob covets star players on long (4-5 year) rookie extension deals, believing a team must have some for sustained competitive advantage at an affordable payroll. But these assets are extremely difficult to come by, requiring both a high draft pick and the good fortune that the pick develops as hoped over his first 4 years. Assume that Giddey is viewed by GSW as a “de-risked” high lottery pick that is available now at a price well-below what he’ll command after this season. Assume GSW sees that difference as $10- 15M/yr (as in, a player of Giddey’s value would cost $35M-$40M next summer, when teams are flush.)
Here’s the paradigm switch:
CURRENT PARADIGM:. as a wealthy team, GSW has about $250M in extra revenue each season that it spends based on the team’s potential and their current payroll/tax status. When GSW don’t believe they can have a contending roster, they stay under the first apron. But, when they believe they CAN get put together a Championship contender, they will go to the 2nd apron, maybe even over it.
FUTURE PARADIGM: because great young players on high-value contrasts are so difficult to acquire, be willing to use your war-chest in competitive down years, going over the aprons to acquire them if they’re available at a discount. If you can acquire Josh Giddey now for $25M/yr for the next 4-5 years, even if the effective tax penalties over this period are $100M, that’s a huge cost savings over acquiring him or an equally talented player in future years.
In the new paradigm, a wealthy team would shift its heavy spending years away from those years where they have the most talent to years where they acquire talent. Does this make any sense?
You have to stay under apron 1 tho to take in a s and t (Giddey)
Crunch, thanks. That was the piece I was missing.
@aristotle I think the Warriors would prefer to operate over the first tax apron if they can. As you say, money isn’t really an issue, and it’s the best way to maximize their remaining resources.
As Cap & Crunch mentioned though, acquiring any player via sign-and-trade results in a first-apron hard cap. So it’s not about sticking to a goal of being below the first apron — it’s about literally not being able to surpass it if they acquire Giddey or anyone else via sign-and-trade. It’s why I don’t expect them to sign-and-trade for anyone.
> I think the Warriors would prefer to operate over the first
> tax apron if they can.
That’s certainly the conventional wisdom, but there are a lot of indications that the status quo is unstable. It’s uncomfortable to pay big taxes when you expect OKC to win 20 more games than you. IMO, if it’s clear before the trade deadline that GSW is not a contending team, perhaps because of injury, they will cut spending. At the front-office/ownership level, the focus is more on what comes next than how to extend the current decline. Until then, we wait.
Maybe they’ll pull of a Giannis deal at mid-season. But they could just as easily start a rebuild then. But I don’t seem them running this group back next season.
I think its always been pretty safe to operate under GSW will most likely carry 14 players till mid season and most likely leave about a 2~3 M cushion to apron 2 before the trade deadline so I expect them to land around 205 flat season opener (*Apron 2 207.8)
I’m interested in the 2 – 3 vet mins they got in store for the 13th/14th spots . Some talent left but we cant assume its all traveling to Norcal. Id kinda be disappointed if its Payton II ilks again, much rather an Amir Coffey
Luke, I think the Warriors will take advantage of the same cap loophole the Knicks utilized in their acquisition of Karl Anthony Towns, sign-and-trading some of their own unheralded FAs and sending them to a third team to count as salary matching and allow the Warriors to be a second-apron team instead of a first-apron team.
Example:
Warriors get Malik Monk and a Kings top-4 protected 1st
Kings get a signed-and-traded Jonathan Kuminga
Hornets get a Warriors’ 2nd rounder, $7.5M cash, and a signed-and-traded Pat Spencer, Kevin Knox, and Braxton Key, all on deals with a one-year guarantee for a $1 above the minimum.
This structure ensures the Warriors are sending out more than they are taking in, even accounting for Kuminga’s 50% outgoing salary, thereby allowing them to be a 2nd apron team. That’s an extra $12M in spending power ($207M second apron) to build out the ‘25-26 roster for the Warriors.
Certainly a possibility if they have legitimate interest in Monk — not sure whether their apparent lack of interest is about the potential hard cap or if they just don’t love his value/roster fit at that price point.
Based on the price set in the Towns deal, it would probably take more than one second-rounder for that third team (the Hornets got three in the KAT trade, one for each signed-and-traded player), and I think the Warriors might need to use different players or go higher than $1 above the minimum for their signed-and-traded guys to get to the necessary price point (given the three-year, $63MM deal the Kings apparently offered Kuminga), but there’s definitely a way to make it work.
Very good read… i liked the way it flowed. Salary cap issues are where most fanatics end their passion. But it’s very insightful to see how complex this Kuminga situation really is. With how complicated the salary and aprons and taxes already are then factor that there is a huge evaluation difference in what Kuminga is worth at this point or in two years. I feel that this is why the New England Patriots did so well. They knew to trade a guy earlier than you could have to make sure the value is there and the timing and chemistry with the new players had time to show up. Not saying Bob Myers was any better. But this feels more like an education in what might need improving both from and organization and the CBA rules.