I was inspired by a piece from Tim Kawakami to do a walkthrough of how I think about a situation like the Golden State Warriors adding a max player in the summer of 2016.
Like Tim, I will use a conservative estimate of a $75 million salary cap for that 2016-17 season, though I will throw in some figures of how it would work with a $80 million cap that could be closer to what we actually see two summers from now.
When looking that far in the future, I strip the entire salary structure down and start with only the mandatory pieces. If we are talking about Golden State and a max player in 2016, that means just Stephen Curry and the max player. We know Curry’s 16-17 salary, but the other guy’s is a mystery right now. Fortunately, if that other player is Kevin Durant we can work it out.
The most Kevin Durant can be paid for the 16-17 season is the larger of 30% of the salary cap (calculated slightly differently than the actual salary cap) and 105% of his salary from the previous season. Even at a conservative $75 million salary cap, Durant would make more under the 30% calculation.
At a $75 million salary cap, the Warriors would have to carry $40.39 million or less in non-Curry salary to sign Kevin Durant with cap space. At an $80 million cap, this number jumps to about $43.89 million. For reference, LeBron’s max is about $4 million higher than Durant’s due to his greater amount of NBA experience.
The Money on the Books
That remaining $40.39 million or so can come from any source but must include everything if the Warriors are to sign a max player using cap space. That means on the books salaries as well as cap holds to pending free agents and clearing the space would also mean no trade exceptions and the much smaller Room Mid-Level Exception.
At present, the Warriors have about $30 million committed to Andrew Bogut, Andre Iguodala, Shaun Livingston and Nemanja Nedovic for that season. It should be noted that Nedovic’s contract is a team option and Livingston’s contract is reportedly about half-guaranteed, so there would be a little wiggle room if either is still in the equation at that point.
The players not counted that the Warriors would presumably want to retain include 2015 restricted free agents Klay Thompson and Draymond Green. Their combined price tag is larger than the $10 million remaining (there’s a chance each of them gets that much, though I expect Thompson to get much more and Green less) so that means Bob Myers would need to make some choices. When you add in Harrison Barnes hitting restricted free agency that summer the situation gets even more challenging.
Both Iguodala and Bogut will be expiring contracts that season and we know that teams will be clearing cap space with reckless abandon to acquire a star or two so there could be interest in either or both should they age reasonably. Depending on the salary they get, either Thompson or Green could price himself out of a spot on that 2016 Warriors team as well. If the Warriors want to sign someone to a max deal using cap space, at least one and likely two of Bogut, Iguodala, Thompson and Green will need to go.
The Bigger Swings
As I said before, you can see that $40.39 million for players beyond Curry and Durant in a series of different ways: it could be retaining existing players either currently on their deals or signing new ones soon, adding new players via free agency or trades, or some combination of the two.
By far my favorite possibilities for Golden State in 2016 come from using that $40.39 million more aggressively. The Warriors have an elite player locked up to a below-market contract and should be close to a new arena and presumably a larger revenue stream from that and their local TV deal which expires at the end of the upcoming season. Furthermore, I sincerely doubt we see a hard cap in the new CBA so playing the free agency game for a soft cap and heavy luxury tax payments makes the most sense. Plus, building a strong core then makes it a near certainty that Stephen Curry would stick around when he hits unrestricted free agency the following year.
If they could clear the money, the Warriors could actually sign two max players even at the higher 35% salary slot and still keep Curry. Doing so would require some major sacrifices at some point since the team has so many other assets. Fortunately, the fact that other teams will be clearing the decks too means that Golden State would not have to be particularly proactive unless someone’s contract looks substantially worse two summers from now. That said, we have no idea how willing other franchises would be to enable a team to have a core of Stephen Curry and two of LeBron James, Kevin Durant, Kevin Love, Dwight Howard, Joakim Noah, Marc Gasol, Al Horford and Goran Dragic. That said, each individual piece holds value right now so the sales pitch would be much easier. This approach worked reasonably well for the Rockets with Jeremy Lin and Omer Asik even though the end result may not have been to their liking.
This concept of a core with three max players also helps explain why moving Klay Thompson to get Kevin Love makes so much sense if Love is willing to commit to staying long-term. Even if Love takes the most money he can, the Warriors could still open up another max slot in 2016 without too much trouble as long as the league does not play some serious hanky panky with the new TV deal and the cap. We know right now that Thompson will command a massive salary on his next contract and a team with one of the best young players in the sport should be able to command someone better than Thompson to be the No. 2 or even No. 3 player, as good as Thompson could become. While the Warriors have a strong team right now, a foundation of three All-Stars in their mid to late twenties would be legitimately special regardless of what other teams around the league can manage that summer.
Bob Myers and the rest of the Warriors’ front office have some major decisions to make but the combination of Stephen Curry’s below market contract and the expanding salary cap create some genuinely compelling options.