Salary Cap Shakeup: Where do the Raptors stand now?

It’s been a long week. We’ve waited since the opening hours of free agency, when Kyle Lowry announced he was heading to the MIami Heat, to find out what exactly the return would be, whether the Raptors would be keeping or re-routing some of that return, and what other free agency moves Toronto would make.

It took some time, but we now have most of those answers. Let’s do a quick summary.

Kyle Lowry Sign-and-Trade

We have to make some assumptions on the exact salary structure of Lowry’s deal (three years, $85 million), but the following should be pretty representative. The pieces in the deal are shown with their current year salary, remaining years on their contract and their free agency status at the end of it.

Toronto Trades: Kyle Lowry ($27.0M, 3 years, UFA)

Miami Trades: Goran Dragic ($19.4M, 1 year, UFA) and Precious Achiuwa ($2.7M, 3 years, RFA)

Lowry’s deal is assumed to be backloaded as much as is allowed (raises worth 5 percent of the first-year salary), which results in a contract like this:

2021-22: $27.0M
2022-23: $28.3M
2023-24: $29.7M

Dragic’s salary is fully guaranteed and an expiring contract. As he’s on the final year of a multi-year deal, he will finish the deal with full Bird Rights, even if he is traded, and does not have a no-trade clause.

Achiuwa is a former first round pick (20th) coming off his rookie season, with three years remaining on his rookie scale contract, after which he will be a restricted free agent.

The Raptors do end up with a small-ish trade exception (TPE) that can allow them to absorb a contract with a current year salary of up to $4.8 million in a trade without sending back matching salary, since they took back less salary than they sent out in this trade.

Gary Trent Jr. Signing

Gary Trent Jr. re-signed to a 3-year, $54 million deal with a third year player option. He will be an unrestricted free agent with full Bird Rights at the end of it, whether he picks up his player option or not. Backloading the deal (which is typical) would allow for a contract with this structure:

2021-22: $16.7M
2022-23: $18M
2023-24: $19.3M (player option)

This deal came together pretty quickly, and is a little pricier than expected, but the Raptors were pretty clearly emphasizing shorter term deals in this free agency to align with the timelines of their current core. Look at the contract lengths of the following:

Pascal Siakam: 3 years
Fred VanVleet: 3 years (3rd year PO)
OG Anunoby: 4 years (4th year PO)
Gary Trent Jr: 3 years (3rd year PO)

The Raptors are adding youth but otherwise trying to compete with this core. At the same time, they are setting themselves up to be able to pivot at the 2022-23 deadline or in summer 2023 to move in a different direction if need be, after a couple of seasons to evaluate how the current plan is going.

In any case, if you want to dictate contract term to the players you sign, you have to pay a price with an increased annual salary. Trent Jr.’s deal is now aligned perfectly with Fred VanVleet’s in number of years (including the option).

Many will contrast this GTJ deal to that of Norman Powell’s recent $90 million for five years signing, as the two were traded for each other. They ended up with identical annual salaries. The win for the Raptors is on the term, as mentioned, with Powell getting four guaranteed years plus a team option fifth year, which would extend beyond what they were interested in committing this off-season.

Khem Birch Signing

Khem Birch re-signed for a 3-year, $20 million deal. He will be an unrestricted free agent with full Bird Rights after it is complete. As the Raptors had limited rights to him after picking him up after he was waived last season, they needed to set aside cap space or an exception to sign him.

There was some hope he might be able to fit into the Room MLE if they cleared cap room, so they could spend cap space and then also sign Birch. That would have been only about $5 million per year for two years. I suspect once they decided they would not be pursuing cap room, they shifted to getting a third year with Birch to again get him aligned with the core. This contract will come out of the full MLE, which allows a team to sign players up to four years and up to a starting salary of $9.5 million.

Birch’s deal could be backloaded or frontloaded. Once again, until we know otherwise, we’ll assume it is backloaded.

2021-22: $6.3M
2022-23: $6.7M
2023-24: $7.0M

That leaves $3.2 million of the MLE to use elsewhere if the Raptors so desire.

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.

The Raptors have also officially waived players Rodney Hood, Aron Baynes, DeAndre’ Bembry, and Paul Watson Jr. since the last update, so they are not shown here.

Player | Salary

Pascal Siakam $33.0 M
Fred VanVleet $19.7 M
Goran Dragic $19.4 M
Gary Trent Jr. $16.7 M
OG Anunoby $16.1 M
Scottie Barnes $7.3 M
Chris Boucher $7.0 M
Khem Birch $6.3 M
Precious Achiuwa $2.7 M
Malachi Flynn $2.0 M
Yuta Watanabe $1.7 M
Freddie Gillespie $1.5 M

That all adds up to $133.4 million to 12 players, with the salary cap expected to be set at $112.4 million. So clearly no cap room to use.

They could still dump Dragic’s salary and wait to sign Trent Jr. officially, leaving only his small $1.7 million cap hold on the books, in which case they can have up to $12.4 million in cap room to add a player.

More significantly to the Raptors, I expect (as a Dragic salary dump seems unlikely), the tax threshold is set at $136.6 million this season. The total salary is calculated slightly differently for the tax calculation (minimum salaries are treated a bit differently), so their total salary for this purpose is $133.6 million. So they are only $3.0 million clear of that number and still need to add two players to meet the minimum roster size of 14 players.

The bad news is, for tax purposes, most minimum signings count as $1.67 million against the tax. This means if the Raptors sign two players at that rate and they will dip into the tax, barely. Teams don’t like to do this — you don’t pay a huge tax bill, but you also don’t get to be in that group of non-tax-paying teams that the tax payments from other teams get distributed to.

The good news is, the exception to that is second round draft picks signing their rookie deal, which count as their actual salary. So expect Dalano Banton and/or David Johnson to sign an NBA deal with the team and only count as $0.93 million against the tax. The other could also get the second two-way contract the team has to offer (they already have Justin Champagnie signed to the other).

That leftover amount of the MLE comes in handy here, as most minimum signings can only be for one or two seasons (the minimum salary exception allows teams to sign minimum salary contracts without cap room but only for two years at most). The extra bit of MLE will let the Raptors sign one (or both) to minimum salary deals with three years of term.

The benefit of that is that it takes three years to build up full Bird Rights. And a player with three or fewer years of experience will end their contract as a restricted free agent. Meaning the second rounders would hit free agency three seasons from now as restricted free agents and with the Raptors able to offer them any contract they like with those Bird Rights. These players will also conveniently have a nice small cap hold on the books if the Raptors find themselves with cap space to use before re-signing them, just like Trent Jr. this summer.

If the second rounders were to sign two-year contracts with the minimum salary exception instead, they would still be restricted free agents, but the team would not have their Bird Rights yet, just Early Bird Rights. Those limit the team to offering roughly the league average salary (or about the value of the MLE). And the extra year of minimum salary before getting a raise never hurts a cap sheet.

In any case, unless Dragic is traded elsewhere for less salary coming back, expect the Raptors to be largely done with their additions to the roster, with any other changes coming via trade.

Training Camp Invites

The Raptors have also reportedly signed or invited Sam Dekker, Ishmael Wainwright, and others to attend training camp on contracts with small guarantees. There are no reports what those guarantee numbers are, but we should set aside a couple hundred thousand dollars in room under the tax to accommodate the guarantees of any players that are cut. These contracts otherwise won’t really impact the Raptors’ cap situation until they make the roster out of training camp, so no need to be too concerned about them just yet. Just note that they would be the higher minimum salary for tax purposes we mentioned above.

That’s it for now. Hit me up with any questions in the comments and I’ll do my best to answer them all.

All salary information per Basketball Insiders or my own calculation.