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NBA News: Analyzing Anderson Varejao's contract extension with Cavaliers

Anderson Varejao has signed a three-year, $30 million extension with the Cleveland Cavaliers. How should we view this deal?

Jason Miller

According to ESPN's Marc Stein, longtime Cavaliers center and fan favorite Anderson Varejao is set to sign a three-year, $30 million extension with the Cavaliers. The Cavaliers have confirmed the deal. The deal will keep Varejao in Wine & Gold through his 35th birthday and, while it probably won't be Varejao's last contract, signals that Varejao is well on his way to finishing his career in Cleveland.

But what does this deal mean for Cleveland on the floor and for its cap space? And is this a good deal for Cleveland? FTS' Chris Manning, David Zavac and Trevor Magnotti will try and answer that question.

What does this mean on the floor?

This deal makes all the sense in the world for the Cavaliers on the court. Varejao, when healthy, is a perfect fit for the "Big Three" era Cavs. He's an excellent rebounder, a vastly improved mid-range shooter and a good passer. On defense, he's not a rim protector by any means, but he's still a very good defender in the post. He's insanely active down low and there are very few bigs in the league Varejao can't adequately defend. He's non-stop movement is essential to that.

The question will be how healthy Varejao is over the course of his deal. As this year shows, the Cavaliers are expecting Varejao to be the starting center and be the anchor of the defense. If he's healthy, Varejao can do that. Ideally, the Cavs would find a backup center to help limit Varejao's minutes, although that could be Tristan Thompson.

But this deal signals that Varejao is going to be an important part of the Cavaliers moving forward. This was expected, but now it is solidified.

How does this affect the Cavs' cap space?

They aren't going to have any. They weren't really likely to have it before this deal, and they are almost certainly not going to have it now. Even with the cap expected to rise, Kyrie Irving, LeBron James, Kevin Love, and now Anderson Varejao will take up the huge bulk of space, if not all of it. The key for the Cavaliers, at least early on, will be to stay above the salary cap, while staying under what is called "the apron".

The Cavaliers will almost certainly not worry about going into the luxury tax for a year or two. Ryan explains what the apron is here, but I'll spell it out briefly here. It's $4 million above whatever the luxury tax line is, and acts as something like a hard cap. Once you go above it, you can't accept players in a sign and trade (which might limit the utility of the Brendan Haywood contract), and you can't sign players to the mid level exception or bi-annual exception. These exceptions could allow the Cavaliers to add depth through free agency.

The Cavaliers didn't extend Tristan Thompson, but his cap hold over the summer is likely to be just south of $7 million. We don't know where the luxury tax line is, but it seems likely that the Cavaliers will be around it or over it. At least for next summer, the Cavs should want to preserve those exceptions. We just don't know if they'll be able to do that yet.

The Final Verdict

This deal isn't bad, by any means. It seems like a high number to a casual observer, but for the role Varejao has played, and will play this year for the Cavs, it's appropriate. He's going to be asked to do a lot, and is probably a top five rebounder in the league in terms of talent. Additionally, I think Varejao received a little bit of a reward for his loyalty to the team over the last four years with this deal. Consider the extra few million he received to be a "Thanks for putting up with Chris Grant and us almost ruining your career with heavy minutes that led to injuries" tax.