Updated: Since the Jazz kept their #12 pick and don’t sound like they’ll be shopping Trey Lyles, the following pre-draft article has been updated. Now, the maximum the Jazz could clear just by waiving non-guaranteed players and renouncing free agent rights is around $16,627,611. Read on for more adjustments to the article, which originally appeared on Wednesday.
Exactly how much cap room do the Jazz have for a draft-day splash or a July pitch to some free agent stud? Well, it depends.
The answer is actually pretty conditional, but here’s a quick guide to how different decisions will impact Utah’s spending ability.
Technically speaking, the Jazz actually don’t have cap room for deals made up until 6/30. June trades are done on the current year’s cap, and Utah ended up using just about all of its ’14-15 space. They can make deals, but they would have to fall into trade guidelines for over-cap teams. For example, in a trade where they send out $9.8 million or less in salary, they can take back up to 150 percent of the outgoing salary plus $100,000. The rules change from there as the dollar figures go up, but you get the picture.
However, there’s an easy way around those strictures if the Jazz want to strike a hot iron before June is over.
Teams sometimes to agree to terms in June (such as on draft night), but then make the trade official after the July moratorium. This does lead to some short term awkwardness — “Aaah, whose hat do I put on?” — but it’s a way for teams to use their July 1 cap situation as a late-June asset.
So the July 1 cap situation matters much more, though even that has a “well, technically…” version and a real life version. Let’s start with “well technically…”
Officially, since the Jazz’s committed salary1, free agent amounts and other holds2 add up to more than the projected cap of $67.1 million, they could operate as an over-the-cap team. But it’s extremely unlikely that they will.
The best example of why that’s the case is Jeremy Evans. At this point, it’s safe to say that Evans’ market rate is probably lower than his cap hold of $3.4 million, so why limit your spending ability to just the midlevel and other exceptions just to preserve the right to pay Evans more than you ever would? Just renouncing Evans alone would cause the MLE and BAE holds to evaporate and open up over $9 million in space. At that point, even if you wanted to keep Jeremy, you could pay him market value out of your cap room and still hold onto more space than what MLE teams can offer3.
Evans is one example, but there are several scenarios whereby the Jazz can quickly carve out space should an opportunity arise.
To illustrate that, let’s work backwards from max cap space. The following table shows the most cap room Utah could create without trading players. But be aware — creating that much cap space requires the Jazz to jettison everything that’s not bolted down, waive everybody without a full guarantee, and give up rights to sign free agents. The reward for doing all of those things could be over $16.6 million in spending money.
At the risk of stoking a flame ignited by Spence Checketts, that’s close to Paul Millsap money 4. They might not want to sever ties with all of those athletes, but they could, and it’s at least important to recognize that as an extreme scenario. I’m sure the Jazz like a lot of those fellows, but they’re not going to pass on an opportunity to sign someone deeply impactful out of allegiance to a collection of end-of-bench players.
Still, it’s unlikely the Jazz do everything that would be required to open up that much space unless an impact signing or trade opportunity is right in front of them5. And if that impact transaction never falls in their lap, then they have options with the Evans and Elijah Millsap types.
As a quick intellectual exercise, let’s start from that max room scenario and work backwards. This will give a sense of what each guy’s rights will “cost” the Jazz in terms of July 1 spending power — even though they don’t really cost money yet6.
Importantly, you’ll notice that each guy’s cap cost is offset by the fact that keeping his contract/rights intact erases one of the four minimum cap holds we had to account for in the max space scenario. That is only true if you choose three or fewer of those options, but that has to change the way you view certain players’ “costs” as it relates to a hypothetical July shopping spree. For example, if it’s one of only four options they choose off this list, then keeping rights to match Joe Ingles’ offers doesn’t cost them $1 million of flexibility; it only costs them the difference between SmoMo’s qualifying offer and the $525,000 they’d have had to set aside anyway. Similarly, keeping a Cotton/Millsap/Cooley type ($320,000 cap impact) becomes a low-cost proposition, if those are guys they truly want to keep in the fold anyway.
And again, the Jazz don’t have to decide by June 30. They can keep everything intact and then renounce and waive as they need to. With a couple of notable exceptions:
So you pick: use that table as a bit of an a la carte menu. It’s a good exercise to see the financial impact of keeping the guys you like in play. Here are come examples:
What this doesn’t cover is the way trades play in. I’m using the term “max space” as shorthand, but the Jazz could take back even more salary if they rolled Booker or somebody like Grant Jerrett into a deal. Or if, as rumored on draft day, they include Trey Burke in a deal, that would increase their cap room by $2.66M.
Trades are also a reason to not waive anybody until you need to, because some of those non-guaranteed deals could come in handy in a conversation with another team, now or after their cap money is spent. If the Jazz make transactions that take them right up to the cap level, they can still make trades past that point using the over-cap trade rules. At that point, packaging just the four low-cost non-guaranteed deals could allow the Jazz to bring back $5.37 million without sending any guaranteed salary to the other team. So they’ll keep those options open as long as they can, unless an opportunity arises to spend major cash on an impact player.
That’s a ton of information, but the reality is we’re just scratching the surface on scenarios and such. We’ll be conducting a live chat of cap/trade/FA questions early next week before free agency begins. But in the meantime, enjoy playing GM with these tools.