The Sixers Summer Salary Primer

There is no more internet-y thing than speculating on trades and free agent acquisitions. It may be more fun and provocative at times than games themselves. But usually, I see so many farfetched suggestions for acquisitions that I feel breaking down the cap and the possibilities is a necessary thing for me to do before I depart.

The salary cap changes yearly based upon the income that NBA teams generate. Thus, the cap number used this year, $58.044 million, will undoubtedly change next year, with a likely increase due to the cost-cutting provisions of the new CBA. Teams can go over the cap via the various and plentiful exceptions that the CBA contains. For more specifics on the CBA, visit Larry Coon’s FAQ. The other important number is the luxury tax, which is a certain percentage of another complicated number, but for the sake of simplicity it’s going to be about 20-25% higher than the salary cap. The Sixers, being out of contention and with harsher cap regulations on the way, will likely keep all salaries below the luxury tax number.

Now, for individual players, let’s look at who will be here and who won’t next year.

The following players are under contract for 2012-13, via guaranteed years or already-exercised team options (salary numbers given via HoopsHype, though be warned there’s a chance they may not be accurate):

Elton Brand – $18,160,354
Andre Iguodala – $14,718,250
Thaddeus Young – $8,039,130
Jrue Holiday – $2,674,851
Evan Turner – $5,293,080
Nikola Vucevic – $1,768,800

Combined, those players stand to make $50,654,465, according to HoopsHype’s salaries page. However, as mentioned above HoopsHype may not have the accurate salary numbers for all of them (we can be assured of Holiday, Turner, and Vooch because they are on the rookie salary scale), so just remember that it’s short of the salary cap but likely north of $50 million.

The following players have options that are likely to be declined, and thus will become unrestricted free agents:

Lou Williams (player option) – $6,390,000
Craig Brackins (team option) – $1,503,000

If both options are exercised, the Sixers would have a cap number of $58,547,465, which would be just short of the salary cap from this year. So if either option is exercised, add that number to the $50 million number above. Both would become unrestricted free agents, to my knowledge (I’m less certain about Brackins, but even if he is restricted he will not be getting a qualifying offer).

The following players are unrestricted free agents:

Spencer Hawes
Tony Battie
Xavier Silas

The most notable among the above players is Spencer Hawes, who has been a source of agony and confusion for two years running. Now, to clear up a common misconception, there are cap holds for some unrestricted free agents. Whenever a team has Larry Bird rights (again, Larry Coon’s FAQ offers a better explanation than I ever could of what those rights are), they can sign a player to a more favorable contract than other teams, offering one more year with better raises. Meaning, the Sixers can sign Hawes (the only qualifying player among the three) to a five year deal instead of the usual maximum of four. Now, if they sign Hawes to a five year deal I’ll probably renounce my fandom, but the potential is there. In exchange for these rights, the team has a cap hold for Hawes, meaning they will have a higher cap number until Hawes signs, whether he signs here or elsewhere.

The cap hold, according to Coon, will be somewhere around 200-250% of the previous year’s contract for Hawes, based on it being a qualifying offer on a rookie scale contract. Hawes made roughly $4 million, so the cap hold will be somewhere between $8-10 million. In other words, they’ll have to renounce his rights (meaning they can’t sign him to a longer deal) to have any cap room before he signs.

And the following players, to my knowledge, are restricted free agents:

Lavoy Allen – qualifying offer of $937,195
Jodie Meeks – qualifying offer, amount unknown
Sam Young – qualifying offer, amount unknown

In order to hold rights for a restricted free agent, teams must make a qualifying offer to the player. The qualifying offer allows the team to match a contract given out by another team in the free agency process. So if, for instance, the Sixers extend a qualifying offer to Lavoy Allen, and he receives a 3-year deal on the open market, the Sixers have 3 days to match the offer and retain him. A restricted free agent, once a qualifying offer is made, can also sign the offer and play at that price for one year and then become an unrestricted free agent (like Spencer Hawes did last summer).

UPDATE: By way of Liberty Ballers, Hoops Rumors has Jodie Meeks qualifying under the starter’s criteria under the new CBA, effectively giving him a raise on his qualifying offer. I don’t anticipate the Sixers going for $2.7 million on it, so we’ll decrease the numbers by about a million each.

The qualifying offers also act as cap holds, so the dollars available under the cap will decrease if a qualifying offer is outstanding. My guess is that an offer is made to Allen, whose qualifying offer is just under a million dollars. The Sixers also have three picks in the draft, with the 15th pick getting roughly $1.5 million in salary. They can wait to sign the second rounders and only end up with $53.2 million, not including holds, on the books for cap purposes.

So based on this work I’ve done, the Sixers have $53.2 million expected to be committed to their roster next season, which is not enough to sign any marquee free agents, plus Hawes’ cap hold. However, work can be done to reduce the number if they absolutely need to. The most obvious solution is the amnesty provision, which has had Elton Brand’s name on it since inception. If they wanted to, they can play Brand his $18 million+ salary to go away (minus what any other team may bid) and not have it count under the cap, reducing the bill to just $35.1 million if they also renounce Hawes’ rights (plus minimum salary holds for empty roster spots) by the time free agency starts – enough to sign at least one marquee free agent and roughly half of the real limit, the luxury tax.

The conclusion, then, would be that the Sixers have the tools to make a run in free agency if they chose to this year. But the question is: would that be the right decision?