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The NBA is expecting it’s salary cap to be around $56.1M. This is considerably higher than what experts had predicted in December when the league’s basketball related income was projected to be lower. What does this mean for the Raptors?

First up, the Raptors will no doubt renounce the rights to O’Bryant, Wright and Nesterovic thus freeing up a cap-hold of $5.57M. This amount would otherwise be counted against the cap when making any transactions. The only question is whether they will renounce Amir Johnson or not. His cap-hold is $7.88M.

1. If Bosh exercises his $17M option

The Raptors will have $63.47M tied in salary, preventing them from signing free agents from other teams. They can still sign their own free-agents using their Bird rights but as I said, the only players I can even think of re-signing are Amir Johnson and perhaps Antoine Wright. Any new NBA players we acquire would have to be via trade. Of course, we could always sign players from other countries who don’t have contracts with NBA teams. Maybe that’s why there was a rumour about Colangelo looking at a couple players from the Israeli league.

As Bosh has already said that he’ll test free-agency, this is really a moot point.

2. If Bosh walks

Assuming we renounce Johnson (thus giving up his Bird rights), the Raptors will have $46.32M tied in salary in 9 players – Turkoglu, Calderon, Bargnani, Jack, Evans, Banks, DeRozan, Belinelli and Weems. We will likely select 13th in the draft which means we have to pay the rookie approximately $1.60M. So, we’d have $46.3M + $1.60M = $47.90 in salary tied up. This leaves us with about $8M to sign other teams’ free-agents to fill the other 2 roster spots (plus the three inactive roster spots taking the total to 15). By giving up Johnson’s Bird rights, we cannot sign him after signing other free-agents as it would likely put us over the cap. The only way we could sign other free-agents for those $8M and re-sign Johnson is if we heavily back-load his contract which I’m not even sure is allowed.

Assuming we don’t renounce Johnson, his cap-hold will count towards the cap which would take us to $54.2M which is pretty close to the cap. The would only leave enough money for us to sign minimum salary players ($475K). We could squeeze a couple of these while staying under the cap and then sign Johnson (using his Bird rights) to go over the cap.

If we have an eye on a particular free-agent, the only option is to renounce Johnson and throw the money at the target.

The following teams can currently sign Chris Bosh to a max-deal as they are significantly under the cap. Teams with a * next to their names have the cap space to sign two free-agents to max-money contracts.

  • New York Knicks*
  • Miami Heat*
  • Washington Wizards*
  • Chicago Bulls
  • Sacramento Kings
  • Minnesota Timberwolves
  • LA Clippers
  • NJ Nets*

Overall, a higher cap is bad news for the Raptors as it allows teams to offer Bosh more money without releasing cap-holds on existing players. You should check out Larry Coon’s article on ESPN which talks about the potential ramifications of the cap figure and how it creates opportunities for teams like New York which weren’t there before.

3. If a Bosh sign-and-trade is engineered

We would renounce Bosh’s rights, sign him to a max-deal and trade him within 48 hours. Bosh would be entitled to make 30% of the salary cap which amounts to $16.83M with the salary escalating each year. Note that the benefit of signing an max-money contract with your existing team isn’t in the base-year salary, but in the percentage increases per year. If we trade Bosh to a team that is under the cap, then we don’t have to receive an equivalent amount of salary in return and could potentially still be under the cap after a Bosh trade. If we trade Bosh to a team that is over the cap, the contracts we get in return would have to be within $100,000 of the salary traded.

Depending on what the Raptors’ long-term plans are, they could opt to use Bosh as a salary dump or as a mechanism to get some pieces back. In the case of a salary dump, we’d be about $8M under the cap (assuming we renounce Johnson).

4. If Bosh decides to extend at the max

This is very much like #1 as the first year salary for a Bosh max-extension and his opt-out amount are very similar. Ideally, we’d like to pull something like what Milwaukee did in 2005 when they waited to sign Michael Redd using his Bird rights until after they had signed Bobby Simmons. However, Bosh’s cap-hold is too high for that to happen.

If the Raptors want to use the mid-level exception to sign a player, they need to be over the cap but under the tax at the beginning of the off-season. If the Raptors renounce their free-agents early enough, they’ll be under the cap and not have the MLE (approximately $5.5M) available. Since the Raptors used the bi-annual exception to sign Rasho Nesterovic last summer, they cannot use it this year.

What I’m really driving at is that in order for the Raptors to create any sort of flexibility, they must off-load a big contract such as Turkoglu, Bargnani or Calderon. As you can see, without doing that we’re simply left to play around with Johnson and Wright’s contract which really won’t bring in anything of significance no matter how you slice it. The only way this team can retool is via trade and Colangelo will have to get very creative in order to do so because he’s selling stock that is over-priced.

If we don’t shed some salary or manage to pull a trade which nets credible talent, we’ll be left searching for minimum-salary players or once again venture into Europe looking for the next coming of Will Solomon. The easiest way to shed a contract is to be under the cap (aka renounce some free agents) and then do business with a team that’s also under the cap. Since I think Colangelo would want to use the MLE, he’d want to be over the cap at the start of the off-season which means he’ll conduct business early to do both – 1) shed a contract 2) allow himself a shot at the MLE.

It’s also interesting to note that if the Raptors had hung on to Jermaine O’Neal’s contract for another year (instead of turning it into Banks and Marion and eventually Turkoglu) and not prematurely exercised the option on Marco Belinelli ($2.38M), we’d have enough cap space to re-sign Bosh and another free-agent to a max-money contract. Since we sucked with a high salary this year anyway, it would’ve been nice to just suck with a lower salary (and expectations) and be in line to make a play on someone like Joe Johnson or Dwayne Wade. Colangelo’s penchant for applying bandaid fixes really bit us and it’s the main reason Miami is in the advantageous position it’s in.

Hope all that made sense. Thanks to phdsteve and Ryan Wolstat for providing input to this post.