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The Raptors have a few salary decisions to make as NBA Free Agency period begins

Nothing unexpected happened at the draft, so here is just a quick refresher of the Raptors' options for free agency.

Nick Turchiaro-USA TODAY Sports

With the draft behind us, and Jakob Poeltl and Pascal Siakam in the fold, and we can turn our attention to what the Raptors will be able to do this summer. The NBA Free Agency period starts tomorrow after all.

Let's take a look at what the Raptors have to work with heading into free agency.

2016 Free Agency

Here is the Raptors' salary situation this summer as it stands now. Biyombo and DeRozan have both officially opted out of their contracts, and are free agents now. Cap projections keep on climbing, with the latest estimate up to $94 million.

Jonas Valanciunas
DeMarre Carroll
Kyle Lowry
Terrence Ross
Cory Joseph
Patrick Patterson
Lucas Nogueira
Bruno Caboclo
Delon Wright
Norman Powell

Cap projection: $94,000,000
Tax projection: $114,000,000

That totals $71.0 million committed salary (including two roster spot cap holds) as a minimum for this summer. Meaning if all free agents are let go, and neither of their draft picks are signed, the team would have $23 million in cap room. Note that a maximum free agent like (in all likelihood) DeMar DeRozan or Kevin Durant will be eligible to sign for about $26.6 million.

Adding cap holds for Poeltl and Siakam brings the total to $73.2 million committed, or about $20.8 million in cap room.

Here are the cap holds for the various free agents for whom the Raptors have rights of some kind. Those rights allow the team to go over the cap to sign the free agent, to various contract amounts depending on the type of rights each player has. Note that DeRozan's has changed from the last article I did, as it came out that he earned even more of his incentive than he had in the past, due to the team making the Eastern Conference Finals. His final salary came up to $10.35 million, driving his cap hold even further up.

DeMar DeRozan
Luis Scola
Bismack Biyombo
James Johnson
Nando de Colo
Jason Thompson

To keep the rights to any of these players, their cap hold has to be kept, which eats into the available cap space. So if the Raptors want to keep DeRozan's full Bird Rights and be able to sign him to the maximum contract he will likely get this summer, they have to keep his cap hold on the books. So the cap space shrinks from $20.8 million to $5.3 million. You may note that this is essentially no cap space at all (as the mid-level exception [MLE], given to teams over the cap, is valued at $5.628 million this summer). That's the situation the Raptors find themselves in -- right up against the cap with their current contracts and DeRozan's cap hold. So unless a trade is made, there will be practically no cap space available to chase free agents.

Which leads us to Bismack Biyombo. As has been covered everywhere by now, the Raptors do not have his full Bird Rights, or even his early Bird Rights. They have only his player rights (the same sort of rights they have for Luis Scola and Jason Thompson). Those sort of rights only allow the team to offer a very tiny raise on the previous year's salary. Biyombo will certainly not be re-signing to such a small amount, so the Raptors would need to clear cap room if they wanted to sign him.

It should be noted that the Raptors have Early Bird Rights for James Johnson and Nando de Colo. Nando has signed with CSKA Moscow, so we can ignore him. But if they wanted to sign Johnson (and keep his rights) they could go over the cap to do so. There is a limit, though -- either a 75% raise over the player's previous salary, or a 4.5% increase on the league average salary the previous year. This season's average salary is estimated at $5.7 million (the exact amount won't be known until after the moratorium ends) which means he can be offered a deal starting at up to $6 million.

So, what are some scenarios for improving the team in free agency?

1) Asset retention and adding role players: bring back DeRozan with his Bird Rights, bring back Johnson with his Early Bird Rights, use the MLE to add a depth PF. Not an exciting off-season in the least, but it's the baseline.

2) Big trade: here again they operate over the cap, and do some or all of the above, but also package some of their assets (Ross, future picks, current prospects, even Joseph or Patterson) for a star or starting quality power forward.

3) Clear cap room, play in free agency: you could let DeRozan walk and clear $20 million pretty easily. But that's still a low bid on star players this summer. Maybe you dump another contract to get to $26.6 million and make a play for Durant or another star. Or, instead, maybe they look to keep DeRozan and trade Ross for futures or lower salary players. Removing Ross clears an additional $10 million, putting the team up to $15.3 million in cap room, enough to bring back Biyombo or chase a mid-level power forward.

When choosing a path (among those listed or something creative all your own), consider the tools at the Raptors' disposal.

If the Raptors operate with cap space, they will have that cap space to offer free agents. Or they can use that cap space to absorb a bigger deal in a trade (say, if the Raptors have $5.3 million in cap space, they can send out $2 million and absorb a $7.4 million deal with their cap space). And if they use cap space (either in trade or free agency), they will get the Room MLE, an exception that allows them to sign a free agent up to a $2.9 million starting salary and a two year deal.

If the Raptors operate over the cap (or end up over the cap at some point), they will instead get the full non-taxpayer's MLE, which lets them sign a free agent up to a $5.6 million starting salary and a four year deal. This exception can be split up to use on multiple players instead of one (the same is true of the other kinds of MLE). They also receive the bi-annual exception (BAE), which is a small exception like the room MLE ($2.2 million starting salary, 2 years).

There is the minimum salary exception, which allows teams to go over the cap to sign any player to a minimum salary deal up to two years in length.

There are also the over-the-cap trade rules, which allow teams to absorb more salary than they send out in a trade even if they are over the cap, though there are limits. Below $9.8 million in outgoing salary, teams can bring back 150% (plus $100,000) of what they send out. Between $9.8 million and $19.6 million, they are limited to bringing back an excess $5 million. And above $19.6 million, they are limited to 125% (plus $100,000). If a team ends up above the tax after making a trade, they are limited to 125% (plus $100,000) for that trade regardless of how much they send out. Teams can reduce salary as much as they like in a trade, only increasing salary is limited by these rules.

So, happy hunting!

As always, feel free to offer up any questions, concerns or commentary -- if something doesn't add up there's either a reason or a mistake.

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