NBA Free-Agency 2011 - A Look at the Toronto Raptors' Potential Budget

While it may all be a moot point if the lock-out comes into effect, the HQ gives their best stab at Toronto's financial picture.

One last kick at the can.

That's essentially what the NBA has tomorrow to avoid a work stoppage situation, one that would commence at 12:01 AM Friday, July 1st.

Will the meeting make a difference?

It sounds extremely doubtful at this point, and as an article in ESPN.com pointed out this AM, if both sides were that serious about reaching a resolution, a meeting today probably would have taken place as well.

No, the Thursday meeting seems a bit more like a "well, let's just make it look like we gave it one last shot" situation.

So now what?

Well, as mentioned yesterday, clubs will have to proceed for the time being under a "business as usual" facade, essentially until that 12:01 Friday, mark.

And for us at the HQ, we're taking the same approach.

That means then taking a good look at the free agent options that the Toronto Raptors would normally be pursuing during the league's annual free-agency bonanza.

However when I was penning my free agency piece this morning, regarding center options for the Dinos, I realized it would be fruitless to simply toss around player names when we have no idea how much money the Raptors will have available to spend.

With that in mind, and before we get into said options, I figured it would be a good idea to look at Toronto's current financial obligations for the 2011-12 season, and with some help from Sham Sports, I put together the following spreadsheet regarding Toronto's 2011-12 commitments.

As of now, the team has $48,220,531 in firm commitments, assuming that Sonny Weems is back next year at qualifying offer amount of $1,091,100.

However, the team also has about $31M in "cap holds," or, the amount of money that is charged to the Raptors' salary cap number for players who aren't technically under contract.

Without getting into too much of the fine print here, cap holds exist to ensure that a team doesn't allow its entire roster to become free agents, sign other team's top free-agent options, then re-sign their own free-agents using their "Bird Rights," which would allow said team to pay above and beyond the salary cap.

You can read more on this topic at Larry Coon's Salary Cap FAQ page, but the important thing to know is that these holds disappear when a) these players sign again with Toronto, or with a new team entirely, b) these players retire, or c) the Raptors' renounce these players' rights.

The weird thing is that based on the breakdown at Sham Sports, the Raptors have cap holds for not only folks like Joey Dorsey, Julian Wright and Reggie Evans, all of whom Toronto will need to make a decision on regarding their futures with the club, but also Pape Sow, Rasho Nesterovic and Uros Slokar!

Huh?

I'm no capologist so I'm not going to try and get into the nuances of why these guys are still hanging around, but suffice to say that I'm guessing the Raps to clear as much cap space as possible, will renounce their rights, along with those of Reggie Evans, Julian Wright, Alexis Ajinca and Joey Dorsey.

Based on my calculations, this would only leave a cap hold of about $3M for first-round pick Jonas Valanciunas, bringing Toronto's total salary obligations to just over $51M.

So what does that leave Toronto for spending loot?

To get an idea of this, I thought we'd look at a few scenarios.

Scenario 1 - 2011-12 Salary Cap Remains Unchanged from Last Year:

Under the first, we consider last year's salary cap of $58M, and luxury tax threshold of $70.31M.

This would give the Raptors about $7M to use before hitting the cap, and the opportunity to re-sign any of their own free-agents, or add a player using the mid-level exception, up to an excess of almost $20M, before they would be stuck paying the dollar-for-dollar luxury tax.

The bottom line then is that the Raps would have about $7M next year to use to woo a top free agent, and then in the following year, with up to $11M less in commitments, an even bigger chunk of change to use.

Under this scenario though, that's not a lot.

Considering that some of the top free agent options like Tyson Chandler and Nene made over $11M each last season, that's not going to cut it.

In fact that $7M is barely more than last year's mid-level exception amount of $5.765M!

This is a huge point because at face value, it probably means that Toronto won't be able to go after guys like Chandler, unless they back-load the terms of the contracts in a major way.

Scenario 2 - 2011-12 Salary Cap Increases Slightly as per NBA History:

Considering that the lock-out that is looming revolves around the owners looking to cut player salaries, this scenario looks extremely doubtful.

But for the sake of argument, if the 2011-12 salary cap increased 4 per cent (the average increase over the last decade), this would make for a base cap of $60.32M approximately.

This would give the Raps another couple of million to work with, but again, we're still not talking about max salary money that the team could throw around.

Scenario 3 - 2011-12 Flex Cap of $62M:

The latest proposal by the NBA's owners to the NBA Player's association includes a $62M "flex cap."

Under this scenario, the Raps would have even more money to spend, upwards of $11M or so to use, and this would then make them a much bigger player in the free agent market.

But this scenario comes with a caveat.

The mid-level exception would be gone.

The owners "flex cap" proposal would rid the league of the "luxury tax threshold," ostensibly establishing a hard cap and therefore limiting how much teams could spend.  Once you reached a total salary amount of $62M for your team, that would be it, and so for the Raptors, they'd then have to choose between throwing that entire $11M at one player, or divvying things up to address numerous needs.

Scenario 4 - Salary Cap Drops Below 2010-11 Levels:

Uh oh.

While this hasn't been put on the table per se, the NBA Player's Association has proposed a $500M pay cut over the next five years, and that could come in the form of some sort of reduction in the salary cap.

If that's the case, the Raps would have even less to throw around than in the first scenario, and years of spending on the likes of Jason Kapono, Hedo Turkoglu, Jose Calderon and Linus Kleiza will have come home to roost.

Bottom Line:

Maybe we don't know what the new CBA will entail in terms of a salary cap.

But what we do know is that any way you slice it, the Raptors likely won't have a ton of money to use for free-agent purposes.

That's not to say that certain players are completely out of the question.  We've seen Toronto get pretty creative with their finances in the past, and with so much uncertainty for NBA players right now, perhaps they'll opt for some form of long-term security over big immediate paydays.

But I'm not holding my breath for a Nene any time soon, and our free agent scouting reports over the next few days will be indicating as much.