Something, something, Chandler Parsons' hair...
Now, I'm not BaconBacon, so everyone temper your expectations. There will likely be formatting errors and/or slight miscalculations here. However, I do give everyone unrestricted permission to call me out on spelling, grammar, or punctuation mistakes.
I was preparing to write this as a response to WitMi's "pay Chandler Parsons $50 million" proposal in another thread, but as I was compiling the numbers, it got really long and I decided it might be worth its own thread. The main objective here is to determine the implications of making a big Restricted Free Agent (RFA) offer to Parsons, as the Rockets are rumored (not rumoured) to be declining their final-year option on his rookie contract. This means Parsons becomes a RFA this summer, rather than an Unrestricted Free Agent (UFA) next summer. This had to be a tough decision for the Rockets, since they could have had one more year of Parsons' solid production (roughly 16 Pts, 5 Reb, 4 Ast, and 1 Stl per-36 minutes, with a PER of 16 and 57% True Shooting) all for the low, low price of $964,750. Houston appears ready to forfeit that bargain year in exchange for the opportunity to match any contract offer he may receive this off-season. Of course, it could all blow up in their collective faces if another team does something crazy and offers him the maximum. As they say, "it only takes one."
Anyway, the hypothetical question is this: If the Cavaliers offer Parsons a 4-year, $50M contract, and the Rockets decline to match their offer, how would that affect the team's salary cap situation moving forward? In this (completely-fabricated, yet possibly plausible) scenario, the Cavs also draft Joel Embiid with the #1 overall pick in the 2014 NBA draft.
First, let's take a look at the rough salary numbers for the 2014-15 season:
- Parsons - $12M
- Anderson Varejao - $9.7M
- Kyrie Irving - $7M
- Jarrett Jack - $6.3M (ugh)
- Anthony Bennett - $5.6M
- Joel Embiid - $5.5M (120% of the rookie scale salary for the #1 pick)
- Tristan Thompson - $5M
- Dion Waiters - $4M
- Tyler Zeller / Sergey Karasev / Carrick Felix - $4M total
- Alonzo Gee - $3M (Juuuuuust kidding)
That brings the payroll to roughly $59M, committed to 11 players. Throw in Matthew Dellavedova's ~$1M if you wish. They could also possibly re-sign C.J. Miles at ~$4M, which brings us to about $64M with 13 roster spots filled. This is barely over the projected cap of $63.2M, and nowhere near the luxury tax. They could also replace Varejao with Spencer Hawes if David Griffin feels the team needs more big-man spacing (although, I am personally opposed to re-signing Hawes long-term if we draft Embiid), or find a way to shed Andy's salary (via cut or trade). The Cavs have a ton of flexibility when it comes to taking-on and/or cutting salary. This is a good thing.
The more complicated situations (and unknowns) arise in the subsequent years, when Kyrie will (presumably) be earning a Max or "Super-Max" salary. Other important variables include Tristan's possible extension or departure as a RFA and Dion's value as he moves toward the same juncture of his career. As with all future scenarios, assumptions must be made. And I'm the one writing this piece, so I'm the one who gets to make them. In _Swirving's ideal world, Tristan ends up with an $8M salary over 4 years, whether it is via an extension this summer or an offer the Cavs match in RFA next summer. Kyrie also signs (and earns) his Super-Max deal. Varejao comes off the books, and the team picks up all its options on the young players.
In this case, the 2015-16 roster and payroll shape up like this:
- Irving - $20M
- Parsons - $12.5M
- Thompson - $8M
- Jack - $6.3M (still ugh...but the last guaranteed year, so woohoo!)
- Bennett - $5.8M
- Embiid - $5.8M
- Waiters - $5.1M
- Zeller / Karasev / Felix - $5.2M total
- Miles - $4.2M
By my calculations, that's just about $73M spread across 11 players. Again, above the cap, but far below the projected luxury tax of $81M. Hopefully by this point, Kyrie is playing up to his potential as a superstar, one of Tristan or Bennett has established himself as a solid starter at power forward, while the other has formed a formidable tandem with Zeller off the bench, Parsons is providing solid production on the wing, Embiid has stepped in as the starting center, and Dion has either figured out how to play with Kyrie or is killing bench units as a super-6th man.
I won't go into this much depth regarding future years (mostly because I'm lazy and already wondering why I bothered doing this), but the future looks sustainable. Depending on the salary Waiters' play dictates, who the next backup point guard is (and how much he makes - please, not $6M+), and what Anthony Bennett becomes, the roster may look a lot different after the '15-'16 season. The good news is that the team's cap sheet should remain fairly flexible, having "big money" committed to just two players (Irving & Parsons).
Perhaps the biggest advantage to bringing in an expensive (and useful) player this off-season is that his deal will expire just before Embiid is due for (hopefully) an expensive extension of his own in 2018-19. With both the players and the owners eligible to opt-out of the current CBA as early as 2016-17, the financial landscape of the league may change significantly, but according to Larry Coon (the world's resident expert on the CBA and salary cap), it may be the players who stand to profit this time around:
My prediction is that the players will opt-out of the agreement in 2017 because they will feel they gave back in 2011, the system is now fixed, there’s a lot of new money rolling in, the teams are now making money hand over fist, and they will want to regain some of their previous concessions as well as receive their fair share of the new money. Further, the league will be more obliged to give it to them.
So I expect the players to opt-out in 2017, and for the league to impose a lockout on July 1, 2017 (because they can’t do business without an agreement in place), However, negotiations will be quick and smooth (similar to 2005), and there will be a new CBA in place in time for the 2017-18 season to begin on time.
If Coon's prediction comes to fruition, it could have an opposite effect compared to the last lockout. This time around, some player salaries signed under the old CBA became albatrosses (I refuse to say "salbatross") overnight. Next time, it may swing the other way, making old-CBA contracts somewhat of a bargain. This would cost the Cavs more money on Embiid's extension, but it would mean Irving, Parsons, and Thompson/Waiters (if they are extended) would likely be playing on below-market deals. Who knows? Not this guy, and not even the almighty Larry Coon. But it could happen - sort of like the whole Thunder/James Harden re-visitation by Zach Lowe last week.
If you've read this far, I would like to subscribe to your newsletter. In it, please tell me how you feel about offering $50 million to Chandler Parsons.