With the NBA Draft come and gone and no major shake-ups to the roster to speak of, the next major milestone for the Raptors in a critical off-season for the franchise comes tomorrow at 6 pm, with the opening of free agency.
You may have heard that the Raptors have a couple of key free agents, including the Greatest Raptor of All Time, Kyle Lowry. Where Lowry ends up, and how he gets there, will go a long way to defining what this team looks like for the foreseeable future.
Let’s start with what we know about the Raptors right now before we dive into what we should find out shortly.
Current Raptors Roster
The following is the list of players currently under contract for next season, and their salaries (in millions). I’ve included Scottie Barnes here as even though he technically hasn’t signed, his rookie scale contract amount still counts toward the cap.
Player | Salary
Pascal Siakam $33.0 M
Fred VanVleet $19.7 M
OG Anunoby $16.1 M
Rodney Hood $10.9 M
Aron Baynes $7.4 M
Chris Boucher $7.0 M
Scottie Barnes $6.9 M
Malachi Flynn $2.0 M
DeAndre’ Bembry $2.0 M
Paul Watson $1.7 M
Yuta Watanabe $1.7 M
Freddie Gillespie $1.5 M
That all adds up to $109.8 million to 12 players, with the salary cap expected to be set at $112.4 million. This is misleading, however, as the Raptors also have free agents, who count against the cap with cap holds unless they relinquish their various rights to those players.
Kyle Lowry has his full Bird Rights and is coming off an expensive contract, so his cap hold is $39.3 million. Gary Trent Jr. has full Bird Rights and is also a restricted free agent. The Raptors made him the one-year qualifying offer, which is what gives them the right to match any other offer he gets. That offer amount is $4.7 million — which is what sets the value of his cap hold. If Trent were an unrestricted free agent and the Raptors only had his Bird Rights and not the right to match any offer, his cap hold would be only $1.7 million. This will be useful information later, I promise.
There are actually a couple of other free agents as well, with their own cap holds. Stanley Johnson ($7.2 M) and Khem Birch ($1.7 M) also have cap holds. The Raptors have Johnson’s Early Bird Rights, a lesser form of Bird Rights, and only have Birch’s Non-Bird Rights. Those non-Bird Rights offer very little ability to give the player a contract with a significant raise, so if the Raptors want to keep Birch they will likely either have to clear cap room or use a salary cap exception like the Mid-Level Exception (MLE) to do so.
The good news about all these extra cap holds (taking the Raptors total cap hit to approximately $163 million, well above the cap) is they are very easy to make disappear. Just renounce your rights to re-sign those players using their Bird, Early Bird or Non-Bird Rights, and the cap holds are gone. And this can be done instantaneously, so teams usually just hold onto those rights (and big cap hits) until the moment they use actual cap space.
These holds also don’t matter for things like the luxury tax, they are just used for calculating cap room available to offer a free agent salary under the cap.
In any case, things aren’t so bleak as all that anyway. If the Raptors were intent on using cap space, the first thing they would do is cut players like Hood and Baynes, whose contracts are fully unguaranteed. They will likely cut these players anyway unless they find a trade where their salaries would be useful. Bembry, Watanabe, Gillespie and Watson also have unguaranteed contracts, but with their salaries so low the team doesn’t gain as much cap room cutting them. One other player has an unguaranteed contract: Chris Boucher, who the Raptors likely value enough to hold onto unless they’re pursuing a really attractive option in free agency where they need his salary off the books.
So, if the Raptors cut Hood and Baynes, and let Lowry walk (removing his giant cap hold), and relinquish all their rights to Birch (they are useless anyway), Johnson (of course) and Trent Jr. (this is the tricky one), they bring that committed salary down to $91.6 million to 10 players. You have to have 12 spots accounted for when calculating cap room, so add two cap holds at the rookie minimum salary ($0.9 million each) and that means $93.5 million, or $18.9 million in cap room.
The Raptors very likely want to keep Trent, and since he has a low cap hold, they can sign a free agent with cap space first and then sign him to some bigger contract, taking them over the cap. But to do this they need to keep his Bird Rights at least, and they’ll want to keep him a restricted free agent, meaning the cap hold associated with him would be $4.7 million. Adding him to the list means one less empty roster spot to make up the 12, so it only costs you $3.8 million, taking your cap room down to $15.1 million.
There are a few ways the Raptors can increase that cap room. The first is pretty straightforward — how attached is the team to the significant list of minimum salary players on the roster? Bembry, Watanabe, Gillespie, and Watson are all minimum salary players, but the minimum salary for a player is different depending on how much experience they have. These guys range from $1.5 to $2.0 million, and they are all unguaranteed (so their salary will be removed from the team salary if they are cut).
That’s not very much, but an empty roster spot costs only $0.9 million. So you can increase your cap room by little bits by cutting these players. You can even sign them again after you use your cap room, so long as they want to re-sign for the minimum or for an exception you have. But of course, they are also free agents at that point and can decide to sign with another team instead. There is also a chance another team claims their contract on waivers (which players have to clear before being cut).
Let’s say the Raptors cut all four players, assuming they could bring them back on a minimum deal if they so desired. That would bring their salary commitment to $94.1 million, meaning $18.3 million in cap room, even with Trent Jr’s rights.
The more extreme option along those lines, if the Raptors have identified a particularly expensive free agent to pursue, is to cut (or trade) Chris Boucher. That would remove his $7 mil salary (which is also unguaranteed) and replace it with a roster spot cap hold, taking that $18.3 million in cap room and making it $24.4 — a sizable jump. Obviously the team would not want to do this, Boucher was a valuable contributor last season, but if push came to shove, his contract gives them some additional big-time flexibility.
There’s also one final trick the Raptors could use to clear cap room (besides making larger trades), something suggested by Blake Murphy of the Athletic. Trent Jr. has that $4.7 mil cap hold sitting on the books because his qualifying offer is the same. If he were not a restricted free agent, say if the Raptors were to withdraw that qualifying offer and lose their ability to match any contract he signs elsewhere, his cap hold would be only $1.7 million. That’s $3 M in free cap space — though of course, it is not actually free, it comes with risk.
The good news is, if the Raptors come to an agreement with Trent Jr. on a new contract and are ready to sign it, and have come to an agreement on a contract with a free agent who is ready to sign, and Trent Jr. and the Raptors are happy with their arrangement, they can time their transactions as follows, in immediate succession:
- Withdraw Trent Jr.’s qualifying offer, making him an unrestricted free agent;
- Use their cap room (increased by $3 million as of the previous step) to sign the new free agent;
- Use Trent Jr.’s Bird Rights to sign him to his agreed-upon deal.
The risk lies in the fact that nothing is really set in stone until the player signs the contract. There is a chance that Trent Jr. decides between steps 1 and 3 that he wants to sign somewhere else instead, and there’s nothing the Raptors can do to stop him. It’s a risk, but with good communication between the front office and Trent Jr.’s agent, it can probably be pulled off.
That extra $3 million in cap space would take the Raptors maximum cap room to between $21.3 million (keeping Boucher) and $27.4 million (cutting Boucher).
So, let’s circle back, because all that cap room stuff above was just to lay the groundwork, as using cap room is likely Plan C for the Raptors this summer.
Toronto likely wants to keep Trent Jr. regardless, and if they operate over the cap and don’t use cap room, that becomes easy, they just match the best offer on the market. They’ll also need to figure out how exactly (or if) they will re-sign Khem Birch.
But the real question is what happens with Kyle Lowry. He’s the key for the coming season, and possibly era, of Raptors basketball.
Re-sign Kyle Lowry. Yes, the Raptors core is growing into their own and maybe it’s time for Lowry to look elsewhere. Yes, the core is now signed to expensive contacts and signing an aging Lowry to a long-term deal will restrict their ability to make other additions or upgrades to the roster.
But Lowry is still very likely the best win-now player available in free agency, and the Raptors will put in an offer.
The question is, what kind of offer? I had speculated the market would be a $25 million per year deal over two years or a $20 million per year deal over three years. Early in the off-season, that first number was rumoured to be the desired price tag. But as Chris Paul’s team made a run to the Finals, Lowry’s demands have reportedly gone up. It’s very easy to sell the value of a veteran point guard right now. The latest rumours are in the range of $30 million a year for three years.
This might be a bit rich for the Raptors. They surely love Lowry, but this team is still in transition, and they will very likely have no interest in paying tax until they can prove they have pulled out of the nosedive that was this past season (and there is every reason to expect they’ll be very good with all the context of last season in the rearview) and can expect to make deep playoff runs on a yearly basis.
The tax line, the point above which teams start essentially paying fines for how high their team salary is, is likely to be set near $136.6 million this season. Assuming the Raptors cut Hood and Barnes, they currently have a team salary of $93.1 million (leaving three slots for Trent and Lowry and Birch to re-sign). These numbers are slightly different from the cap room section above as empty roster spots and minimum salaries are treated slightly differently for tax purposes. That leaves the team $43.5 million to spend on the three players combined.
Birch, we have noted, has no real useful rights to re-sign him with. So the Raptors will need to set aside cap space (they’ll have none in this scenario) or an exception to sign him. In this case, since they are staying under the tax, they have the full Mid Level Exception (MLE) which they can use to sign a player (or players) up to a 4-year contract starting at a total of $9.5 million. I expect Birch would come in a little under that number ($5-7 mil or so), but not so low that the minimum salary would be sufficient to keep him.
If Lowry takes $30 million or so, it starts to look difficult to re-sign both Trent Jr. and Birch with the $13-15 million the Raptors would have left. If Lowry takes $25 million, then $18-20 mil of wiggle room is likely about right for those two other returning free agents, as Trent Jr. should likely come in near $15 million, give or take.
So, we can expect Toronto to make an offer in the range of $25 million to Lowry, again, the greatest Raptor of all time, but the latest rumours suggest that won’t be enough.
Which means Plan B.
Which we’ll explore tomorrow.