NBA Teams That Can’t Offer More Than The Minimum

September 20th, 2017 at 4:01pm CST by Luke Adams

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.

Andre Iguodala Nearly Signed With Rockets In Free Agency

September 20th, 2017 at 9:13am CST by Luke Adams

An eventful series of free agent meetings in July had Andre Iguodala on the verge of signing with the Rockets before the Warriors swooped in and met his demands at the last minute, Chris Haynes writes in a fascinating piece for ESPN.com.

Back on July 1, we heard that Iguodala was expected to circle back to Golden State after getting an offer he liked from Houston, but Haynes goes into far more detail in describing the process that got Iguodala to that point. Here are a few highlights from the ESPN report:

As free agency opened, the Warriors increased their initial offer for Iguodala to $42MM over three years, with a partial guarantee in year three, according to Haynes. However, the swingman wasn’t satisfied with Golden State’s pitch and opted to take meetings with several suitors rather than accepting the Dubs’ offer.
The Lakers were the first team to speak with Iguodala, but as was the case throughout free agency, L.A. only offered one year, aiming to preserve 2018 cap room. The Lakers’ one-year offer was worth $20MM, per Haynes.
Iguodala met with the Spurs next, and San Antonio offered a fully guaranteed four-year deal. The Spurs only had their mid-level exception to offer, meaning they couldn’t offer more than about $36MM, but Iguodala – who likes being involved in the tech world – was intrigued by the team’s proximity to Austin.
The Kings met with Iguodala next and, armed with about $43MM in cap room, essentially asked him to name his price — within reason. If Iguodala named a price that Sacramento was willing to match, the Kings wanted a commitment on the spot, according to Haynes. Not wanting to commit right away, the 33-year-old held off on specifics, but recognized that Sacramento likely had the means to offer him the most money.
The Rockets were the next team to make a pitch to Iguodala, and one source within his camp called it “the best recruiting presentation of all time,” per Haynes. Houston was limited to its mid-level exception, but president of basketball operations Daryl Morey began proposing “lucrative sign-and-trade scenarios like a mad scientist” in an effort to meet Iguodala’s demands. Following the meeting with the Rockets, Iguodala cancelled his remaining meetings, including sit-downs with the Sixers, Clippers, Timberwolves, and Jazz, and there was “a strong sentiment that he was Houston-bound.”
Iguodala decided to meet one last time with the Warriors, though he expected to use the meeting as an opportunity to say goodbye, sources tell Haynes. Golden State offered a fully guaranteed three-year, $45MM deal, but Iguodala wasn’t budging from his asking price of $16MM per year, and intended to sign with the Rockets if Golden State didn’t meet that demand.
Shortly after Iguodala’s meeting with the Warriors ended, GM Bob Myers went to team owner Joe Lacob to ask for a little more money, and received approval to offer $48MM over three years, which was enough to bring Iguodala back into the fold.

NBA’s Board Of Governors To Examine Revenue Sharing System

September 19th, 2017 at 12:15pm CST by Luke Adams

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.

Details On Rudy Gobert's Incentives

September 17th, 2017 at 9:57pm CST by Luke Adams

Rudy Gobert‘s extension with the Jazz, which goes into effect this year, pays him an extra $1MM if he’s named to the All-Star team (not as a replacement), plus an extra $750K for making an All-Defensive team and meeting certain rebounding criteria. Another unusual incentive in Gobert’s deal? He makes an extra $250K if his defensive rating is below 100.

[SOURCE LINK]

Mitrou-Long Adds to Utah's International Presence

September 16th, 2017 at 9:46pm CST by Arthur Hill

Naz Mitrou-Long is the latest international player on the Jazz roster, writes Jody Genessy of The Deseret News. The 24-year-old Canadian signed with the team this week, likely for a non-guaranteed camp contract. Mitrou-Long seems to have little chance at a roster spot with Utah, which has Rodney Hood, Alec Burks and first-round pick Donovan Mitchell entrenched at shooting guard. The Jazz also have 15 guaranteed salaries, so Mitrou-Long appears headed to the G League.

Jazz Move Forward With Donovan Mitchell

September 14th, 2017 at 7:01pm CST by Austin Kent

The Jazz are still reeling from the loss of Gordon Hayward this summer but have an intriguing long-term prospect in lottery pick Donovan Mitchell, Shaun Powell of NBA.com writes.

Jazz Sign Nate Wolters To Two-Way Deal

September 13th, 2017 at 4:35pm CST by Arthur Hill

SEPTEMBER 13: The Jazz have officially announced Wolters’ two-way contract. Having also signed Naz Mitrou-Long today, Utah now has 19 players on its roster.

SEPTEMBER 12: Nate Wolters is close to signing a two-way contract with the Jazz, tweets Tony Jones of The Salt Lake Tribune.

The 26-year-old point guard was a second-round pick in 2013 and began his career in Milwaukee. He started 31 games as a rookie, but was waived by the Bucks the following season and caught on briefly with the Pelicans. Wolters was in training camp with the Nuggets last year before spending the season in Serbia.

Wolters would fill the second two-way slot in Utah and would give the team 18 players in camp. The Jazz already have 15 guaranteed contracts, so the odds are against Wolters earning a roster spot.

Jazz Sign Naz Mitrou-Long

September 13th, 2017 at 2:45pm CST by Luke Adams

The Jazz have signed rookie free agent Naz Mitrou-Long to their 20-man offseason roster, according to RealGM’s log of official NBA transactions. While details of the agreement haven’t been reported, it figures to be a non-guaranteed camp deal.

A 6’4″ guard out of Iowa State, Mitrou-Long appeared in 35 games during his senior year in 2016/17, averaging 15.1 PPG, 4.6 RPG, and 2.7 APG. More than half his shot attempts came from beyond the three-point line, and he was effective from outside the arc, making 2.8 threes per game at a 38.4% clip.

Although he went undrafted in June, Mitrou-Long caught on with a pair of NBA teams in July, playing for the Pacers in the Orlando Summer League and the Kings in Las Vegas.

Mitrou-Long isn’t likely to crack the regular season roster for the Jazz, since the club already has 15 players on guaranteed salaries. However, there’s a good chance the Canadian-born guard will end up as an affiliate player for the Salt Lake City Stars, Utah’s G League squad.

Jazz Add David Morway, Justin Zanik To Front Office

September 13th, 2017 at 12:30pm CST by Luke Adams

The Jazz have issued a press release announcing a handful of changes to their front office, confirming that they’ve hired David Morway and Justin Zanik as assistant general managers. The club also promoted Steven Schwartz to director of basketball operations.

Utah’s agreements with Morway and Zanik were initially reported earlier this summer by ESPN’s Adrian Wojnarowski.

Morway has nearly two decades of experience in NBA front office, having originally joined the Pacers in 1999. He was promoted to general manager by Indiana in 2008 and spent four years in that position before resigning. He subsequently joined the Bucks as an assistant general manager and then spent the 2016/17 season as a basketball operations consultant for the Jazz.

As for Zanik, his return to Utah represents a reunion for him and the Jazz — Zanik held an assistant general manager position with the franchise until 2016, when he left to join the Bucks. Milwaukee appeared to be grooming Zanik as the eventual replacement for general manager John Hammond, but the club passed over him earlier this summer following an unusual GM search, opting to promote Jon Horst instead. Zanik left the franchise in the wake of that decision.

Morway and Zanik will work under GM Dennis Lindsey in Utah’s revamped front office.

Rodney Hood Responds To Challenge From Jazz GM

September 12th, 2017 at 7:11pm CST by Luke Adams

Rodney Hood‘s offseason began with a “frank” exit meeting the day after the Jazz were eliminated from the playoffs, as general manager Dennis Lindsey challenged the fourth-year shooting guard to become more efficient and more consistent — and to prepare for a larger role. As Tony Jones of The Salt Lake Tribune details, Hood has responded to that directive by staying in Utah for the summer and working harder than ever to get ready for the 2017/18 season.

“There were a lot of challenges we gave Rodney,” the Jazz GM said. “What he needs to be doing, his commitment level to his development. And he’s responded this summer. He’s going to be given a prominent role, and his development will be significant to us.”

With Gordon Hayward having left the Jazz for Boston, Hood will be required to take on a greater share of the scoring load in Utah, and as Lindsey suggests, the team’s success figures to hinge in part on how Hood responds to that increased responsibility.