Shrinking salary cap impacts Knicks
<CITE class=source> By Chris Sheridan
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<CITE> Jesse D. Garrabrant/Getty Images</CITE>What the Knicks do with the newly crowned dunk king is critical to their 2010 plans.
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NEW YORK -- In case you missed it, NBA commissioner David Stern dropped a bomb on the [Only registered and activated users can see links. ] over All-Star Weekend.
It'll impact their pursuit of [Only registered and activated users can see links. ], and it could negate the chances of their ultimate goal -- getting both James and [Only registered and activated users can see links. ].
More immediately, it is affecting their current trade-deadline considerations in their pursuit of fiscal freedom in the summer of 2010. In particular, there is this concern: What to do with double-double machine [Only registered and activated users can see links. ] and his sidekick, Krypto-[Only registered and activated users can see links. ], who would make nice running mates for whichever member(s) of the free agent class of 2010 become the anchor(s) of the franchise heading into the next decade.
The question, for now, is whether the Knicks can afford to keep either or both of them -- and how that'll shape their thinking approaching Thursday's 3 p.m. ET trade deadline.
The bomb, in case you had something better to do Saturday night than watch Stern's annual All-Star news conference on NBA-TV, was that the salary cap is expected to decrease from the current $58.6 million because overly optimistic economic forecasts were calculated into this year's cap and because of the overall economic situation.
"Teams know exactly what's happening. They know what their finances are. They know what the issues are. They also know that the cap is going to start -- the cap is coming down, and the [luxury tax threshold]," Stern said. "If you don't have a lot of high-revenue growth over the next couple of years, there may be a slowdown. But teams know the rules, and they can assess their own situations."
In assessing the Knicks' situation, the cap-clearing trades earlier this season of [Only registered and activated users can see links. ] and [Only registered and activated users can see links. ] produced a $27.3 million decrease in the 2010-11 payroll, but that solved only half of the problem. New York has two players ([Only registered and activated users can see links. ] at $11.3 million, [Only registered and activated users can see links. ] at $6.9 million) under contract for 2010-11, plus player options for [Only registered and activated users can see links. ] ($2.1 million) and [Only registered and activated users can see links. ] ($3.3 million). Also, they'll be committed to paying their 2009 draft pick somewhere from $5.6 million (if they miss the playoffs and win the draft lottery) and $1.8 million (if they finish eighth in the East, make the playoffs and draft 15th.)
That adds up to something between $25.4 and $29.2 million in committed salary for 2010-11, before factoring in whether Lee and Robinson -- both of whom will be restricted free agents this summer -- are also on the roster.
In addition, NBA collective bargaining rules have a little-known section dealing with what are known as "phantom" player cap holds. Let's say a team was so intent on clearing cap space that it filled its roster with nothing but expiring contracts and had no young players on rookie contracts. In other words, such a team could theoretically get its roster size down to zero by renouncing its rights to every player who finished the prior season in that team's uniform.
Such a team would then have a cap number of $0, correct?
This is where the phantom players come in. The rules of the collective bargaining agreement state that every NBA team must always have at least 12 players taking up cap space.
If, for instance, a team has 11 players on its cap when free agency begins on July 8, a 12th player -- a phantom -- is added to the team's cap at the rookie minimum salary (it'll be $473,604 in 2010-11).
Thus, if a team has no players under contract for the summer of 2010, its salary cap number can go no lower than $5.68 million ($473,604 times 12).
Those phantoms will be important, because they'll be eating into the cap room the Knicks will have available to offer to James and Bosh, each of whom will be eligible (if they leave the Cavs and Raptors, respectively, without doing so through a sign-and-trade) for a five-year contract with 8 percent annual raises, at a beginning salary equal to 30 percent of the cap.
(If they stay with their current teams, or if they change cities through sign-and-trade deals, they can get six-year deals with 10.5 percent annual raises. It also should be noted that James, Bosh and their 2010 free-agent class counterparts, including [Only registered and activated users can see links. ] and [Only registered and activated users can see links. ], can take themselves off the 2010 market between now and then if they sign extensions with their current teams that'll pay tens of millions more dollars in the long run.)
The Knicks had been expecting the salary cap to grow to more than $60 million by the summer of 2010, but Stern's pessimistic forecast means it should stay somewhere south of $60 million.
So, if we add up Curry, Jeffries, Gallinari, Chandler, the 2009 pick (at a rough guestimate of $2 million) and seven phantoms to reach the 12-spot mandate, the Knicks will be at roughly $29 million.
Estimates for the salary cap in 2010 range from $54 million (on the pessimistic end) to about $60 million (the hopeful view). Even if we use the optimistic estimate of $60 million, the Knicks will have only about $31 million to split between two max-level free agents. Problem is, each of those two max free agents would be eligible for a starting salary of $17.7 million, which leaves the Knicks about $5 million short of having the amount of space necessary to go after two max guys (and remember, we still aren't factoring Lee and/or Robinson into the equation).
The solution is to get rid of Curry and Jeffries, but the problem with that solution is self-evident.
Curry has played a total of three minutes in a season filled with personal tragedies and physical setbacks, beginning when he reported to camp sick. There would appear to be no chance the Knicks can move him this season, leaving them to hope he is in good enough spirits and shape a year from now, and productive enough, to entice some team to trade for him.
Then there is Jeffries, who the Knicks have tried to showcase by using him as their starting center and having him defend all five positions over the first 52 games of the season. If Jeffries had a reasonable contract and any semblance of a decent offensive game, they might find a taker. But with his contract running for two years after this one, and with a player efficiency rating ranked 303rd out of John Hollinger's 322 eligible players, Donnie Walsh may find his best option for getting rid of him is to insist that anyone making a trade for Robinson or Lee agree to accept Jeffries as part of the package.
Still, Walsh sounded anything but impatient as he discussed the Knicks' cap conundrum at practice on Monday, saying further options will present themselves at the end of June as the draft approaches.
If the Knicks stand pat at the trade deadline, the Lee and Robinson situations -- and their impact on the summer of 2010 fiscal plan -- will move to the forefront beginning July 1.
Lee, who earns $1.79 million this season and will be tendered a qualifying offer of $2.7 million for 2009-10, is expected to seek a multiyear contract in excess of $10 million per season. The Knicks would likely have to abandon their plan of seeking two max free agents if they were to match any such offer sheet this summer -- assuming Lee (who enters Tuesday night's game against the Spurs having posted a double-double in 28 of 30 games) can get that much in what will be a tight market. And any team signing Lee to an offer sheet would try to load as much of his overall salary as possible into the 2010-11 season to further dissuade the Knicks from matching.
Robinson (who's earning $2.02 million this season and will get a $2.91 million qualifying offer this summer) will be seeking roughly half as much as Lee when he becomes a restricted free agent, though the Knicks would be expected to make up their minds on Lee first.
Let's say the Knicks were to retain Lee at $11 million and Robinson at $6 million for 2010-11. Their committed payroll, including Curry, Jeffries, Chandler, Gallinari, the 2009 first-round pick and five phantoms, would be $46 to $49 million.
That doesn't leave them enough money to make a max offer to even one premiere free agent when the Summer of LeBron comes along.
So unless Walsh pulls off the unfathomable and trades away both Jeffries and Curry without including Lee and Robinson in such deals, there simply ain't enough room in this town, cap-room-wise in 2010, for James, Bosh, Lee and Krypto-Nate.
That's just the way the cold, hard salary cap math works out -- an equation we're all now more attuned to thanks to the commissioner's bombshell out of Phoenix.