Nice Work If You Can Get It. We’ve all heard and used that expression, right? It particularly applies to the job of NBA basketball player.
I got to thinking about NBA player salaries today, as rumors are really getting cranked up around the Washington Wizards. This is a team with championship aspirations, with an All-Star backcourt of John Wall and Bradley Beal. But things are really off the rails. The Wizards are 6-11, in 11th place in the Eastern Conference and 3rd in the Southeast Division behind Charlotte and Orlando. Recent reports include cuss-fests at practice, among the players and some directed at Head Coach Scott Brooks. As such, the team is rumored to be shopping some of their players.
About 30-45 seconds after the rumors started making the rounds, my hometown Charlotte Hornets started calling. “Hey, we could use Bradley Beal here in Charlotte,” GM Mitch Kupchak allegedly said.
This would be some kind of wonderful if we can pull it off. Kemba Walker is in the last year of a contract that leaves him grossly underpaid. He’s 28 years old, in his 8th season and is actually leading the NBA in scoring, even ahead of the point machines in Golden State. He says he’s fallen in love with the city of Charlotte and wants to put down permanent roots. If we can manage to re-sign him and acquire Beal, that probably gives us one of the 5 best backcourt combos in the league and makes it even more likely that we make the playoffs, something that has only happened 3 times since the NBA returned to Charlotte in 2004. We’re currently 7th in the Eastern Conference, one/half game behind 6th place Boston and only 1 game behind 5th place Detroit. After 2 years of going 36-46, and not really even being that good, we have a promising future with young players Miles Bridges, Malik Monk, Dwayne Bacon, (hopefully) a re-signed Walker and new Head Coach James Borrego. But it all hinges on getting Walker under a new contract.
What will it take to get Walker to sign? Given his attitude, you would think he’s not going be one of those “what, you have the gall to offer me $199,999,999.99 instead of $200 million? How dare you insult me like that! Get lost, I’m going elsewhere!” kind of guys. But, considering he is playing better than every player in the league, including LeBron James, Kupchak and Michael Jordan would be idiots of the highest order to offer him anything less than a maximum contract. The other side of the coin is, can the Hornets really afford to give him a max contract? What kind of roster could they construct around him with him taking up so much salary cap room?
Wondering this, I started digging. The website HoopsHype.comhas a database with the salaries of all 515 NBA players, as well as team payrolls. I also found an article on the SB Nation site that gives a breakdown on how the luxury tax is applied to teams that exceed the salary cap
This can get a bit sticky, so here’s the background. For this season, the salary cap is $101.869 million. The payroll at which luxury taxes would begin to be paid is $123.733 million. The luxury tax rate breaks down as follows, with figures for this season added:
·         150 percent for amounts up to $5 million over the threshold (to $128.733M).
·         175 percent from $5-10 million (to $133.733M).
·         250 percent from $10-15 million (to $138.733M).
·         325 percent from $15-20 million (to $143.733M).
·         375 percent at $20 million (to $148.733M).
·         425 percent at $25 million. (to $153.733M)
·         And so on.
But there is also the repeater tax. If you pay the tax in three of four seasons, you are dubbed a repeat offender and the tax at each level is boosted:
·         250 percent up to $5 million
·         275 percent up to $10 million
·         350 percent up to $15 million
·         425 percent up to $20 million
·         475 percent up to $25 million
·         And so on.
What I like about the NBA salary structure is that revenue is more equally distributed among the teams than Major League Baseball, and a team’s market size is MUCH less a factor than in MLB – exhibit A is the Spurs, who are in the 28th-largest city in the US, and have won 5 championships in the 21stcentury, while the teams in New York and Chicago haven’t even been to the NBA Finals at all.
Getting back to Kemba Walker and the Hornets… The Hornets have the 15th-largest payroll in the league, at $119.915 million. That puts them only $3.818 million under the luxury tax. In theory, the Hornets could do a 1-for-1 trade of Nic Batum to Washington for Beal. Beal’s salary is $25,434,262, and Batum’s is $24 million. However, the Wizards probably would want more payroll flexibility and younger players than that deal would yield. And that doesn’t even begin to address how the Hornets would manage to pay Walker what he should be paid on his next contract.
Walker is the victim of highway robbery right now. He’s getting paid $12 million this year, placing him 112th in the league. A maximum contract for Walker would be in the neighborhood of $220 million over 5 years, or about $44 million per year on average. That pretty much puts the payroll for next year at about $153 million without any other personnel changes, which would result in a $106 million luxury tax bill. How would the Hornets manage to give him that deal and somehow avoid that prohibitive tax? Here are the most obvious options:
·         Get rid of expiring contracts. Michael Kidd-Gilchrist will be a free agent after the 2019-20 season, what will be referred to as an “expiring contract” next summer. These contracts are highly prized by teams, as they provide payroll flexibility for future seasons. He is slated to make $13 million next season. He is one of the best defensive players in the league and losing him would hurt big-time on that end of the floor. Bismack Biyombo is to make $17 million. He is a great shot-blocker but is completely useless offensively. Few teams would want him as an actual player on the court; the expiring contract would be the only thing attracting another team. Marvin Williams is to make $14.0875 million next year, and also hits free agency in the summer of 2020. He is a prototypical “Stretch-4” – someone who plays power forward (position #4) but is very good at outside shooting, especially from 3-point range. But he’s 32 years old and has been playing grueling NBA schedules for 13 years after 1 year at North Carolina.
·         Renounce rights to Jeremy Lamb. If we trade for Beal, this is a moot point, as both Beal and Lamb play shooting guard, and while Lamb is thriving under Borrego, he’s no Bradley Beal. If we don’t trade for Beal, losing Lamb would be a significant loss. Lamb is making $7 million this season and is a free agent this coming summer.
·         Trade Cody Zeller. This would be a big risk unless career backup Willy Hermangomez is ready to be a starting center. He was languishing at the end of the Knicks bench before being traded to Charlotte near the trade deadline last February. He has shown marked improvement, but would he really be good enough to bang bodies with other NBA centers? Zeller is scheduled to make $14.47191 million next year and $15.41573 million in 2020-21.
And of course, trading any of these players isn’t all that easy. Another note from SB Nation shows that “In most NBA trades, salaries have to match. There are exceptions, but the most basic and true rule about NBA trades is that salaries have to match. What does match mean? In the NBA, that means teams over the salary cap can receive no more than 125 percent plus $100,000 in current-season contracts compared to what they send out. So if a team sends a player making $10 million this season to another team, and both teams are over the cap, the first team can receive a maximum of $12.6 million in salary in return.” So any of the above trade possibilities can only reduce the Hornets payroll by 25 percent of the departing player’s salary. But in the cases of expiring contracts, the Hornets would be under less pressure to take a bad contract (like the current Nic Batum contract) in return.
This is giving me a headache. What is the most obvious aspect of this conundrum? This is nice work, if you can get it.