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Salary Cap Update: VanVleet stays in Toronto, but Ibaka leaves

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One in, one out. How does it change the picture for the Raptors as they figure out the rest of the free agency picture this year?

NBA: Playoffs-Boston Celtics at Toronto Raptors Kim Klement-USA TODAY Sports

Let’s review where Toronto is now contractually — if not geographically — with Fred VanVleet back, and Serge Ibaka out the door. The salary cap situation is set to change again fast, but we’ll see how that all eventually looks for the Raptors.

Fred VanVleet re-signed with the Raptors for four years and $85 million. The 4th year is a player option, and as we’ve been predicting, the Raptors asked for the second year to be the lowest salary.

We’ve gone over this before, but for a refresher, a contract can vary in salary from year to year, with the change from one year to the next limited to a small percentage of the first year salary (for a Bird Rights free agent like Fred, eight percent of the first year salary). So his $21.25 million first year salary can decrease to $19.55 million in the second, important year (the year where the Raptors are hoping to have room to add a maximum salary free agent). Then it rises again to $21.25 million in the third year, and his player option fourth year will be worth $22.95 million.

Worth considering that Fred will almost certainly be declining that player option and signing a longer term deal unless something serious like an injury derails his career at that time. Which means those first three years are the real expected length of the contract, bringing his effective average salary down from $21.25 million to $20.7 million. Downright reasonable, I say.

The other news of course is that Serge Ibaka signed with the Clippers. All that means for the picture below is we don’t need to consider any potential contract for him. And that we do need to figure out something at centre for this season.

Cap Impact for Now

So, we now know Fred’s cap hit on the books this year. We can also throw in Flynn and Harris’ salaries after drafting them a few days ago; although they aren’t technically signed yet all signs point to them being on the roster in a month.

In any case, the concern this season is not the cap, but the tax, as we covered here.

The Raptors now sit about $20.6 million shy of the tax line. They need to fill two or three spots with that money, as they have 12 players on the roster and the roster size if 14 to 15 players.

That money will likely go pretty much exclusively to frontcourt players, as the Raptors very much lack centers right now.

My recommendation would be to get Marc Gasol back on a one-year deal at whatever pay is necessary (probably somewhere in the $10 million to $15 million range), then try to add a younger tryout piece to play backup minutes for somewhere between $5 million and $8 million, depending on how much Gasol costs. That could be an MLE (mid-level exception) target like Harry Giles or bringing back Chris Boucher on a one year prove me deal to see how he fares with a more consistent role.

I’ve held back about $900,000 of the MLE above because it is smart for teams to use a part of their MLE to sign their second round draft picks. Using the minimum salary exception (which allows teams to sign any player to a minimum salary with no consideration for cap room) limits a contract to two years. With the MLE a minimum signing can be three years in length, which in the case of a rookie leaves them finishing their contract a restricted free agent with full Bird Rights.

And A 2021 Review

The big question is how this impacts the Raptors’ bid for a maximum salary free agent next summer. Well, they planned it quite nicely.

As noted above, Fred’s deal conveniently dips to $19.55 million in summer 2021, a detail that should tell you that the Raptors’ front office is indeed very much targeting a free agent that summer. A free agent who shall remain nameless, because those poor Bucks fans shouldn’t have to suffer any more than what their own bungling front office is putting them through.

Well, that $19.55 million just fits, with a little wiggle room on the side.

With that deal in place, and assuming a first round pick next year around 20th overall, the Raptors are lined up to have $34.4 million in cap room to sign free agents. The maximum salary for a prime career player is projected at $33.7 million. Nicely done.

The plan is still in place, the signing is good. Now just ensure any additional signings to deal with the center position are for one year only (or unguaranteed in any future years) and the outlook is good.

Quick Note

One additional unknown hanging over the Raptors right now is Terence Davis. We don’t know if maybe the team trades or waives him. His salary is non-guaranteed, so he would just be removed from the books either way.

If that does happen, it opens up an additional $1.6 million in room under the tax this year, but increases the number of players we need to add.

And the numbers above for 2021 assume his $2 million cap hold is on the books, so if that goes away, and gets replaced with an empty roster spot charge, then the Raptors clear another $1.1 million of wiggle room under the cap.

Backup Plan

And here is just a quick reminder of the likely backup plan going into summer 2021. The Raptors are currently lined up to be able to land a superstar in free agency. If they succeed, great, but it will mean waiving their rights to players like Kyle Lowry, Norman Powell, and any one-year contracts they sign this offseason. But if you can land that big fish, such is the price you pay.

But if the Raptors strike out, and not only does the biggest superstar that summer go elsewhere, but other targets fall through as well, they actually have a fairly solid backup plan. They can just re-sign those guys they were going to have to let walk. Kyle Lowry gets to ride off into the sunset with a deal with term to stay. Norman Powell can get a raise here. And any young (or veteran) big signed this summer can likely be kept as well if they aren’t worth significantly more than the MLE.

Something to keep in mind as the rest of the offseason plays out, and when considering the potential cost of signing that big name free agent. The backup plan goes hand in hand with that cost, and it never hurts to have a backup plan.