Kevin Garnett is coming back. That’s great.
So… now what?
Lost in the excitement of KG’s return is the fact that this was basically the starting gun for an offseason marathon for Danny Ainge. He needed a quick resolution to this so he could see where his roster stood, and what he can do to fill it. So let’s take a look ourselves and see what we’ve got.
Step 1: The Known
If Garnett’s contract is indeed for 3 years, $34 million, then his starting point has to be somewhere just north of $10 million this year if they’re going the escalating, 7.5% raises. For simplicity’s sake, let’s just round it to $10 million because the extra little bits aren’t going to radically change what we’re doing here.
The Celtics are guaranteed to have the following players under contract this upcoming season:
- Kevin Garnett (approximately $10 million)
- Paul Pierce (approx. $17 mil)
- Rajon Rondo ($11 mil)
- Avery Bradley ($1.6 mil)
- JaJuan Johnson (approx. $1.1 mil)
So the known entities as of this very moment give the Celtics five players under contract for about $41 million. The salary cap last season was set around $58 million and the luxury tax threshold was just north of $70 million.
Step 2: Our free agents
While it might look like the Celtics have got about $16 million to spend, they really don’t because of what are known as “cap holds” (a very nice explanation can be found here). Ray Allen still takes up $15 million in cap space. Brandon Bass takes up $8 million. The good thing about KG’s contract is that it takes his $22 million cap hold off the books and replaces it with his actual salary (all Celtics cap holds can be found here). The holds reflect a number of different possibilities, including “Bird Rights“… which allow a team to exceed the salary cap to re-sign their own players.
Here are the options the Celtics have with their current free agents (Ray Allen, Brandon Bass, Greg Stiemsma, Marquis Daniels, Mickael Pietrus, Ryan Hollins, Keyon Dooling, and even Jeff Green).
- Sign them, which would remove the current cap hold, and replace it with the player’s actual salary.
- Renounce them, which would remove cap holds but also give up all Bird Rights. (For example, if the Celtics renounced Ray Allen then decide they want to try to re-sign him, they would only be able to offer him whatever they had left under the cap or part/all of their mid-level exception. Currently they can pay him whatever they want).
- Sign-and-trade them, which is a tool to allow one team (the team receiving the player) to take advantage of another team’s Bird Rights (the team trading the player). For example, the Celtics could sign-and-trade Ray Allen to a team that didn’t have the cap room to offer him a big contract before. The payoff for Boston is they get something in return for Ray rather than letting him walk.
- Let them sign somewhere else. Once that player signs with another team, the cap hold comes off Boston’s books.
With just five players actually under contract, the Celtics must first focus on which players they are going to try to retain and which they will let go so they can pursue other free agents. Once the various cap holds come off the books, the Celtics can get to work on bringing in other players. Which brings us to…
Step 3: Other free agents
Guys like OJ Mayo and Jamal Crawford are unrestricted free agents, and the Celtics have expressed interest in both. Chances are that once the dust settles, the Celtics will have exceeded the cap. That’s fine, because at some point, it becomes better to be over the cap than under it.
The cap is expected to be set around $58 million. The luxury tax will probably stay at the same $70 million.
If the Celtics can manage to keep their salaries, prior to pursuing other free agents, in the lower end of that range, they will have at their disposal two exceptions:
- The full, non-taxpayer mid-level exception. That will allow them $5 million to give to one player, or split among other players for contracts up to four years.
- The bi-annual exception. That will allow them nearly $2 million to give to one player, or split among other players for contracts up to two years.
A very important note: The determination on these exceptions is made AFTER the exception is used. SO…
If the Celtics, after re-signing, sign-and-trades, and renouncing, have a payroll of $67 million dollars, they CANNOT use the entire non-taxpayer mid-level because the resulting $5 million will bring them above the luxury tax. The Celtics would then use the TAXPAYER mid-level, which would give the Celtics slightly more than $3 million to give to a player, or split among multiple players, for contracts up to three years.
And now… the strategy
The owners really wanted a hard cap in this past CBA (a cap that cannot be exceeded with exceptions), and they sort of created one with the new luxury tax structure.
Here’s why the $70 million will act as a sort of hard cap for the Celtics.
In 2014-15, a new luxury tax structure kicks in that forces teams to pay a “repeater” rate if they have been luxury tax payers in the previous three seasons. By avoiding the luxury tax this season, the Celtics can set themselves up to pay lower taxes down the line if they felt the needed to in making a title run.
This is where it gets a bit confusing. Larry Coon as the breakdown of the new tax system, which includes repeater rates and all that jazz. Just know this, by avoiding the tax this year, the Celtics can save themselves millions later on.
With ALL of that in mind…
We’ve got KG, Pierce, Rondo, Bradley and Johnson under contract for about $41 million. Now let’s start adding players.
- Jeff Green? He could be getting between $7 and $9 million. He’s virtually guaranteed to come back. Payroll: $48-50 million. 6 players under contract.
- Brandon Bass? Let’s pretend he gets $6.5 million since that’s around what Glen Davis makes. Even if the Celtics sign-and-trade him, they’ll get $6.5 million back in salary… so this all works out numbers-wise. Payroll: $54.5-56.5 million. 7 players under contract.
- Our two draft picks, Jared Sullinger and Fab Melo. They will make a combined $3 million, guaranteed. Payroll: $57.5-59.5 million. 9 players under contract.
Let’s pause a minute to assess our roster at the moment:
Guards: Rajon Rondo, Avery Bradley
Wings: Jeff Green, Paul Pierce
Bigs: Fab Melo, Jared Sullinger, Kevin Garnett, JaJuan Johnson, Brandon Bass
E’Twaun Moore’s contract will become fully guaranteed if he is still on the team’s summer league roster by July 15. Let’s assume he will be. That’s about $800,000. Payroll: $58.3 million – $60.3 million. 10 players under contract.
The Celtics, with 10 players under contract, will be at, very likely, about $60 million. That gives them about $10 million in wiggle room to fill between 2 and 5 slots.
They will have a $5 million mid-level to pursue a free agent (or split among multiple free agents).
They will have a $2 million bi-annual to pursue a free agent (or split among multiple free agents).
These exceptions cannot be combined to give one player $7 million
And they will have veteran minimum contracts, which they are free to use on as many players as they want (here are the minimum salaries, which are calculated based on years in the league)
I don’t know who the targets will be from here. They could bring Pietrus back at the minimum to fill a hole. They could bring Wilcox back at the minimum to fill another. Or Dooling. Greg Stiemsma’s qualifying offer was just above $1 million, so if that’s his final number, he could be a nice, cheap, young option. And then they could target someone else with the $5 million.
Notice… I didn’t bring up Ray Allen’s name. He’s a candidate for the $5 million, but the Celtics would have to make a choice. Are they going to pay him, and skip the mid-level? Or are they going to pay him, and USE the mid-level, and just pay the tax?
If they pay the tax this year, it’s the typical dollar-for-dollar deal. So Ray could still come back if the C’s are willing to go into tax territory. What that does mean, though, is they’ll have to drop below that tax next season if they want to avoid the repeater tax.
So there are a lot of factors going into just how much they’ll sign guys to. And, of course, they could get someone like Green or Bass cheaper than my assumptions… which would adjust the numbers. Still, the Celtics are in a complicated situation. But with Garnett signing the deal that he did, at least we now know where the team stands.