Salary Cap Update: Moving on from DeMarre Carroll

With the Raptors trading DeMarre Carroll, their 2018 1st round pick (lottery protected) and the Orlando 2nd round pick from the Jeff Weltman transaction, for Justin Hamilton from the Brooklyn Nets, one of those big salary shedding moves we’ve been discussing finally happened. Let’s take a look at the trade, where the team is now, and what else might be coming.

The Trade

The Raptors traded DeMarre Carroll, who makes $14.8 million this season, and $15.4 million next season, with the aforementioned picks, to the Brooklyn Nets for Justin Hamilton, a stretch (kind of... he takes threes, but only at a roughly 30% success rate) five who has one year remaining on his contract worth $3 million. The Raptors clear $11.8 million off the books this year, and Carroll’s full salary off the books next year.

Next year it will come in handy when looking to re-sign Norman Powell, but the more immediate concern is the tax situation this season. The Raptors also get a trade exception worth that $11.8 million, with which they can absorb that much salary in a future trade.

The Impact

Here are the committed salaries after the trade.

Kyle Lowry $30,864,198
DeMar DeRozan $27,739,975
Serge Ibaka $20,061,729
Jonas Valanciunas $15,460,675
Cory Joseph $7,630,000
Justin Hamilton $3,000,000
Lucas Nogueira $2,947,305
Jakob Poeltl $2,825,640
Bruno Caboclo $2,451,225
Delon Wright $1,645,200
OG Anunoby $1,645,200
Norman Powell $1,471,382
Pascal Siakam $1,312,611
Fred VanVleet $1,312,611

Those total, along with the incentives and other tax calculation assumptions we’ve covered in the past, to $121.7 million.

There are a couple of partially guaranteed camp invite contracts on the team as well, but if waived the guarantee is very small and won’t impact the big picture here. With more moves surely coming, we’ll leave their minimum salaries to the side until we know there is a roster spot for them.

In any case, that $121.7 million puts the Raptors about $2.5 million into the tax. This is a very reasonable spot to be, but I’d expect the Raptors to either shed the final few million to get clear, or find a way to spend up a bit, by either trading a redundant piece (Cory Joseph, Lucas Nogueira or the newly acquired Hamilton) for a contributor on the wing, or to clear enough room below the apron to use the full Mid-Level Exception to target said wing player.

The Mid-Level Exception

To use the full (non-taxpayer) MLE, a team must ensure they are below the apron (the point $6 million above the tax line, so about $125.3 million this year), which becomes a hard cap if they do use the full MLE. That exception starts at $8.4 million, so to use the entire thing, the Raptors would need to clear another $5 million in salary or so. Joseph seems the obvious candidate.

Considering the current roster imbalance (with Hamilton arriving, the Raptors now have four players who almost exclusively play C, plus Ibaka and Siakam who can see time there, have four point guards, and their best SF options are Norman Powell, an injured OG Anunoby, and the legendary Bruno Caboclo), expect more moves to come. Joseph, Nogueira and Hamilton are all on expiring contracts (Joseph has a player option he’s sure to opt out of) and in redundant positions, and are the most likely candidates for another salary dump or a trade for a wing role player to buy some time until Anunoby returns from injury. The Carroll trade exception brings a lot of flexibility in terms of salary matching in any trade as well.

It should be noted that in the report from ESPN on this trade, the rumour is that the Raptors want to be active in free agency still, so expect more of a salary dump than a trade for a piece.

Something else to watch for: if Hamilton can’t be moved back out in any Joseph trade, the team may consider waiving and stretching his salary. With only one season left and such a low cap hit, it might make sense to spread it out a bit with this season being such a cap crunch.

When a player is waived, the team can choose to stretch their cap hit over multiple years instead of just carrying the dead cap hit for the duration of the contract. Stretching a waived player’s salary will spread the cap hit over twice the number of years left on their deal, plus one. So, in Hamilton’s case, the team could waive him and just let his $3 million sit on the cap for this year, or they could waive him and stretch that $3 million over three years, so only $1 million of dead money will sit on the cap over the next few seasons.

This was also an option with Carroll, but with his longer contract and higher cap hit, it would have translated to a $6 million hit for the next five seasons — a much more bitter pill to swallow.

If the Raptors do clear enough wiggle room to use the full MLE, what target do you think they should go after? I’ve got my money on CJ Miles. Or if they do leverage that trade exception, what targets make sense?

As ever, thanks to basketballinsiders.com for the source data on existing contracts.