Future Finance Watch Part I: This Season and Next

September 5th, 2015 | by Dan Clayton
(Photo by Melissa Majchrzak/NBAE via Getty Images)

(Photo by Melissa Majchrzak/NBAE via Getty Images)

Cap space doesn’t score buckets, and financial flexibility has never hoisted a Larry O’Brien Trophy. The value of keeping financial doors open is limited to the sum of what teams are able to do in leveraging that freedom. But for a team trying to build towards something special, the Utah Jazz have definitely given themselves chances to get interesting fast.

Their salary situation for the next three seasons affords them about a gajillion different roads to generating talent or parlaying assets for future use. They’re set up smartly, poised with the tools to respond to a plethora of if-then scenarios with their very fluid cap contingencies.

In this two-part look at the Jazz’s books and options, we’ll delve into the many different ways they could respond to market situations and growth on their own roster, as well as some medium-term curveballs.

2015-16

Utah's current cap sheet for 2015-16. (Source: Basketball Insiders)

Utah’s current cap sheet for 2015-16, with at leave five waivers coming. (Source: Basketball Insiders)

The Jazz could actually still get to $9.9M in cap space if they waived everybody without a full guarantee. While that’s extremely unlikely, since they like some of those non-guaranteed guys, they will certainly go into the season with some room to absorb players or make timely acquisitions.

Based on their team salary today, they have under $5M in room. But remember: they still have to cut at least five guys, and most of them are likely to be partially or fully non-guaranteed. If they do what I think they’ll do1, they’ll go into the season with nearly $7.5M in cap room, and the ability to create more through waivers or even trades.

For the same reasons, it’s not a guarantee that Utah will even hit this year’s salary floor. Based on everything counting as team salary right now, they’re over the team minimum — defined as 90% of the cap or $63M — by about $2.2M. But once they start waiving players in October, they’ll probably drop down to somewhere between $500K and $1.5M2 below the minimum, which could end up as a bonus to their players next summer.

It will probably end up being moot. There are easy ways to spend a half million bucks, and chances are fairly good that they’ll use this year’s cap room to start flipping assets and addressing a boatload of unspent money on next year’s exploding cap. But the fact that we’re talking about Utah projecting under the salary minimum underscores the point: there’s money to spend.

So what could they do with it?

Most likely they’ll sit back for now and watch for opportunities to materialize. The free agent market is beyond picked over, and most of the players they could purportedly acquire via trade come with injuries or question marks. But I expect them to be watching the way certain potential targets come out of the gate.

Importantly, it’s also about watching their own roster to see where the real needs are. It would be inaccurate to say they have rotation-quality depth at every position because we just don’t know that at this point. But they legitimately have 2-3 interesting guys at each position, so before they settle for an available name that may be an upgrade, I think they’ll see what they have. For example, a guy like Mario Chalmers does little to excite me if I’m imagining best-case improvements from Trey Burke and Bryce Cotton and a stellar rookie season from Raul Neto. But if two of those three really struggle early, suddenly a name like that is more tempting.

Same is true of guys who might not be on Utah’s radar today based on injuries, but might be if they look healthy as the season gets underway. Fans keep tossing around names like Jrue Holiday and Jose Calderon3, but the reality is that the Jazz aren’t going to make sacrifices to get a guy who’s coming off major health issues. What they could do is keep an eye on League Pass to see how certain guys fare early in the season and then make a decision4.

Point is, they’re in a position to react to possibilities that may open up, and only two other teams can say the same thing[/ref]Portland and Philly also have cap space left.[/ref]. They also hold all their own future picks as well as two extra first round picks5 and six extra second rounders in the next three drafts.

2016-17

An early look at 2016-17 salary, with another h/t to BI.

An early look at 2016-17 salary, with another h/t to BI.

For reasons Andy Larsen has covered both on SCH Radio and on his new KSL Court Report podcast6, next year is interesting. Utah will have a lot of money to spend, a dearth of FA targets and a pretty full roster.

Seven guaranteed contracts and four likely rookie team options add up to $56.6M, or less than two thirds of the projected salary cap. If Elijah Millsap continues to defend anywhere near his current level, he’s likely a lock at his minimum salary. Even Jeff Withey, on a non-guaranteed minimum deal, is a good bet unless Tibor Pleiss absolutely renders him superfluous; even if he’s a third center, $1M is not a bad price for insurance and shot-blocking depth at that position.

So that’s 13 guys, and the Jazz still have $31.3M to spend on just two roster spots — and are required to spend an extra $22.3M one way or another. No players have extensions kicking in, and Trevor Booker is the only rotation player entering free agency.

What do they do with $22 to 31 million? There are only a handful of true max-level free agents, and most of them are probably outside of Utah’s reach, especially since 27 teams will also be in a position to chase them. And with so many teams enjoying financial freedom, there won’t be a huge market for cap dumps unless somebody with one max slot wants to do some further maneuvering to line things up for a superteam7.

The moral of the story here is that there aren’t going to be a lot of ways to spend $30 million next summer, which may increase the chances that the Jazz try to spend that money sometime between now and February by acquiring somebody who fits the roster and is attached to a longer salary commitment.

(Just for fun, if they instead decided to simply roll with the 13 guys we named and then spend, say, $5M on the last two spots, there would be huge bonuses to go around thanks to the team minimum shortfall. Hayward would grab an extra $4.4M, Derrick Favors and Alec Burks both right around $3M, and so forth. Basically a 25% kicker for everybody, assuming the pro rata distribution of the salary floor shortage. It’s probably not likely given what an inefficient use of the money that would be, but you have to think the players have considered that possibility of pocketing some extra bread.)

2017-18

If the number of variables at play above makes your head spin, wait until we talk about 2017-18. A crazy amount of ambiguity clouds the vision of what Utah’s cap sheet will look like just two summers into the future. That’s what we’ll cover in part two of this series8.

Have questions about the cap or what the Jazz can and can’t do? Feel free to fire them at Dan in the comment field below, and he’ll check back and offer answers.

 

Dan Clayton

Dan Clayton

Dan covered Utah Jazz basketball for more than 10 years, including as a radio analyst for the team’s Spanish-language broadcasts from 2010 to 2014. He now lives and works in New York City, but contributes regularly to Salt City Hoops and BBALLBreakdown.
Dan Clayton

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7 Comments

  1. LKA says:

    Years ago the Jazz finished filling the roster with somewhat scrubs. Getting rid of five will be hard. Jerrett and Cooley would be the easy choice.Graham and O’Brien would be next. The last one would be the most difficult choice.

    • Dan Clayton says:

      It sounds as though Graham and O’Brien were brought in with the expectation that they’d wind up in Idaho. Agree that Jerrett and Cooley likely have uphill battles since they have six bigs in front of them (Fav/Rudy/Booker/Lyles/Pleiss/Withey).

      I think it comes down to one of Cotton/Johnson staying… unless Lindsey has other things up his sleeve.

  2. DanielT says:

    Good article. Jazz front office has done an incredible job building what they have. Several interesting names where they can spend the money next year. Ryan Anderson and Nicolas Batum are unrestricted. Harrison Barnes and Donatas Motiejunas are restricted but fit well too. But you have to think Mike Conley has to be the dream.

    • Dan Clayton says:

      Thanks, Daniel. Yeah, I’m not not entirely sure who the targets are. But they’re set up to have an interesting couple of seasons as far as roster tools go.

  3. Spencer says:

    Dan,

    Could the Jazz renegotiate contracts of these players you are saying are due for a raise? In other words, if they don’t have someone to sign, could they go to Favors and Hayward and say “let’s extend your contract out to the max years and max you out now then in return you take a slightly declining salary that gets us financial flexibility two years further down the road.”

    Basically they would get the same amount of money and the Jazz could push their flexibility into the future while making these players feel extra appreciated and part of the big picture.

    • Dan Clayton says:

      They can, within certain parameters. I actually cover that in Part II of this article, out today. They can renegotiate up three years after a contract or extension was signed. Doesn’t help with Gordon unless he opts in (which he likely won’t). Fav could be renegotiated+extended as early as 10/19/16 (assuming he signed his extension on the day it was reported), though there’s little advantage for the Jazz to do it before the summer of 2017. Burks can be renegotiated+extended on Halloween 2017.

  4. Pingback: Future Finance Watch Part II: 2017-18 | Salt City Hoops

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