NBA Roundtable

2010 Cap Space: New York

In Free Agency, General NBA, Trade Talk on November 25, 2009 at 7:00 am

There is an updated version to this post available here following the trades of Jared Jeffries + Jordan Hill.

New York Knicks Salaries

Contracts above $5 million

  • Eddy Curry – $11.28 million
  • Jared Jeffries – $6.88 million

Both hold player options for the 2010/11 season and are locks to pick up those options. They will be entering the final year of their contracts.

They total $18.16 million.

Rest Of Team’s Salaries

  • Danilo Gallinari – $3.3 million
  • Jordan Hill – $2.67 million
  • Wilson Chandler – $2.13 million
  • Toney Douglas – $1.07 million

All four players are on their rookie contracts. Chandler will be in the final year of his rookie deal, Gallinari will be in his third year, whilst Douglas and Hill be beginning their second seasons.

Those contracts amount to $9.17 million and bring the Knicks total up to $27.33 million.

Other Costs

  • Draft Picks — The Knicks do not own their 2010 first round draft pick. That’s heading to Utah as part of the Stephon Marbury trade (via Phoenix). Second round picks do not count as guaranteed salary until contracts are signed so no charge there.
  • Open Roster Spots — The Knicks have only six players on the books at this point. That means they’ll be charged for six open roster spots which will cost around $2.85 million more.

That gives us a new total of $30.18 million.

The Cap

The league sent out a memo at the beginning of free agency this year citing these numbers as possible cap figures for 2010

The NBA’s ballyhooed free-agent summer of 2010 might have quietly taken another hit late Tuesday night.

In a memo announcing next season’s salary cap and luxury-tax threshold, sent out shortly before the league’s annual July moratorium on signings and trades was lifted at 12:01 a.m. Wednesday, NBA teams also received tentative projections from the league warning that the cap is estimated to drop to somewhere between $50.4 million and $53.6 million for the 2010-11 season.

2010 Cap Space

That Knicks have $30.2 million in salaries which means they’ll have around $20.2-t0-$23.4 million in cap space in 2010.

Knicks Free Agency Options

The Knicks only have enough cap space to offer one maximum contract this summer. A max contract to a player like LeBron James would cost $16.57 million as a starting salary for the first year.

That would leave another $3.6-to-$6.8 million in leftover funds, enough for a role player.

It will be extremely difficult for the Knicks to convince a player of LeBron’s caliber to join their team when all they’re offering as a supporting cast is Gallinari and Wilson Chandler. In order to successfully acquire an elite player the Knicks will need to be able to show a capacity to contend for a title in the near future. The best way to do this is to be able to sign two maximum contracts.

Consequently, the Knicks sole focus for the remainder of this season should be cutting their remaining salaries and creating at least another $13 million in cap space.

Knicks Options

The Knicks have the following options open to them

  • Try to couple David Lee with Jared Jeffries or Eddy Curry for an expiring contract. Their likely targets would be a contending team that could use David Lee as a difference maker come playoff time.
  • Try to trade some combination of their youngsters — Gallinari, Chandler, Hill — along with Jeffries and/or Curry in a salary dump.
  • Try to trade future first round draft picks in combination with Curry or Jeffries in a salary dump.

Notes

  • Gallinari is the Knicks most prized asset. They should try extremely hard to hold onto him. Letting him go is only a move they should make as a last resort.
  • As talented a prospect as Gallinari is … he isn’t established enough to convince an elite free agent to come and join him. If he’s all that stands between the Knicks and signing two of James/Wade/Bosh/Amare then he should be sacrificed. It won’t be a guarantee that they get their man in free agency but holding onto Gallinari, without creating additional cap space, will in all likelihood be a guarantee that they do not acquire James or Wade.
  • The Knicks could also try to trade their young prospects + Curry/Jeffries for an established All-Star. If the player is good enough and young enough this could end up being just as good, perhaps better (guaranteed talent), then having enough cap space for two maximum contracts.
  • The Knicks could also try to sign a younger player to a maximum contract. Take a chance on a player who’s coming off his rookie contract. That contract would only have a starting salary of $12.6-to-$13.4 million. Meaning that the Knicks would only have to create an additional $7-to-$10 million in cap space instead of $13 million.
    • Under this scenario, the best available talent would be … funnily enough … David Lee.
    • The high risk target would be a prospect like Rudy Gay.
  • These decisions should really have been made near the start of the 2008/09 season. It was a mistake by Donnie Walsh not to sacrifice Lee/Nate/2009 lottery pick last season in order to create additional cap space. As a result he’s cornered himself in and made his own life more difficult.
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  1. There are cap holds for all of their free agents as well.

    Like Toronto did, they have to cut lose their claims to Lee, Nate and co to be able to use that cap space.

    Also I believe there are restrictions to trading players on 1 year deals like Lee and Nate. Consent and loss of bird-rights required.
    Plus both are base year players – only 1/2 of their salaries can be applied to a trade deal.
    Tough to trade Lee or Nate.

  2. Do you think the Knicks could make a play for Tracy McGrady and would that be enough to entice a max free agent to come? Would the Rockets take an offer of 1st round pick + young player + curry and lee to sacrifice their cap flexibility for a year?

    Is a viable option to wait till the summer and make a play for McGrady, offering him a chance to be a second fiddle to a max star? Would a starting lineup of:

    pg: duhon
    sg: McGrady
    sf: Lebron
    pf: Danilo
    c: Curry

    be good enough for the Knicks to compete (albeit, im sure some free agents would join). Would Bosh be a better fit with Danilo at the 3?

    I find there are many interesting storylines with the Knicks for this upcoming year.

  3. Hey Brothersteve,

    Cap Holds

    I didn’t count the cap holds for David Lee and Nate Robinson, or any of the Knicks other players with expiring veterans, because it would eat into all of their cap space. There’s no way that the Knicks don’t rescind their rights to said players.

    The cap hold for David Lee is 150% of his previous contract ($7 million) since he’s paid above the league average which amounts to $10.5 million. The cap hold for Nate Robinson is 200% of his previous salary ($4 million) which amounts to $8 million. As you can see, either one of these cap holds is large enough to stop the Knicks from having enough cap space ($20-23 million minus $8-10 million equals $13-15 million in a best case scenario) to sign a maximum contract to a player like LeBron James.

    No Trade Clauses + BYC

    David Lee and Nate Robinson do have no trade clauses + are base year contract players.

    The base year contract isn’t much of a problem since they’d be traded alongside another mid-sized (Jeffries) to large contract (Curry). David Lee will count for $3.5 million in a trade while Nate Robinson would count for $2 million due to BYC rule.

    Their no trade clause has no real value to them. Players who are given a one year contract are given a no trade clause in to protect their bird rights but you have no bird rights when a team rescinds the rights to said player. Which NY will definitely do in order to free up enough cap space to sign a player like LeBron James. Ergo, no value in stopping a trade because they’re losing their bird rights anyway. Donnie Walsh can make this clear to their agents and push a trade through if he explains it properly to the players + agents.

    Here’s a complete list of players with no-trade clauses in the NBA this season.

    It’s more complicated than it would have been last year, why Walsh should have made his moves then, but things are still possible.

  4. Hey Dino Gunners,

    I have no idea about what Tracy McGrady has left in the tank. Until we find that out we have no clue to what type of value he has as a player on the court, and/or in terms of market value in free agency or the trade market, and/or as a recruiting asset.

    If Tracy can only play to the level he did last year then he’s no longer a star player in this league. He was a major defensive liability and an inefficient shot happy star. Not exactly a positive factor for a team or for tempting a major star.

    Now, if Tracy McGrady can back to where he was 2-3 years ago, or somewhere in between say at an All-Star level, then he could be a major factor in all kinds of ways.

    Trade Possibilities

    I don’t expect the Rockets to trade Tracy McGrady until they know what he has to offer. We’ll hopefully begin to get some answers on this over the next month and a half.

    The Trade Idea

    Chris Duhon + Eddy Curry + 1st round pick for Tracy McGrady

    I don’t think Houston makes this deal but it depends on how much value Morey feels that future first round pick has.

    The Rockets have two point guards they value in Aaron Brooks and Kyle Lowry so I don’t see Duhon being a positive factor in a trade. I also cannot imagine a GM like Morey (defense first, rebounding second, tough guys, lots of effort, + stats based) seeing any value in Eddy Curry. So that’s a lot of dead weight … plus he loses his cap space on top of that.

    The only positive is the future first round pick versus all those negatives ….

    Knicks Future First Round Draft Picks

    If a GM did take on Curry for a future first round pick they’d be running the risk of NY signing two max free agents and building a championship contender. Thus, the pick would have no value.

    But that’s if NY pulled it off … if NY failed to pull it off, then the pick suddenly has value. If NY signs second tier stars they’ll likely (most likely road for NY) be a 45+ win team. If the Knicks completely bottom out in free agency, then you’re looking at a lottery pick.

    So it’ll all come down to how much value a GM gives that pick. Does that GM think NY will pull off their free agent plan? or not? And how big a risk is he willing to take on that?

    Those types of questions are nigh on impossible … for someone to figure out what a GM is thinking.

  5. Could the Curry and Jeffries contracts be used in a sign and trade situation? A team trying to get under the cap in 2011 could see some sort of value I suppose. You could sign Bosh for the max, then have Cleveland sign and trade Lebron for Curry and Jeffries with some spare parts included. Or is there some sort of rule regarding Sign and Trades I’m overlooking?

  6. Hey phrase,

    Yes, the Knicks can send out Curry and/or Jeffries in a sign and trade next summer.

    There would have to be some value in it for the other team though. The Knicks would either have to (1) take back bad contracts (2) give away talent (3) give away draft picks.

    Value

    If a team agreed to take back Curry and Jeffries they’d be taking on $18 million worth of salaries instead of just letting their max contract player go and freeing up that cap space/flexibility instantly.

    So that’s an additional $18 million of salaries (sign and trade) instead of zero salary (free agent just leaving).

    The other team would be gaining no additional cap flexibility by agreeing to a sign and trade. If other bad contracts were included in the deal then there could be some benefit for the club but that creates/continues a similar problem for NY’s cap situation.

    So Curry + Jeffries are still the same negative next summer in a sign and trade … that they are today in a normal trade.

    There would still need to be something of large value switching hands for it to be worthwhile for the other team.

    Curry + Jeffries Expiring Contracts

    Eddy Curry and Jared Jeffries will have value in the trade market as expiring contracts after the season ends.

    (1) Expiring contracts have no value to teams when they’re not taking money off the books — for example, a free agent, since the free agent has no contract with the team … or when trading for another expiring contract … No added cap flexibility available in either situation. So the trade becomes about talent and not contracts.

    (2) Expiring contracts do have value for teams who are looking to move bad medium-to-long term contracts and are looking to cut salary.

    The Knicks will be able to trade Curry + Jeffries for talent in a salary dump scenario. Normally the type of talent you can get back for $18 million worth of expiring deals is a borderline All-Star type (think Richard Jefferson). That could be a very good option for the Knicks.

    Core = RJ type + Gallinari/Chandler/Hill + max contract free agent = It’s still not the most inviting of situations. A good team and a better situation that before but still a long way from being a contender with no clear way for improvement outside of the young players.

    I still think the Knicks would need to create enough flexibility to add that second max contract player to make it worthwhile for someone like LeBron or Wade to join the Knicks. I don’t think an RJ type is good enough to get it done. It needs to be an All-NBA caliber talent rather than a borderline All-Star.

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