The Raptors have a lot of decisions to make regarding NBA free agency and not a lot of time to make them. The NBA draft is on June 23rd! Will they sign DeMar DeRozan and Bismack Biyombo? One or the other? Neither? I'm here to wildly speculate about the future and Daniel Hackett is here to reign me in.
It's Raptors Sliding Doors.
In case you missed it, read Sliding Doors Part 1 here.
Scenario 2: The Likely Turn of Events
DeMar DeRozan Re-signs and Bismack Biyombo Leaves in Free Agency
Grant: So Hackett, yesterday's scenario was pretty depressing. Let's move on to the scenario I feel is a lot more likely; namely, the Raptors will empty a Brinks truck on DeMar DeRozan's lawn, and let Bismack Biyombo earn his money south of the border.
A couple questions -- if the Raptors retain DeRozan, they're clearly in a win now mentality, with a roster that will have lost their primary rim protector. So what (realistic) contract would be the most advantageous for them to try and get DeRozan to sign? If he wants a true max, does that hurt their ability to bring in another player via trade? If he signs for 5/110, is that noticeably more advantageous than him signing for 5/130 or 5/144 (the projected max)?
Hackett: If DeRozan is being kept, pretty much no matter what he signs for, the Raptors are lined up to have $3.8M in cap space. By retaining his rights, his 15M cap hold would then take up most of their 18.8M in theoretically available space. This is essentially no cap space at all, as if the team operates over the cap, they get the mid-level exception (6M). So, that's the starting point - the team can re-sign DeRozan because they have his Bird Rights, and they can't currently re-sign Biyombo because they don't have his, and they don't have enough space for his new deal under the cap.
So what does DeRozan sign for, and what impact does that have on what else they can do this summer? Well, DeRozan's maximum salary is projected right at 26 million. Whether he signs a full 5 year max contract with the highest allowable raises (5 years, 144 million) or takes a more team friendly flat deal at 26 million per year, for this summer he'll be about 26 million on the cap regardless, once he signs. I suppose there is a possibility that he signs an even cheaper deal (say, 5 years, 110 million, a few million below the max other teams can offer on a per year basis, but higher in cumulative dollars), but that seems unlikely to me. Let's assume a maximum salary this summer, whether it is on a flat contract or a true max deal.
Grant: I think that's a fair assumption. For me, that 5/110 number is the dream scenario-- it nets DeRozan more money that he could get from another team in free agency, and gives him an average annual value of 22 million. But it's a lot of money to ask him to leave on the table. The only scenario where I see it happening is if the team plays the card that they'll be unable to retain Kyle Lowry (sure to opt out of his player option following this season) unless DeRozan takes a lower number, As you've pointed out previously, this isn't actually logistically true, but even if it were, it's tough to fathom him taking that much of a hit. But one can dream!
Hackett: Right, so if DeRozan is signed for 26 million, that brings the team salary to 99.8 million. The tax threshold is projected at about 112 million. Assuming that the team uses the mid level exception on a free agent, that comes to 105.4 million committed salary. At this point the team has 14 players signed, so only one spot left to fill with those 6.6 million or so dollars.
Now, if the team wants to stay below the tax that's the wiggle room they have. If they don't care about the tax, but want to be able to use the MLE like we assumed, then they have to stay below the hard cap, which is 4 million above the tax (about 116 million), so they'd have 10.6 million in wiggle room. If the team is done making moves with DeRozan and the MLE, then this is all moot, as 6 million is plenty of room to fit in a minimum salary or the bi-annual exception to fill out the roster. But if the team wants to make a trade for a star PF, for example, they need to be able to absorb that extra salary.
Grant: This is where I come in. Look, I realize it's unrealistic, and I realize it probably won't happen. But I want a star power forward, just like the rest of us do. Do it Hackett. Make my dreams come true. Get me Paul Millsap.
Hackett: Let's start with the assumption that the Raptors don't want to pay the tax next season. So they have 6.6 million to work with as a starting point. If the Raptors are targeting any big name player, either a free agent in a sign and trade or a star already on a contract, they are looking at a likely returning salary range of 15 million to 26 million.
Grant: I believe they call that 'the Millsap Window'.
Hackett: OK, two scenarios for Millsap specifically: They could in theory trade for him at the draft or in the summer. If they trade for him at the draft, he makes only 18.7M. But it's harder to figure a trade because Ross is on his poison pill deal, so you'd have to build it around DeMarre Carroll, and I don't think Atlanta would be interested if they are looking to re-tool and go a little younger.
Grant: I concur. The only way Atlanta is moving Millsap in the first place is if they're totally blowing things up.
Hackett: So looking at a trade in July, Millsap's salary goes up to 20.1M. To absorb 20.1M (assuming the Raptors are operating over the cap) they need to send out 16M in salary. Ross is 10M. Then the other 6M you can do a few things. Patterson makes 6M, so that would do it, but obviously the ideal would be to keep him. Atlanta would probably would be looking for a couple of our prospects in the deal - say, Wright and our 27th pick this year. The 27 won't count for salary unless we are willing to sign the pick, wait for a month, and complete the trade then. But assuming Wright is dealt the required salary drops to 4.5M. We could sign and trade James Johnson to a 3 year deal at 4.5M per year (with the final two years unguaranteed, so Atlanta could waive him after year one) if he is open to a pay day deal. Neither of these scenarios put the Raptors anywhere near the tax, so no worries there.
Grant: I like the sound of this! Mainly because it seems like it's actually doable, in this magical make-believe land we've constructed where the Hawks have lost the will to live. I do think it would take a bit more than the package you mentioned. I feel like for Atlanta to move a player of Millsap's calibre, you'd be looking at giving up Ross, plus the 9th pick, and whatever other way you could add that 6.5 million needed, and maybe even one of the two firsts next season.
To go further down this delightful rabbit hole, I actually think it might be interesting for Toronto to include Cory Joseph (blasphemy, I know)-- if Atlanta moves Jeff Teague as is rumoured, they'll need a third guard-- and try to get Atlanta to include Kyle Korver, who's an expiring deal at roughly 5.25M for 2016-17. Korver definitely slipped a bit last year, but he's still a 40% three point shooter and the Raptors could use some consistency from deep. Being able to use him off the bench would be immensely valuable for Toronto, and on a one year deal, that's as low risk as it gets. Toronto would then be absorbing 25.35M, meaning they'd have to move out... uh.... I got lost.
Hackett: To absorb a smaller 15 million contract, assuming the team stays out of the tax, they are limited to a difference of 5 million, so the team must send out 10 million. To absorb 26 million, the team is limited to a difference of 25% of the outgoing salary, so the team must send out 21 million. In either case, the maximum extra salary the team can absorb is about 5 million, and that's true of all salaries in between those two figures.
Grant: OK, so Toronto would need to send out 21 million. So Ross (10M), Joseph (7.3M) gets us to 17.3. If we could get that James Johnson deal done at 3/13.5M with two years unguaranteed, that would put things over the top. Of course, we'd still need to include either the 9th pick in this years draft, or 27 this year and the Clippers pick next year, or hell, even 9 and 27 this year. Say some combination of that sticks-- Toronto could then use the mid-level exception to sign a veteran back-up for Lowry, while also getting Delon Wright more minutes. Stinky as the free agent class is, there are a lot of DJ Augustin, Aaron Brooks, and Kirk Hinrich types out there who might be available for relatively cheap. As in, specifically those three guys, unless you want to go to Beno Udrih land, and I'm not emotionally prepared for that.
Hackett: Actually, there might be an easier solution there. Toronto currently holds the rights to Nando de Colo, combo guard who just won Euroleague MVP. Toronto could offer him the MLE and use him to spell Wright while he transitions into more minutes.
Grant: Hackett, you're a beautiful genius. Anyway, We're getting deep into rank speculation here. The thing is, my personal pet acquistion would be Millsap. Yours, faithful reader, might be signing and trading for Ryan Anderson, or somehow plucking Serge Ibaka from the Thunder (I'm looking at you Woodley). The exercise here wasn't meant to be completely Millsap specific. It was meant to be an example of how Toronto's assets can be manipulated in the event that DeRozan resigns. If you have a different target, plug in their salary to our above scenarios, and Bob, as they say, is your drunk, speculative uncle.
Hackett: Let's finish by answering your original question-- does it matter what deal DeRozan signs?
We can say with confidence that any trade for a big name power forward or other combination of star players will only increase the team salary by about 5 million. That leaves 1.6 million left over to fill out the roster with a minimum contract or two. Note that this limits the team in the contracts it sends out in any big trade - send out too many pieces, and to meet the roster minimum of 13 players they may need to go into the tax. If the team is willing to spend into the tax, but wants to stay below the hard cap, it's really no concern, as that additional 4 million give the team lots of wiggle room.
Considering how close that scenario ends up to the tax, every penny DeRozan gives back to the team this summer would be useful. For example, if DeRozan was going to sign a flat 26M per year deal (5 years, 130 million), they could instead structure it as a deal with maximum raises, which would bring the first year salary down to 22.6 million. That would free the team up to stay under the tax easily enough.
Grant: And provide more cushion for my dreams to come true!
Hackett: Something like that.
Grant: Look for Scenario 3 tomorrow, in which another man stays, and another man leaves.