Considering the Raptors’ Salary Cap Future, and Trades in the Present

About a month ago we looked at the Raptors’ salary situation for this coming summer. It was right after the new CBA was signed, so we had only rumours to go on. With the full text of the CBA now available, a few of those worst case assumptions can be set aside for more realistic projections. Let’s take a look.

The main assumption that we made that looks a little better is rookie scale salaries for players already under contract. The players’ salaries will indeed be increasing as expected, but the increased salary will not count towards the cap. The only exception is for players who have salaries below the new minimum salaries — their cap hits will be amended up to the minimum. The only players on the Raptors affected by this are Pascal Siakam, Norman Powell and Fred Van Vleet.

Assuming no trades are made this season, here is the salary cap situation for next summer. This assumes Lowry will opt out of his contract, which he certainly will.

DeMar DeRozan $27,739,975
Jonas Valanciunas $15,460,675
DeMarre Carroll $14,800,000
Terrence Ross $10,500,000
Cory Joseph $7,630,000
Lucas Nogueira $2,947,305
Jakob Poeltl $2,825,640
Bruno Caboclo $2,451,225
Delon Wright $1,645,200
Pascal Siakam $1,312,611
Norman Powell $1,471,382
Fred VanVleet $1,312,611

Total salary: $90,096,624
Projected salary cap: $102,000,000
Projected tax threshold: $122,000,000

That leaves about $12 million in cap room, assuming none of the Raptors’ free agents are kept. Which would be silly, so let’s look at them.

These are the cap holds for the various free agents the Raptors can try to bring back, and their first round draft picks.

Kyle Lowry $18,000,000
Patrick Patterson $11,495,000
Jared Sullinger $6,753,600
Clippers' Pick 2017 (25th) $1,516,206
Raptors' Pick 2017 (26th) $1,465,974

Lowry and Patterson both have full Bird Rights with the Raptors, so can be signed above the cap for up to 5-year deals for their maximum salary. Sullinger has only non-Bird Rights, and can get a 4-year deal with a starting salary 20 percent above his current one (the value of his cap hold above, about $6.7 million). That will likely not be nearly enough, if he plays well when he returns, so we’ll leave him aside for now.

In any case, including those cap holds puts the Raptors well above the cap. Even keeping just Lowry means they have no cap space, so free agency is basically a wash next summer, barring any big salary clearing moves. It’s also why I’ve left off cap holds for ex-players like Nando de Colo and Jason Thompson.

The big question becomes, how much tax are the Raptors willing to pay? Lowry is eligible for up to a $35.7 million starting salary. And Patterson will likely see offers in at least the $12 to $15 million range, if not higher. Add about $48 million to that projected cap amount above (plus an additional $3 million for those picks) and you are looking at a total salary of $141 million. That’s a projected $19 million above the tax line, which would translate to a tax bill of an additional $41 million, leaving total team salary cost at $182 million, about $75 million more than they are paying this year. That’s... a lot. Though not quite as much as we assumed last time we did this review.

So, maybe a Terrence Ross or a Cory Joseph fall by the wayside and get moved for futures or cheaper salary and the bill goes down a bit to a more manageable level. Probably easy enough to manage, and even if they stand pat, maybe they get enough of a discount from the two free agents that the tax payments are reasonable, especially if the team has another deep playoff run this spring.

So, that’s the straightforward option. Let’s look at what they might do if they manage to pull off a deadline deal for a power forward upgrade.

Power Forward Upgrade

In terms of names floating around, there have been two power forwards that have captured Raptors fans’ imaginations over the past while: Paul Millsap and Serge Ibaka. Millsap seems pretty well off the table at this point, with Atlanta winning so many games, so we’ll focus on Ibaka. The applied logic here could be used for any pending free agent PF (the pending free agent part is why these guys tend to be available in the first place).

So, Ibaka. There have been rumours aplenty about him potentially being traded. Most of them connecting to the Raptors indicate he might be a rental, as covered nicely here by fellow Raptors HQ contributor John Gaudes. But I would argue the Raptors are very unlikely to make a trade for a rental player, and would only move assets for a piece they intend to re-sign. That ability to re-sign the player is why the Raptors, who will not have cap room, will probably pay a better price for these types of players than other teams. Others have cap space and would probably balk at giving up too much when they can just sign the player outright in the summer. For the Raptors, acquiring a player’s Bird Rights is very valuable, as it essentially allows them to be players in free agency for that one player even without cap room.

Given that, why is Ibaka considered a rental? Well, as noted above, the Raptors are already in line to pay a lot of tax. Add a player like Ibaka to the mix and the tax bill goes through the roof.

How does Toronto manage that tax bill? There’s only one possible answer: shed salary. Specifically, the Raptors construct the deal for Ibaka in such a way that the 2017-18 salary they expect to offer Ibaka is roughly the same as the 2017-18 salary sent out in the deal.

The obvious candidates with long term salary are Carroll, Ross and Joseph. Powell is seemingly ready to take over a full time wing spot, and both Wright and Van Vleet have shown promise (while Joseph has struggled). To have multiple big salaries on the books, teams need cheap contributions elsewhere, and those three trade candidates are backed by players making the minimum or a rookie scale salary.

Carroll makes $14.8 million this summer, Ross makes $10.5 million, and Joseph makes $7.4 million. Any two of them heading Orlando’s way clears at least close to $20 million in salaries. Now, depending on what you expect Ibaka to be paid, that could do it. Ibaka will have played only eight seasons this summer, so his maximum salary will be lower than Lowry’s or Millsap’s, at about $31 million. Whether he gets that max is another question. Offering five years with a starting salary near $25 million might be the best offer he gets. So shedding $20 million plus in the trade would go a long way to turning Ibaka from a rental to a key addition to the core.

What do you think? Is Ibaka a realistic option? How much would you pay to keep him, and how much are you willing to trade in terms of long term salary to make that happen?

All salary information from Basketball Insiders, and the new (and old) CBA can be found here.