Is It Possible To Have 3 Max Salary Players In 2014? Due to the myriad of team-specific salary payroll variables, I think it’s misleading to make statements such as “In the future, teams will not be able to afford 3 max salary players.” This season OKC and MEM have both conceded one of their max salary stars in anticipation of the new incremental and repeater tax rates under the new CBA. Teams such as LA, MIA, and NY will most likely have to cut payroll as well in order to avoid ludicrous tax payments. However, this is not the case for every team, and each individual team has to consider factors such as player tenures, tax histories, and future cap implications. For these reasons I think it’s very plausible for the HOUSTON ROCKETS (not some other team) to have 3 max players by the time the 2014/15 season comes along. But please correct me if I’m wrong… All Max Players Are NOT Created Equal As we all know, the magnitude of salary paid to “max players” can vary considerably due to factors such as tenure and performance as defined in the contract structure. For instance, Kobe (18yr tenure, veteran extension, super max) will make over $30 mil in 2013, whereas Eric Gordon (6yr tenure, rookie extension, 0-6 max) will only make $14.3 mil. QUITE THE DIFFERENCE! Each team is able to sign 1 player to a 5yr rookie contract extension, known as the team’s “Designated Player.” The maximum salary paid under rookie contract extensions is limited to 25% of the salary cap, unless he meets certain performance criteria (2x All-Star starter, 2x All-NBA, or MVP), in which case the maximum is 30% of the cap. Harden is our “Designated Player”, signed to a rookie extension using the 5th Year 30% Max Criteria (in anticipation of him meeting the performance criteria). During the 2014/15 season, Harden will make a reasonable $14.7 mil, for reference that is $1.75 mil more than Kevin Martin is making this season. Instead of going for a super max player with veteran tenure, such as Dwight, who will make MORE than $22 mil in 2014, we should go after a player like Kevin Love (4yr rookie extension) who will make $15.7 mil. Let’s focus on whether the math works first, and for now please ignore the chances of obtaining him. We will be paying Harden and Love a combined total of $30.4 mil. Is there room for another max player?? Let’s take a look at some other Rockets-specific factors… First Time Offenders Get Off Easier Starting in the 2014/15 season, the Repeater Tax Rate will kick in. Teams that have been over the luxury tax level in 3 out of the last 4 seasons will be subject to a Repeater tax, an additional $1.00 on top of the incremental tax rate. For example, if you are less than $5 mil over the tax level, you will have to pay $1.50 for every dollar you are over, or $2.50 if you are subject to the Repeater tax. Since the luxury tax is incremental, this can amount to over $4.25 tax per dollar over the tax level for some of the more severe tax offenders. Dan Gilbert (Cavs owner) has stated that he erroneously made the statement “Lebron will not win a ring before the Cavs,” in anticipation of the Repeater Tax. This is also why the Knicks would have had to pay like $40 mil in taxes had they matched Jeremy Lin’s contract. Teams like OKC and MEM have begun to shed salary to avoid this tax. The good news is that the Rockets will not be subject to the Repeater Tax! Which means our dollar will have more relative buying power after surpassing the tax threshold than many other contenders. In addition, beginning next season, teams over the tax level apron cannot receive players in Sign and Trades; the Rockets can. Amazing Potential @ Amazing Values As the 2012 Lakers have taught us, you can’t just frontload your roster with stars and sacrifice team depth. If players 4 through 9 suck on your team, you most likely won’t be competitive (unless you have Lebron). Likewise, if you overpay your non-star players, you will most likely struggle to surround your stars with enough talent to compete. Let’s take a look at OKC in 2014: after paying two players max salary, they still have to pay Ibaka $12.3 mil and Perkins $9.2 mil (totaling $57.1 mil for 4 players), which limits the amount of cap they can allocate to players 5 through 9. In 2014, Brooklyn has to pay JJ, Deron, and Lopez $58 mil!! Their 4th best player will be a 32 year old Wallace, making $10.1 mil (totaling $68.8 mil for 4 players). Every day I praise the scouting and player development personnel of the Rockets. Because in addition to the numerous late 1st round and 2nd round gems they have found us (Landry, Brooks, Budinger…) they have given us the ultimate diamond in the rough: CHANDLER PARSONS. Parsons is a legitimate sf starter on most teams and is a versatile, two-way player….making a paltry $964,750 in the 4th year of his rookie contract. As we all know, in the second year of his contract he is already #1 in the league in production per dollar and still improving! I’m not sure how good Parsons will be by the end of his contract, but he could possibly be underpaid by a factor of 10... This Rockets-specific advantage basically saves us $8 to 9 mil in cap since we are getting a quality starter for peanuts, which we can reallocate towards the rest of our roster…and perhaps that 3rd max player. In 2014, the Rockets will pay Parsons, Jones, Motiejunas, and Royce a whopping total of $5.9 mil….the same year the Heat will pay Mike Miller $6.6 mil, while still owing $8.4 mil to Joel Anthony and Udonis Haslem (this is, of course, after owing $61 mil to three players with super max contracts). I don’t know about the rest of you guys, but I am excited at the potential of our rookie prospects, and I consider it a safe bet that most of them can outperform their paltry 1 mil contracts and become rotation players. THE QUESTION Is it possible to clear the cap holds from Lin and Asik’s $14.9 mil expiring contracts (they only count $8.3 mil on our books) while obtaining picks and a trade exception in the process, then sign a 2nd max free agent, and then trade Patterson and Morris ($3-4mil) and a bunch of picks for a 3rd max player? We would only have to send out 75% of the incoming player’s salary, and we’d still have a trade exception to fill out the roster. OK, let’s assume that in 2014 we acquire a max player under a rookie extension like Kevin Love or Lamarcus Aldridge. We will be paying Harden, Love, Parsons, Jones, Motiejunas, and Royce (6 players, 2 max) a combined total of approx $36.3 mil. The salary cap has historically been around $58 mil, though this will probably be slightly lower in 2014. If we could move some contracts, we could very well be under the cap. For reference, if the Lakers resign Dwight, they will owe those 2 max players over $50 mil, compared to the $30 mil we would be paying Harden and Love. I’m not saying this is plausible, I’m just wondering if it’s possible. When we were contending in 2009, Les Alexander was willing to spend over $85 mil on payroll. Even if we end up paying a substantial amount of luxury tax (though not the repeater tax), could we afford a 3rd max player? Math-wise, could we sign Lebron to the super max and then trade for love, totally approx $55 mil for Harden, Love, Lebron, and Parsons? Could we fill out the remaining roster spots with veterans playing for the minimum who would jump at the chance to win a title? Would players take a pay cut to play on that team, like lebron and Duncan have done in the past? Why wouldn’t Lebron consider playing with Harden, Love, Parsons, Dmo, Jones and Royce for $37 mil rather than Wade, Bosh, Miller, Haslem and Anthony for $57 mil? Would Les pay $90 million (20mil in taxes) for the team listed above? I know the math isn’t right, with a ton of other variables I’m not taking into account like variable cap holds and such, but with the huge variance in max contracts, luxury tax payments, and overpaid rotation players, I feel like the Rockets are in a completely difference position than most other teams. Or maybe this is all moot because we can’t sign an FA and obtain bird rights to another via trade under the new CBA, I don’t know. Bima and other veteran capologists, what do you think?
Yeah, we can. Parsons' contract is really a lifesaver. But I don't think there's anything preventing us from obtaining Dwight in such a scenario. Just as a wild hypothetical and I'm going to make loads of assumptions here, say Morey clears enough cap space to sign Dwight outright (trading Patterson, White, and Morris for some mediocre picks). Morey could then flip Asik & Jones ($10 million) for Millsap and some cheap but good role players (Avery Bradley, Isiah Thomas, etc.) and leave us with a rotation of Lin/Harden/Parsons/Millsap/Dwight/(Bradley)/Motiejunas/Smith. At the trade deadline of the 2014/15 season when Kevin Love will probably be on his way out of Minnesota, Morey could then flip Millsap (let's just say he'll have around 2 years/$20 million left on his contract) along with whatever other assets Morey will surely have accumulated for Love. Love will only be making $15.7 million that year and so will only need $10.5-$12.5 million in salaries sent out in a trade. This way the Rockets wouldn't have to wait for Love for 2 years to be a contender and can seamlessly move from a Harden/Dwight/Millsap core to a Harden/Dwight/Love core, set up to compete for years. Plus, I can't really see Lebron ever coming to Houston.
It's possible, but isn't it possible then for a ton of other teams as given your premise skims over the Asik/Lin cap holds. Yes, I recognize they would be expiring and hopefully easier to move, but still, it's possible in the sense that the Rockets have to do a LOT of things to make it possible, many of which require the cooperation of other teams. I imagine many of those other teams could similarly do things to make it possible. Step 1: Acquire that 2nd max player. We can worry about max player #3 later...
