LeBron James‘ future in Cleveland could be tied to the Brooklyn Nets’ performance this season, writes Harvey Araton of The New York Times. The value of the Nets’ unprotected first-rounder that the Cavaliers received in the Kyrie Irving trade won’t be known until much later in the season. If Brooklyn finishes last in the league again, the Cavs will have a 25% shot at the number one selection and their choice of players such as Michael Porter Jr., Luka Doncic and Marvin Bagley.
At this point in the NBA offseason, most free agents who remain on the open market will have to settle for minimum salary contracts, if they receive an NBA offer at all.
There are some exceptions, particularly on the restricted free agent market, where Mason Plumlee just signed a three-year, $41MM deal with the Nuggets. Within the last week or two though, we’ve seen top remaining unrestricted free agents like Shabazz Muhammad, Tony Allen, and Andrew Bogut settle for minimum salary contracts.
That’s good news for several teams who have used all their available cap room and/or exceptions and can only offer minimum salary contracts for the rest of the 2017/18 league year. They won’t necessarily be at a disadvantage when it comes to signing free agents if those players aren’t being offered more than the minimum by teams with the means to do so.
In some cases though, an inability to offer more than the minimum can handicap a team. Dante Cunningham‘s free agent decision this week reflects this — according to multiple reports, the deal Cunningham agreed to with the Pelicans is actually worth $2.3MM, which is more than his minimum salary of $2.1MM. While we haven’t seen the official terms of Cunningham’s new contract yet, it’s possible that the $200K difference was one reason Cunningham chose New Orleans over a suitor like the Timberwolves, who could only offer the minimum.
Teams with the flexibility to offer more than the minimum could also benefit later in the NBA season. For instance, if Dwyane Wade negotiates a buyout with the Bulls and considers which team to join as a free agent, the fact that the Heat have retained their $4.328MM room exception could be a factor — it would allow Miami to make a stronger offer than the Cavs could.
With that in mind, here’s a breakdown of the teams that currently don’t have the ability to offer more than the minimum salary, which is $815,615 for a first-year player:
- Boston Celtics
- Detroit Pistons
- Golden State Warriors
- Houston Rockets: $350 of mid-level exception available
- Los Angeles Clippers: $774,770 of mid-level exception available
- Memphis Grizzlies: $1,440,385 of mid-level exception available, but will use at least $815,615 to sign Ivan Rabb.
- Minnesota Timberwolves
- New York Knicks
- Oklahoma City Thunder
Meanwhile, the following teams have less than $3.29MM (the value of the bi-annual exception) to offer to free agents:
- Cleveland Cavaliers: $2,549,143 of taxpayer mid-level exception available
- Utah Jazz: $1,128,000 of room exception available
- Washington Wizards: $1,902,000 of taxpayer mid-level exception available
Of course, just because a team has an exception available, that doesn’t mean the club will be eager to use it. Teams like the Bucks or Pelicans, for instance, still have various MLE and BAE exception money available, but their proximity to the luxury tax threshold will make them reluctant to offer more than the minimum salary to anyone the rest of the way.
For a full breakdown of how teams have used their mid-level, room, and bi-annual exceptions for the 2017/18 league year, be sure to check out our MLE tracker and BAE tracker.
- Tyronn Lue won’t commit to Kevin Love as his starting center, though the Cavaliers coach said the UCLA product will be more involved in the offense this upcoming season.“Right now we’re just trying to get all of our pieces together and right now Tristan [Thompson]‘s our starter,” Lue tells Joe Vardon of Cleveland.com. “I’m just thinking we’re going to run a lot more stuff through Kevin, more at the elbows, like we’ve done the last year and a half. Just trying to figure out with our new pieces and our new players and just see what works best for us.”
SEPTEMBER 19: The signing is official, Bill Oram of the Southern California News Group relays on Twitter.
SEPTEMBER 18: The Lakers have reached an agreement with free agent center Andrew Bogut, agent David Bauman tells Shams Charania of The Vertical. According to Charania, Bogut will sign a one-year contract with Los Angeles. David Aldridge of TNT adds (via Twitter) that the deal will be worth the veteran minimum, while ESPN’s Ramona Shelburne tweets that it’ll be partially guaranteed.
Bogut, who will turn 33 in November, began last season with the Mavericks, appearing in 26 games (21 starts) for Dallas before being traded to the Sixers in a deadline deal. He was subsequently bought out by Philadelphia and joined the Cavaliers as a free agent, but fractured his tibia in his first game with his new team, ending his season.
Bauman suggested last week that a CT scan on Bogut’s tibia showed “complete healing,” with a radiology report showing that the center’s leg is “solidly united.” With a medical green light, Bogut was expected to find a new NBA home quickly, and ultimately landed with the Lakers, who will add him to a promising frontcourt that already features Brook Lopez, Julius Randle, Larry Nance Jr., Ivica Zubac, and rookies Kyle Kuzma and Thomas Bryant.
[RELATED: Lakers’ depth chart at RosterResource.com]
Even if he’s fully healthy heading into the 2017/18 season, Bogut likely won’t make a major on-court impact at this point in his career — since the start of the 2012/13 season, he has been a role player, averaging 5.9 PPG in 23.5 minutes per contest. Still, he has provided reliable rim protecting and rebounding, chipping in 1.6 BPG and 8.2 RPG during that stretch, so he could have some value in L.A.’s rotation.
According to Aldridge (via Twitter), the Timberwolves made a “major pitch” to Bogut, and the Celtics and Cavaliers were in the mix too. However, the former first overall pick liked L.A.’s “vibe,” not to mention the opportunity to reunite with head coach Luke Walton, who played a part in recruiting the ex-Warrior (Twitter link). While Boston was frequently linked to Bogut during his free agency, Adam Himmelsbach of The Boston Globe (Twitter link) suspects the Celtics didn’t push overly hard to land him.
The Lakers entered the day with 19 players under contract, so their roster will be at the 20-man offseason maximum when they finalize their agreement with Bogut.
Photo courtesy of USA Today Sports Images.
ESPN’s Zach Lowe and Brian Windhorst have published an expansive and well-researched report on NBA teams’ finances, providing details on the league’s revenue sharing system, the impact from national and local television deals, and how a lack of net income for NBA franchises could push the league toward considering relocation or expansion.
The report is wide-ranging and detailed, so we’re going to tackle it by dividing it up into several sections, but it’s certainly worth reading in full to get a better picture of whether things stand in the NBA. Let’s dive in…
Which teams are losing money?
- Nine teams reportedly lost money last season, even after revenue sharing. Those clubs were the Hawks, Nets, Pistons, Grizzlies, Magic, Wizards, Bucks, Cavaliers, and Spurs. The latter two teams – Cleveland and San Antonio – initially came out ahead, but paid into the league’s revenue sharing program, pushing them into the red.
- Meanwhile, the Hornets, Kings, Pacers, Pelicans, Suns, Timberwolves, and Trail Blazers also would have lost money based on net income if not for revenue sharing, according to Lowe and Windhorst.
- As a league, the NBA is still doing very well — the overall net income for the 30 teams combined was $530MM, per ESPN. That number also only takes into account basketball income, and doesn’t include income generated via non-basketball events for teams that own their arenas.
- The players’ union and its economists have long been skeptical of NBA teams’ bookkeeping, alleging that clubs are using techniques to make themselves appear less profitable than they actually are, Windhorst and Lowe note. The union has the power to conduct its own audit of several teams per season, and it has begun to take advantage of that power — according to ESPN, the union audited five teams last season, and the new CBA will allow up to 10 teams to be audited going forward.
How does the gap between large and small market teams impact income?
- Even after paying $49MM in revenue sharing, the Lakers finished the 2016/17 with a $115MM profit in terms of net income, per ESPN. That was the highest profit in the NBA, ahead of the second-place Warriors, and could be attributed in large part to the $149MM the Lakers received from their huge local media rights deals.
- On the other end of the spectrum, the Grizzlies earned a league-low $9.4MM in local media rights, which significantly affected their bottom line — even after receiving $32MM in revenue sharing, Memphis lost money for the season. The Grizzlies will start a new TV deal this year that should help boost their revenue, but it still won’t come anywhere close to matching deals like the Lakers‘.
- The biggest local TV deals help drive up the NBA’s salary cap, with teams like the Lakers and Knicks earning in excess of $100MM from their media agreements. According to the ESPN report, the Knicks made $10MM more on their TV deal than the six lowest-earning teams combined.
- As one owner explained to ESPN, “National revenues drive up the cap, but local revenues are needed to keep up with player salaries. If a team can’t generate enough local revenues, they lose money.”
- Playoff revenue from a big-market team like the Warriors also helps push up the salary cap. Sources tell Lowe and Windhorst that Golden State made about $44.3MM in net income from just nine home playoff games last season, more than doubling the playoff revenue of the next-best team (the Cavaliers at about $20MM).
How is revenue sharing affecting teams’ earnings?
- Ten teams paid into the NBA’s revenue sharing system in 2016/17, with 15 teams receiving that money. The Sixers, Raptors, Nets, Heat, and Mavericks neither paid nor received any revenue sharing money. Four teams – the Warriors, Lakers, Bulls, and Knicks – accounted for $144MM of the total $201MM paid in revenue sharing.
- While there’s general agreement throughout the NBA that revenue sharing is working as intended, some teams have “bristled about the current scale of monetary redistribution,” according to ESPN. “The need for revenue sharing was supposed to be for special circumstances, not permanent subsidies,” one large-market team owner said.
- The Grizzlies, Hornets, Pacers, Bucks, and Jazz have each received at least $15MM apiece in each of the last four years via revenue sharing.
- However, not all small-market teams receive revenue-sharing money — if a team outperforms its expectations based on market size, it forfeits its right to that money. For instance, the Thunder and Spurs have each paid into revenue sharing for the last six years.
Why might league-wide income issues lead to relocation or expansion?
- At least one team owner has raised the idea of expansion, since an expansion fee for a new franchise could exceed $1 billion and it wouldn’t be subject to splitting 50/50 with players. A $1 billion expansion fee split 30 ways would work out to $33MM+ per team.
- Meanwhile, larger-market teams who aren’t thrilled about their revenue-sharing fees have suggested that small-market clubs losing money every year should consider relocating to bigger markets, sources tell ESPN.
- As Lowe and Windhorst observe, the Pistons – who lost more money than any other team last season – are undergoing a relocation of sorts, moving from the suburbs to downtown Detroit, in the hopes that the move will help boost revenue.
What are the next steps? Are changes coming?
- The gap between the most and least profitable NBA teams is expected to be addressed at the NBA’s Board of Governors meeting next week, per Lowe and Windhorst. Team owners have scheduled a half-day review of the league’s revenue sharing system.
- Obviously, large- and small-market teams view the issue differently. While some large-market teams have complained about the revenue sharing system, they’re outnumbered, with smaller-market teams pushing those more successful clubs to share more of their profits, according to ESPN.
- Trail Blazers owner Paul Allen is one of the loudest voices pushing for more “robust” revenue sharing, sources tell ESPN. Some team owners have argued that the system should ensure all teams make a profit, while one even suggested every team should be guaranteed a $20MM profit. There will be “pushback” on those ideas, Lowe and Windhorst note. “This is a club where everyone knows the rules when they buy in,” one owner said.
- On the other end of the spectrum, some teams have floated the idea of limiting the amount of revenue sharing money a team can receive if it has been taking payments for several consecutive years.
- Any change to the revenue sharing system that is formally proposed at the NBA’s Board of Governors meeting would require a simple majority (16 votes to 14) to pass.
- While Isaiah Thomas isn’t expected to be ready to start the regular season due to a hip injury, he’ll attend LeBron James‘ workouts at UC-Santa Barbara this week with his new Cavaliers teammates, a source tells Joe Vardon of Cleveland.com.
Kyrie Irving addressed the circumstances surrounding his desire to leave Cleveland during an appearance this morning on ESPN’s First Take (Twitter link). The All-Star point guard dismissed the idea that his trade demand was motivated by a desire to get away from LeBron James, according to a post from Chris Forsberg on ESPN Now. But Irving also told the hosts he didn’t inform James before making the request and doesn’t care if the Cavaliers star took it as a personal insult. “Why would I have to?” Irving responded to a question over whether he talked to James before meeting with owner Dan Gilbert.
Irving also discussed the loss of a potential “supermax” designated veteran extension by changing teams, saying “You can’t put a price on happiness,” relays ESPN’s Brian Windhorst (Twitter link). He responded to a question on whether he can win a title without James, first by saying “time will tell,” then “absolutely.”
There’s more today out of Boston:
- President of basketball operations Danny Ainge may regret not trying harder to get Jimmy Butler from the Bulls when he was available, writes Shaun Powell of NBA.com in his season preview of the Celtics. He states that Ainge could have easily topped Minnesota’s offer and that Butler would have provided a greater upgrade than switching Isaiah Thomas for Irving. Powell speculates that Ainge was reluctant to give Thomas a max extension next summer considering his hip problems and his age.
- Paul Pierce, who signed a one-day deal with the Celtics in July so he could retire in Boston, is sharing his knowledge with the organization’s younger players, writes A. Sherrod Blakely of CSNNE. He has taken a particular interest in Jayson Tatum, the Celtics’ first-rounder, who has a skill set similar to Pierce’s. “I feel I can help out this young generation and impact that way,” said Pierce, who has landed a job as an ESPN analyst. “I can still talk about the game. I enjoy talking about the game, being around it; traveling to see games. It’s always going to be in my blood. It’s what I’ve been doing my whole life. So, it’s gonna be hard to completely pull me away from the game.”
- Opening arguments were set to begin today in the felony assault trial for Marcus Morris and Markieff Morris, according to The Associated Press. The trial regarding a 2015 beating incident is expected to last 10 days and will conflict with the start of training camp. The Celtics acquired Marcus Morris from this Pistons this summer in a deal to free up cap room to sign Gordon Hayward.
Undrafted out of Oregon State in 2014, Moreland began his career with the Kings, but played just 11 NBA games in two seasons. He was waived by the Cavaliers in training camp a year ago and spent the entire season with the team’s G League affiliate in Canton, earning a spot in the All-Star Game and third team all-league honors. The Pistons used a portion of their mid-level exception to sign Moreland.
- The Cavaliers may have improved after a summer of chaos, according to Shaun Powell of NBA.com. Powell gives the team high marks for the return it got from Boston in exchange for Kyrie Irving, even though new point guard Isaiah Thomas will take a while to get back on the court. He speculates that the package of players, and especially Brooklyn’s unprotected first-rounder for 2018, could motivate LeBron James to remain in Cleveland beyond the upcoming season.
- According to Iman Shumpert, the Cavaliers weren’t exactly surprised when Kyrie Irving asked to be traded, Joe Vardon of Cleveland.com writes. Shumpert adds that Irving didn’t have anything against LeBron James, just that he was eager to move on.
- Construction has begun at Quicken Loans Arena, Jay Miller of Crains writes. The renovations of the Cavaliers‘ stadium were originally scheduled in June but held up by citizens groups that pushed for a referendum regarding the use of tax money for the project.
While the Cavaliers have contemplated trading Kevin Love off and on in recent years, the club currently has no plans to shop or deal the big man, sources tell ESPN’s Zach Lowe.
Cleveland’s current stance on Love doesn’t come as a real surprise. The team already traded one of its Big Three within the last month, sending Kyrie Irving to Boston in a package that included Isaiah Thomas and Jae Crowder. The Cavs lost some star power in that deal and likely don’t want to turn over their roster any more, with the 2017/18 season fast approaching.
While it’s easy to forget now, since the second half of the offseason in Cleveland was dominated by Irving trade talk, Love was one of the players most often mentioned in trade rumors earlier in the summer, particularly around the time of the draft. As Lowe notes – and as multiple other reporters have suggested – the Cavs nearly included Love in a three-team trade that would have landed Paul George in Cleveland in late June. However, the Pacers reportedly got cold feet on that deal, which was said to involve the Nuggets as well.
Now that Love is poised to remain in Cleveland, the Cavaliers are re-designing their offense to feature him more prominently, and may also re-work their rotation to get him more minutes at center, according to Lowe. Love has continued to play well in Cleveland, averaging a double-double (19.0 PPG, 11.1 RPG) last season. However, his numbers have paled in comparison to the ones he posted in Minnesota, where he was more of a focal point and – as Lowe details – he was used more creatively.
As Lowe writes in his in-depth feature on the four-time All-Star, the Cavs “are confident Minnesota Love still exists.” Whether the club’s new-look roster allows that old Love to resurface this season remains to be seen, but for now at least, he won’t have to deal with being the subject of constantly swirling trade rumors.