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On Warriors' Big 3 Possibility In 2016

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.

The Non-Negotiables

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.

The Law Of Small Numbers

Part of what makes basketball so fun is that it combines the collaborative play of team sports with individual dominance. Even though team quality matters a great deal, we know that stars win championships in the NBA.

Five years ago, I dug out the stat for my old site that since 1956, only five teams had ever won an NBA championship without a player who won or would win an MVP award.

Even more astoundingly, only the Detroit Pistons have won a championship without a player who had already won an MVP award since 1981 when the Boston Celtics took the title on a team that had a pre-MVP Larry Bird along with Parish, McHale, and Tiny Archibald. Both of those streaks have added another six champions since that piece was written.

While Kevin Love does not factor heavily into the conversation of players who could win the MVP, he has been an elite player before the age of 26.

NBA teams understand this and value elite talent. We see this throughout the transaction system. The other reason why high-quality players fetch such high prices is that there are not enough of them to go around.

I call this the NBA’s law of small numbers: if you have a valuable asset rare enough, teams will find a way to make it happen.

The Miami Heat cleared their books via sorcery to create the three-player allure strong enough to draw LeBron James away from other opportunities in 2010, and this year we have seen quality franchises like the Houston Rockets combine space for a max player with a strong roster.

All of these factors make the Golden State Warriors’ apparent caginess at getting a Kevin Love deal completed dangerous for their future. While taking a quick glance at the market for Love around draft day could have led to confidence in Oakland, any concept that letting the string play out would be to their advantage would be deeply misguided. After all, the other effect of the NBA’s law of small numbers is that some teams do not get what they want.

In this case, that could potentially be three potential teams: Houston, the Chicago Bulls and Cleveland Cavaliers if LeBron ends up there. With LeBron James, Carmelo Anthony, and possibly Chris Bosh sitting as the major difference-makers this time with exactly none of them spending last season with any of those three teams, it always stood to reason that at least one or more of them would miss out on the best of the best.

Inevitably, whatever franchises end up without a chair when the music stops will turn to Kevin Love. This should scare the Warriors because each of those teams holds assets that they cannot match should those teams choose to deploy them: Chicago possesses a high-end young player in Jimmy Butler on the same salary timeline as Klay Thompson and quality cost-controlled players that could help Minnesota now in Taj Gibson and Nikola Mirotic, while Houston has a series of fun young prospects and a shiny new draft pick from New Orleans, and Cleveland has a whole ton of assets if they can pick up the best player in the sport with cap space.

Flip Saunders may like Klay Thompson quite a bit and may see David Lee as an asset despite his contract. Even then, the Bulls and Cavs could put together trade offers to blow Golden State’s out of the water. While we do not know if those teams will enter the Kevin Love derby, the mere possibility should have indicated that the Warriors needed to push hard for a good deal instead of a slight chance at a steal.

The even more jarring fact is that the Warriors would have needed to make a big sacrifice somewhere even if they somehow added Kevin Love without losing Klay Thompson in the process. For the 2015-16 season, a team that has never paid the luxury tax would have commitments to Stephen Curry, Andrew Bogut, Andre Iguodala, and Kevin Love with both Thompson and Draymond Green in line for substantial raises. Simply put, I would not have expected Joe Lacob and company to foot that kind of luxury tax bill for two-plus seasons even with a new arena on the horizon. That means at least one of those key pieces would have to go anyway- why not use one to make this trade happen?

If the reporting on this story has been correct, the Warriors better have an ace in their pocket or pray for a huge season from Thompson because playing the long game rarely pays off when non-major markets go after elite young players.

Why Sign-And-Trades Sometimes Aren't Possible For The Incumbent Team

At the end of my Shaun Livingston piece, I put in a little footnote that had a mistake a reader thankfully pointed out. As a CBA nerd, when something like that happens I try to write it out so that hopefully others do not fall into the same pit down the line.

In the case of Shaun Livingston, it came in the minefield of sign-and-trades. At their most basic, the concept for a S+T deal is easy to grasp: the trading team must be able to sign the player to that contract and the acquiring team has to be able to receive it.

We end up focusing most of the time on the team getting the signed and traded player because there are different and more commonly used restrictions on that part of the transaction. The receiving team must be able to fit the contract in using cap space, a trade exception, or an appropriate amount of salary going back to the trading team. In addition, under the current CBA only teams under the luxury tax apron can acquire a player using a sign-and-trade with doing so carrying the added effect of hard capping that team at the apron for the rest of the league year.

This happened to the Warriors last season when they ended up adding Andre Iguodala from Denver with a sign-and-trade to retain their other exceptions.

The part of these transactions that gets far little attention focuses on the team that has to sign and then trade their player. In many circumstances, this does not get discussed because it happens pretty easily. Most of the high-end players in the league do not get into situations where this becomes relevant but we can see in this case how this strange situation can come to pass.

The easiest way to think about how a team would be unable to sign their own player to a contract is through a series of negatives:

1. They cannot have enough cap space to sign him- This one is easy. If the team has the space to sign the player outright, this part of the trade happens painlessly. In this case, the Nets are miles over the salary cap.

2. They do not have full Bird rights- There are different levels of Bird rights (Non-Bird, Early Bird, Full Bird) that all have different rules and privileges. If a player has played for three seasons with the same team without clearing waivers or changing teams as a free agent, the team has full Bird rights so they can go over the cap and tax to sign him. In this case, Livingston signed with the Nets as a free agent before the 2013-14 so he is a non-Bird free agent for them. Note that because the CBA is evil, the non-Bird status is a form of Bird rights- the team just has less flexibility than the other forms.

3. The team cannot pay the salary using an exception- This has a few different components. First, the salary has to be higher than the team can pay using an exception. In this case, Livingston is signing for more than 120% of his 2013-14 salary so the Nets cannot use his “Non-Qualifying Veteran Free Agent” (non-Bird) status. In addition, the reports are that the Warriors want to sign him to the full non-taxpayer Mid-Level Exception. Since the Nets are over the apron, they only have the taxpayer MLE available and thus cannot sign him to a contract at that value using their MLE.

In these circumstances, the original team cannot sign the player to the contract he agreed to so the transaction must occur as a straight signing. Unfortunately for the Warriors, that limits their flexibility somewhat because using part of their huge trade exception would have allowed them to have their Mid-Level to use for one or more free agents. Instead, it just becomes another interesting lesson about an intricacy of the CBA.

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