FanPost

Fitting Dwight Under the Cap

Intro

With all this Dwight Howard to Dallas talk resuming, I thought it might be a good time to go through the details by which that could be possible and what the team could look like afterwards. I’m going to get a little CBA-y in this one so break out your spreadsheets.

While there are a few ways Dwight could end up with the Mavs (trade, sign and trade, and free agent signing), free agency is far and away the most likely route. So with that in mind, we’ll just skip to the good stuff and jump past all of the hoopla around Howard getting traded. I want to note a few things for all the naysayers before we getting into the mechanics: 1) the Nets can’t make a Howard deal including Brook Lopez’s ridiculous contract until January 15th at the earliest and the Magic may not want to go through another several months of Dwightmare; 2) the Lakers may be about to put themselves in the same position by signing Bynum to an extension; 3) under the new CBA, teams that are over the luxury tax line can no longer acquire players in sign and trades meaning if Howard makes it to free agency next summer then Brooklyn and LA can’t acquire him; and 4) Howard has stated he has no interest in any of the teams like Houston who might be willing to gamble on him resigning post-trade. So while it is far from a certainty that Dwight makes it to free agency and even then to Dallas, there are a number of things working in Dallas’s favor (including the fact that Dallas has been on Dwight’s "list" since the beginning for what that’s worth).

Note: Throughout this I am going to refer to a number of salary and cap scenarios which are at the bottom of the post. Please have a quick look at those to familiarize yourself before reading. I wasn't able to copy in color codes for the different contract situations so all of the amounts that are cap holds, involve options, etc are bold and italic. Here is the short summary of the ones for 2013 to make sure it's clear - Cap Holds: Kaman, Dahntay Jones, Brand, Wright, and West; Early Termination Option/ Player Option: Marion and Mayo; Team Option: DoJo; and Non-Guaranteed: James.

2013 Free Agency

Congratulations, Dwight wants to sign with Dallas as a free agent – hooray. Now we need to sort out what cap holds we have, whose rights we own, what players need to be let go or traded, etc. Take a look at the table at the end of the article to see what salaries are on the books for this year and next year.

A couple of things to note before we get into the different free agency scenarios for next year:

  1. West did the Mavs a huge favor by taking much less than the full Room Exception. He is obviously deserving of it given his play last year and his willingness to wait around for the Mavericks through free agency since he certainly received offers from other suitors. The reason that his contract this year is so great is that it drastically reduces the cap hold for him next year which should allow the Mavs to go after some big free agents without being forced to renounce his rights.
  2. Due to the recent rulings on Bird Rights for Novak and Lin, the Mavs will own Bird Rights on Elton Brand. While we definitely will not be able to retain his rights if we are able to wrangle in someone like Howard, Brand could work again as a consolidation prize if we swing and miss on a big free agent next summer and we could possibly work out a sign and trade to get assets for him if the acquiring team was offering a one year deal but wanted his Bird Rights.
  3. On our restricted free agents, for these purposes I’m going to think of the qualifying offers as cap holds even though their actual cap holds are much higher ($5.57 mil for Roddy and $5.51 mil for Collison). The Mavericks have Bird Rights on both of these players so we could go over the cap to sign them but with such large cap holds compared to the qualifying offers, it would make a lot more sense to offer them the one year deal then let them cash in the following year once Dallas is over the cap.
  4. And lastly we are going to be eligible for a number of different exceptions depending on our cap status and offseason activities. If we utilize cap space to sign a free agent, then we become eligible for the Room Exception as we did this year. If we go over the cap by signing our own free agents to which we own Bird Rights without exceeding the luxury tax line, then we become eligible for the Mid-Level Exception as well as the Bi-Annual Exception. However, the Room Exception cannot be used at the same time as the other two exceptions. This combined with the ability to get his Bird Rights is why Delonte just signed a one year deal. Since we signed Delonte using the Room Exception, we would not have been able to use either of the other exceptions noted if Delonte’s contract was for more than a year.

    Okay, on to the scenarios.

    Scenario A is probably where everything is going to start: Dirk’s back, Marion chooses not to exercise his ETO since he’s not going to get paid $9 mil anywhere else, Carter’s contract remains on the books, we want to retain our young new PG and he’s willing to take a one year cut to stay, Mayo thinks Dallas is alright and opts in, Cunningham and our other rookies stick around, and finally we return West’s good deed by retaining his cap hold and do the same with Wright since he’s serviceable and cheap. This all adds up to about $50 mil leaving us very little to charm Howard.

    Marion

    Marion will be a pivotal piece in the Mavericks pursuit of Howard. Marion has done a lot for the Mavericks since we got him in exchange for Stack’s disappearing contract. By 2013 though, he’ll be 35 and getting $9 mil. A normal expiring $9 mil contract can be an attractive trade piece but only really when we’re willing to take back longer term contracts in return which the Mavs won’t be. Further complicating the issue is that Marion has an Early Termination Option on his final contract year meaning he can dictate which teams he is willing to be traded to. Teams are not allowed to trade a player after the trade deadline of a season (meaning off-season before free agency begins) with a player option or termination option that could nullify the final season of their contract. In other words, Marion would need to okay any team the Mavs want to trade him to and decline his option.

    In addition to this kink, assuming the Mavs don’t want to take any salary back in return, they can only deal Marion to teams that either have trade exceptions large enough to absorb Marion’s salary or the cap space to fit his salary. As of right now (and this could always change over the course of the season), the Nuggets are the only team with a large enough trade exception to absorb Marion’s contract. There will be a number of teams with cap space next year and it could be possible for the Mavs to take back a little salary in a Marion trade if that would facilitate the deal (although certainly not within the 125% salary matching rules for trading with a team that is over the cap). And the last two difficult bits about Marion’s contract are: 1) there is a 15% trade kicker and 2) since his contract was signed under the 2005 CBA, the Mavericks can’t waive him and use the Stretch Provision thereby spreading the remaining contract amount across three years. If the Mavs are somehow able to move him, they would have $17.2 mil to offer Howard as shown in Scenario B.

    Freeing up the cap space from Marion’s contract is absolutely vital. Even if the Mavs were able to trade away Carter and willing to renounce the rights of everybody else on the roster leaving just Cunningham, Dirk, and Marion, the Mavs would have $38 mil in contracts locked up which includes filling the other required roster spots with minimum contracts. If Howard commands somewhere between $18 - $20 mil as a starting salary and assuming the salary cap doesn’t significantly rise, the Mavs wouldn’t have hardly any remaining space to upgrade on those nine minimum contract holds as well as not having access to the Mid-Level and Bi-Annual Exceptions for going over the cap. The Mavs would retain the Room Exception though as shown in Scenario C.

    There is always the possibility that Marion is willing to exercise his option and sign for less to facilitate Howard coming here. In this scenario, Marion would probably be leaving major money on the table for the 2013 season but the Mavericks could lock him into a long term deal that would allow him to retire a Maverick. This would be the perfect scenario since trading him is rather unlikely. It would allow us to clear out more cap space, retain our best wing defender, and have a better shot at Howard. Marion is clearly getting up there in age but he remains one of the best defenders in the league and he has definitely earned the right to stick around if he wants to (especially with an ETO at his ready). If he was willing to take around $3 mil as a starting year salary as shown in Scenario D, that would allow us to retain Collison, West, Wright, and Mayo while still being able to offer Howard about $15 mil starting salary. With year to year increases, Marion could earn $14 mil in four years which could be worth his while to exercise his option and resign. I know four years for a 35 year old whose main value is based on his hustle and athleticism isn’t the best idea but gaining the extra cap space is huge given the unlikeliness of a trade.

    Carter

    More movement could happen even if Marion is willing to bite the bullet and exercise his option as Howard would want more than $15 mil to start. Carter will be 36 next year, and while he could still be worth his $3 mil contract in terms of production, cap space will be very precious and there will be more attractive, younger free agent options available. Trading a one year deal of Carter’s size shouldn’t be that difficult even though it comes with a 10% trade kicker. If the Mavs ship out Carter for no returning money (Scenario E), they could add all the savings towards Howard giving him a starting salary around $17.4. Then they could sign West and Wright to salaries to put the Mavericks over the cap thereby allowing them to use the Mid-Level Exception and Bi-Annual Exception. There are a number of possible free agent SGs and SFs in 2013 that could replace Carter using one of the exceptions: Ronnie Brewer, Corey Brewer, Anthony Morrow, JJ Redick, Martell Webster, Mike Dunleavy, Kyle Korver, Trevor Ariza, Dorrell Wright, Ryan Gomes, or Roddy Beaubois to name a few. And if Crowder comes along quickly, the Mavericks could opt to use those exceptions to address other needs.

    If for some reason the Mavs can’t put together a trade, as a last resort the Mavericks could waive Carter and spread his remaining salary across three years. Unlike Marion, Carter’s contract was signed under the new CBA so it is eligible for the Stretch Provision as described above. Waiving Carter would reduce our cap space by $1 mil a season which would have to come out of Dwight’s salary. This is certainly not optimal but it would gain Dwight a little extra in starting salary over keeping Carter on board. Dwight could prove that he isn’t all about the money though and Carter wouldn’t need to be moved. In which case, the Mavericks could choose to hold onto Carter for his final year then decide whether to bring back a then 37 year old Carter or simply play the players they acquired using the exceptions since they should not have cap space to sign any more free agents.

    Rather than gamble on Dwight’s kindness, it is smarter to trade Carter after or during this season to free up that extra salary then use the exceptions to fill any gaps. This would give us the whole roster locked up in 2013 as shown in Scenario F. It’s also entirely possible that we’d need to let go of Wright in order to free up another $8K to pay Howard then fill Wright’s void through the exceptions as well. While Wright isn’t the flashy backup, he is more than capable and his cap hold makes him pretty attractive to retain given how thin the Mavericks will be at PF and C by 2013. Here are a handful of options though that could be had in 2013 through either of the exceptions: Tiago Splitter, Samuel Dalembert, Timofey Mozgov, and DeJuan Blair. Either way if Dwight is willing to come here, we’ll be pleased. So let’s a look at the new team with Dwight signed up.

    2014 Free Agency

    Scenarios F and G assume a number of things:1) West get around $3 mil starting salary for his loyalty and patience but in fact the Mavericks could pay him whatever since they’ll own his Bird Rights; 2) Wright gets around the Bi-Annual Exception amount for simplicity’s sake but he is in the same situation as West if Dwight is willing to take $17.4; 3) Collison is willing to take his base qualifying offer in 2013 to allow the Mavs to sign free agents then he receives a contract about the size of the full Mid-Level Exception in 2014 which again like West and Wright could be for more; 4) Mayo is retained at $8 mil which once again could be for more since the Mavs will have his Bird Rights; 5) Crowder’s team option is picked up and James is signed for a third year at the same salary as Crowder; 6) Dirk takes a cut down to $15 mil starting year salary which like everyone else mentioned above could be for more without hurting anything; 7) Dwight signs up for a $17.4 mil starting salary in 2013; 8) the salary cap doesn’t change significantly; and finally 9) everyone gets the maximum year to year raises possible for their given contracts.

    Besides listing off some of the other possible free agents as I did a couple times above, I’m not going to get into further hypotheticals based around how the Mavericks could use their exceptions – there are already enough ifs in this article without trying to declare rotations for 2013 and 2014. I will say though that if this all plays out anywhere close to F and G, the Mavericks should be a very formidable team for quite a while.

    The luxury tax level for 2012-2013 is $70.3 mil so it is even conceivable that the Mavericks could get to Scenario F and G and still remain below the tax levels for one or both years depending on how they fill out the remaining spots on the roster. Marion’s contract and what the Mavericks are able to do with it is the key piece to all of this. If Marion isn’t willing to exercise his option to sign a cheaper long term deal and the Mavericks can’t find a trade partner for him that he’ll accept, none of this is possible. Yes, the Mavericks will still have cap space in 2013 if Marion’s deal stays at $9 mil and yes, there are other potential free agent targets that could come but there is a big difference between filling out a team using $8 - $11 mil in space (assuming Carter gets dealt) and adding a star player like Howard.

    Conclusion

    So that folks don’t get all doom and gloom looking at all the dominoes that have to fall right to get Howard in a Mavericks uniform, here are some of the other available restricted and unrestricted free agents in 2013 that the Mavs might have a shot at using the same salary mechanisms: Andre Iguodala (ETO), Tyreke Evans, James Harden, Monta Ellis, Josh Smith, Chris Paul, Ty Lawson, Serge Ibaka, Paul Millsap, David West, Al Jefferson, Andrew Bynum, Nikola Pekovic, and plenty of others. None of those, in my opinion, would have quite the same impact as Howard (with Paul and Bynum being the next tier down) but there are plenty of quality players that the Mavs could use their cap space on. Regardless of what happens with Marion, the Mavericks should be in a position to add at least one impact player in 2013. Then depending on a number of things like Dirk’s resigning amount, the Mavs might even have cap space in 2014 where players like Kobe Bryant, Danny Granger, Luol Deng, Paul Pierce, Pau Gasol, Andrew Bogut, and Marcin Gortat could be available.

    Overall, the Mavericks are in a pretty good place right now and if things go their way, we could all be wondering "Deron who?" in a year. I know there is a large string of ifs to get us to that point but it is pretty exciting to see what might be possible.

    Baseline A B C D E
    Player 2012 2013
    Nowitzki $20,907,128 $22,721,381 $22,721,381 $22,721,381 $22,721,381 $22,721,381 $22,721,381
    Marion $8,396,364 $9,066,796 $9,066,796 $9,066,796 $3,000,000 $3,000,000
    Kaman $8,000,000 $9,600,000
    Carter $3,090,000 $3,180,000 $3,180,000 $3,180,000 $3,180,000
    Jones $2,900,000 $5,510,000
    Collison $2,319,344 $3,342,175 $3,342,175 $3,342,175 $3,342,175 $3,342,175
    Beaubois $2,227,333 $3,271,952
    Brand $2,100,500 $19,136,250
    Mayo $4,020,000 $4,200,900 $4,200,900 $4,200,900 $4,200,900 $4,200,900
    Cunningham $1,156,320 $1,208,400 $1,208,400 $1,208,400 $1,208,400 $1,208,400 $1,208,400
    Jones $1,276,560 $2,299,085
    Wright $992,680 $1,290,484 $1,290,484 $1,290,484 $1,290,484 $1,290,484
    West $854,389 $2,292,674 $2,292,674 $2,292,674 $2,292,674 $2,292,674
    Crowder $473,604 $788,872 $788,872 $788,872 $788,872 $788,872 $788,872
    James $473,604 $788,872 $788,872 $788,872 $788,872 $788,872 $788,872
    Minimum Holds $980,360 $1,470,540 $3,431,260 $980,360 $1,470,540
    Total Committed $59,187,826 $27,109,781 $49,860,914 $41,284,298 $38,005,581 $43,794,118 $41,104,298
    Cap $58,044,000
    Room Exception $2,575,000 $2,652,000
    Bi-Annual Exception $2,016,000 $2,016,000 $2,016,000 $2,016,000 $2,016,000
    Mid-Level Exception $5,150,000 $5,150,000 $5,150,000 $5,150,000 $5,150,000
    Cap Space -$1,143,826 $30,934,219 $8,183,086 $16,759,702 $20,038,419 $14,249,882 $16,939,702

    F G
    Player 2013 2014
    Howard $17,429,882 $19,260,020
    Nowitzki $22,721,381 $15,000,000
    Marion $3,000,000 $3,315,000
    Collison $3,342,175 $5,305,000
    Mayo $4,200,900 $8,000,000
    Cunningham $1,208,400 $1,329,720
    Wright $2,077,000 $2,077,000
    West $3,000,000 $3,315,000
    Crowder $788,872 $915,243
    James $788,872 $915,243
    Minimum Holds $980,360 $1,014,672
    Total Committed $59,537,842 $60,446,898
    Cap $58,044,000 $58,044,000
    Bi-Annual Exception $2,077,000 $2,077,000
    Mid-Level Exception $5,305,000 $5,305,000
    Total Salaries Inc Exc $66,919,842 $67,828,898
    Luxury Tax Level $70,307,000 $70,307,000

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