Posted by: Kingsguru21 | July 7, 2009

Salary cap is Set at 57.7 million

First, a big H/T to Ben Golliver of Blazers Edge for passing this along, but this is rather important news. So, in a sense, we know what the deal is. That’s important even if we could have guessed what the final numbers were at.

This means 2 important things. First, the salary cap declined for the 2nd time this decade (the last time was 2002-03), and the other important thing is that salary cap space in 2010 may be even at a bigger premium. The 2nd story means less to me than the first because the most common retort of the salary cap is the “economy”, and all that entails.

If revenues go up 2.5% that means that the NBA didn’t lose money even if some teams did. That’s all, folks, on that.

Now, onto 2010, what this means is that if revenues seriously decline, and I highly doubt they will, is that the salary cap will decline. When that happens there is less money for more players, and that creates a buyers market.

That’s exactly what the Kings should want. This depressed market actually hurts the New York’s, Chicago’s and LA’s of the world. Which is not a bad thing. If LA (Lakers–although it should be noted Donald Sterling makes more profit than what should be allowed off the Clippers) or New York makes a killing during the league’s boon times, than the smaller markets like Sacramento should get a break during trying times.

The problem is that so many people are afraid that the Kings are moving that the Kings can actually play this economy, in a way, to their advantage. Making the team better is what will, first and foremost, sell tickets in Sactown. Simple, peezy, yep n eazy.

This arena deal is confusing issue’s, as it was always bound to, and the deal with it will always make people angry. That’s to be expected. Some people, sometimes, are too stupid to figure something, that could be pretty simple, out. Or, maybe more accurately, completely think it through. People with PhD’s are not necessarily smart, nor are they dumb because they have a PhD. Which is not, of course, the point. The point is, if I may say so, is simple: One thing doesn’t necessarily make the other so.

Let me cite Larry Coon here since a prevailing opinion might be that I’m completely full of shit:

The ABC/ESPN TV contract, which took effect with the 2002-03 season, provided $4.6 billion over six years, but less in 2002-03 than NBC paid in 2001-02. As a result, the salary cap went down for the first time ever in 2002-03.

You see? This has happened before. And, I read this long ago before the “21st century Depression” hit. So what does this mean? It means that if revenues go up again, that the salary cap may go slightly up. It also may go slightly down if revenues are a small increased percentage of what they were in the 2008-09 season.

You ask yourself: Why does this matter? Again, it probably doesn’t with regards to the Kings unless they think they are a player away from making the playoffs. This also will likely mean that they think a young player may not progress for awhile, or won’t progress unless something drastic happens.

Now, onto what this means for 2009-10.

The Salary Cap is set at 57.7 million. The Luxury Tax is at 69.92 million. This is probably the more important number. Depending on how many teams are over that limit they’re might be a golden opportunity for the Kings to get a major asset (such as a 1st round pick) in the long term by taking salary back.

One thing fans will get confused, and I want to set this straight, is whether the Kings will be able to use their Mid Level Exception.

According to calculations I’ve made before (and apparently will have to make again–dammit), the Kings are near the use of the Mid Level. However, for you anti-MLE fans, you’re in luck. The Kings will be able to use any cap room they do have. Which means they can make any uneven money deal for a player at some point. This does not mean they can use an exception (like the MLE) if they choose.

However, I haven’t checked to see exactly what players they’ve renounced. (I also have looked periodically, but haven’t seen any real announcements. The Kings also haven’t signed Evans, Casspi or Brockman yet either.) So, in a way, they’ll be able to have it one way or the other. They have the cap room to keep, or they can basically not use it by not renouncing players.

If you were the Kings, wouldn’t you want to explore every option you do have? Yeah, me too.

Here is a good visual for salary of where the Kings are at, but it seems a tad high to me. The Kings will have anywhere from 6.3 to 7 million in cap room.

If my number is correct, and the Kings are at 50,050,384 for the season before Sergio Rodriguez’s salary, and after that’s included, you have something in the area of 51.627 million.

That means the Kings have about 6.1 million of cap room. Not too much, but not too little either. There’s no reason to keep yourself in range of the Mid Level when you can simply have cap room and sign a player to the same salary using cap room. In fact, why would you eliminate those options? You don’t.

But, what does that mean? What do the Kings have to do to accomplish this.

They have to renounce every player they have as a FA, and any 1st round draft picks they do own. However, since the Kings do not have Paul Allen buying up draft picks, they actually don’t have any rights to a player currently over-sea’s.

They would have to renounce the rights to Bobby Jackson, Ike Diogu, Rashad McCants, Calvin Booth among others. (Anybody whose a FA.) The most important of those 3 to waive is Jackson, Diogu and McCants who have big cap holds, and that will keep the Kings from having any cap room if they don’t renounce the rights to them. (Booth too, really.)

For you people with the genius idea of: “Let’s not sign Tyreke Evans or Omri Casspi yet! It will save cap room!” Uh, no, it won’t. They have cap holds for their salaries until you sign them. Which is why in the next couple days I suspect you’ll hear the Kings announcing they’ve officially signed Evans and Casspi to contracts.

None of this is a surprise, and frankly it’s pretty close that the Kings actually came to not even having ANY cap room.

So in a sense, it’s here. I’ve been waiting for this announcement. Now it’s here, and yippee at that, we can move on to something more important right now to the Kings future: Summer League.

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Responses

  1. Nice work Pook- I have a question for you. Is Rubio going to hold up 3+ million of Minnesota salary cap space for the foreseeable future? That is like getting kicked in the teeth…again.

  2. Yes there is a cap hold for all 1st round picks. Until that player signs. So, yes, that includes Rubio.

    As far as will it negatively affect Minnesota? Not this year it won’t. They are already over the cap for this season as it is. So, in that sense, they won’t have much to work with there.

    Now, as far as whether Rubio comes over, it’s probably still clear that Rubio is trying to get out of his buyout.

    Read this link off Canis Hoopus: http://www.canishoopus.com/2009/7/7/941253/los-abogados-de-ricky-rubio-han

    Anyway, I hope this helps.


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