Just before free agency we discussed the Cavaliers’ salary cap situation heading into the offseason. Since then there have been several developments that have altered that situation. While a couple big names remain unsigned, we now have enough information to make a reasonable projection of how far into the luxury tax the Cavaliers will be at the outset of the 2016-17 season. Here’s a run down of what’s happened so far:
June 28 - The Cleveland Cavaliers pick up the option on Jordan McRae’s contract.
July 1 - The Los Angeles Lakers agree in principle to sign Timofey Mozgov to a four year, $64 million contract, ending his stint with the Cavaliers.
July 6 - The Cavaliers re-sign Richard Jefferson to a two year, $5 million contract using part of the taxpayer mid-level exception.
July 7 - The Cavaliers sign-and-trade Matthew Dellavedova to the Milwaukee Bucks on a four year, $38.4 million contract, ending his time with the Cavaliers. This deal creates a trade exception of $4.8 million, half of Dellavedova’s first year salary.
July 7 - The Cavaliers immediately use this new trade exception to acquire Mike Dunleavy from the Chicago Bulls.
July 15 - The Cavaliers trade Sasha Kaun to the Philadelphia 76ers. This deal creates a trade exception for $1.3 million.
July 15 - The Cavaliers sign Chris Anderson to a veteran minimum contract.
Where does this leave the Cavaliers? They now have 11 players under contract:
- Kevin Love, $21.2 million
- Kyrie Irving, $17.6 million
- Tristan Thompson, $15.3 million
- Iman Shumpert, $9.7 million
- Channing Frye, $7.8 million
- Mike Dunleavy, $4.8 million
- Richard Jefferson, $2.4 million
- Mo Williams, $2.2 million
- Dahntay Jones, $1.5 million (non-guaranteed until August 1, 2016)
- Chris Anderson, $1 million
- Jordan McRae, $900,000 (non-guaranteed until January 1, 2017)
Nine of these contracts are guaranteed. While non-guaranteed, Jordan McRae is very likely to be retained through the season. On the other hand, Dahntay Jones may not remain on the roster. His cap hit is $570,000 more than a minimum contract, so if the Cavaliers choose to retain him expect him to be released then re-signed to a veteran minimum deal. That leaves four or five roster spots yet to be determined.
LeBron James will occupy one of those spots. The only question is whether he’ll sign a long term deal starting at $31 million or another one-plus-one contract starting at $27.6 million.
J.R. Smith is also very likely to fill one of the remaining roster spots. The Cavaliers have his full Bird rights, which means they are one of the few teams that can still pay him what he’s worth. Expect him to sign a new deal for three to fours years at an average annual value (AAV) between $11 million and $14 million.
The Cavaliers spent $2.4 million to acquire the 54th pick in the 2016 NBA Draft and, with that pick, they selected Kay Felder. He remains unsigned at present, but it seems unlikely that the Cavaliers would spend so much to acquire him if they didn’t plan for him to be on the roster. They could sign him to a standard deal for a second round pick, but they could also use the remainder of the taxpayer mid-level exception (just over $1 million) to sign him to a three year deal instead. Either way, expect him to be on the roster at the beginning of the 2016-17 season.
That leaves one or two roster spots available. If James Jones decides to play another season the Cavaliers would certainly offer him a veteran minimum contract. However, after playing 311 minutes in the 2014-15 postseason, Jones only played 55 minutes in the 2015-16 postseason. While his value to the locker room is ever present, his value on the court has dwindled significantly. Perhaps a shift into coaching would be for the best. Either way, the Cavaliers would be wise to keep him involved with the team in whatever role he prefers.
While both Dahntay Jones and James Jones are viable options for the last two roster spots, there are other possibilities. A free agent could be signed to a veteran minimum contract. The Cavaliers could use one of their many trade exceptions to acquire a player with a salary under $9.74 million next season. They could also leave one or both spots open, looking to the mid-season buyout and trade markets to complete the roster.
If we make a few projections we can estimate the the Cavaliers total salary and luxury tax hit next season:
- LeBron James signs a one-plus-one contract starting at $27.6 million.
- J.R. Smith signs a four-year contract starting at $12.5 million.
- Kay Felder signs a three-year contract starting at $964,000 per year.
- The last two roster spots are filled with veteran minimum contracts.
This scenario would result in a total team salary of $125.9 million, which is $12.6 million over the tax line. The Cavaliers are not in the repeater tax next season, so their luxury tax payment would be $22.8 million if they end the season with this team salary. This is significantly less costly than if the Cavaliers chose to retain Matthew Dellavedova. The team salary would be $9.6 million higher, while the tax payment would have increased by a whopping $26.9 million, and that’s only next year.
The Cavaliers have made several solid moves on the margins to keep the roster strong, the payroll manageable, while still maintaining a measure flexibility by continuing to accumulate trade exceptions. Overall, it’s been a good summer for David Griffin and the front office.