Since 1990, the San Antonio Spurs have won at least 47 games in every season but one. Their prize for the year they didn't was Tim Duncan. The torch has been passed seamlessly from David Robinson, to Duncan, to the Tony Parker/Manu Ginobili duo and now to Kawhi Leonard.
It should come as no surprise, then, that the Spurs are one of the favorites to land Portland All-Star LaMarcus Aldridge, the best free agent on the market that could actually leave his current team. Aldridge and Leonard would then triumphantly lead San Antonio into a new era that should be filled with many more 50-win seasons and titles.
Yet, actually creating the room to sign Aldridge will not be as easy for the Spurs as it seems. Contrary to popular belief, the Spurs aren't guaranteed to have maximum cap space this summer. There are a number of scenarios in which San Antonio could create the space necessary to sign Aldridge, but they almost certainly require sacrificing key players from their 2013-14 title team. By the time the Spurs move those pieces, Aldridge could already be off to join the Lakers.
The Spurs' challenge is a perfect illustration of the salary-cap gymnastics NBA teams must perform every year in the hours after free agency begins.
The Spurs' situation in a nutshell
The Spurs currently have only five players under contract: Tony Parker, Tiago Splitter, Boris Diaw, Patty Mills and Kyle Anderson. Combined, they make $35.3 million, which is well under the $67.1 million salary cap.
But that doesn't mean the Spurs are actually under the salary cap. Each free agent is assessed what's known as a cap hold, which is always a certain percentage more than the player's salary the previous season. Think of a cap hold like a security deposit. It prevents teams from signing someone's free agent with cap space, then benefiting from the exceptions that allow teams to go over the cap to re-sign their own players.
The actual cap hold for each player depends on the kind of free agent they are and the number of years they've been in the league. Here is the Spurs' situation once you include cap holds.
The first-year maximum salary for Aldridge is a little less than 30 percent of what's expected to be a $67.1 million cap, which comes out to about $18.8 million. The Spurs are $22 million OVER the cap with all their holds. Time to start hacking away.
The easy part
The Spurs will surely release the cap holds of players 10-15 on that list without losing much sleep. They aren't part of San Antonio's future plans.
Those players are now removed, but the last three spots are reserved for what's known as incomplete roster charges. Whenever teams have fewer than 12 players on their roster, they are assessed one cap hold equal to the rookie minimum salary for each spot under that minimum. Since the Spurs would have nine players either under contract or with a cap hold, they have three incomplete roster charges.
There's still a lot of work to do.
Keeping Duncan and Manu
All indications are that the two Spurs legends want to return for at least one more season. Duncan made $10.3 million last year, while Ginobili made $7 million. They have taken less than their market value multiple times over the course of their careers. In order to have a chance at signing Aldridge, the Spurs will almost certainly make them take less again.
As mentioned earlier, there are two ways to remove a cap hold. One is to renounce the player, which almost always means saying goodbye to them. The other is to quickly agree to a new contract with them. At that point, the player's first-year salary replaces the hold. This is beneficial to the Spurs because the first-year salary for both Duncan and Ginobili will be significantly lower than their cap holds.
The question is how much sacrificing they'll do. It appears the Spurs will try to convince Duncan to play for around the average salary. Per the San Antonio Express-News:
There are several NBA player personnel executives who believe the Spurs will offer Duncan a two-year contract that begins between $6 million and $7 million, with a partial guarantee and a player option in the second season.
NBA rules prevent the Spurs from structuring that contract in a way that gives Duncan $1 million this year to preserve space and $12 million the next. Maximum raises must be within 7.5 percent of each other when re-signing players with general Larry Bird rights, per NBA rules. For simplicity's sake, let's say Duncan can make $6 million next year and $7 million in 2016-17.
Ginobili will likely take even less than that. The Spurs could ask him to take the minimum, which would be just under $1.5 million for a player with his much experience. But is that enough to convince Ginobili to put off retirement? If San Antonio wants to compromise, they may have to offer a little more than the minimum.
There is one option that could benefit both parties. The Spurs could renounce Ginobili and remove his cap hold, then sign him to the Room Mid-Level Exception starting at $2.814 million. That's the mid-level exception the Spurs will get by virtue of being an under-the-cap team. This allows (and actually forces) them to sign him after inking Aldridge. Ginobili essentially gets treated like a free agent on another team in this scenario.
There are two complications. For one, it's asking a lot for Ginobili to accept an arrangement that pays him 60 percent less than last season. For another, the Spurs may need the Room Exception to fill out the roster once Aldridge signs. Using it on Ginobil means the Spurs are limited to minimum salaries otherwise.
Nevertheless, it's a tempting scenario for both sides. It gives Ginobili time to make his decision and it gives the Spurs additional cap room to get to Aldridge's maximum. Let's assume that Duncan agrees to an early deal and Ginobili signs for the Room Exception.
NBA Free Agency
The Kawhi Leonard situation
We haven't mentioned Kawhi Leonard, who is a restricted free agent that the Spurs shouldn't let get away under any circumstances. Any new deal with Leonard will, in theory, eat into the Spurs' precious cap space.
Yet there's an easy solution here assuming Leonard goes along with the plan. He is eligible to earn 25 percent of the cap on the first year of his maximum salary, which will be around $16.5 million. But that dollar figure doesn't go onto San Antonio's cap sheet until the deal is officially signed. Until then, Leonard's cap hold, which comes out to about $7.2 million, sits there. Seven million is a lot less than 16.5 million.
As long as Leonard helps out, the Spurs can wait to actually finalize his new deal until after they clear enough space for Aldridge. Leonard could sign an offer sheet elsewhere and torpedo the strategy -- and Spurs rivals with cap space absolutely should make offers to test Leonard's resolve -- but as long as he's confident the Spurs will take care of him, San Antonio will be OK.
There's still more work to be done
Say all that happens, though. The Spurs still have a lot of money to make up.
LaMarcus Aldridge is not signing with the Spurs for a first-year salary of $10 million, no matter how much he wants to leave Portland. Significantly more work must be done to get the Spurs in the range of the $18.8 million Aldridge is eligible to sign for in Year 1. Trading Patty Mills and Kyle Anderson while taking no salary back won't cut it.
(The Spurs could coax Ginobili into retirement, but that's cold even for them. Maybe Ginobili retires anyway and that becomes a silver lining. Let's assume for now that he won't).
Thus, the Spurs likely must make at least one of several difficult choices:
1. TRADE BORIS DIAW WHILE TAKING NO SALARY BACK: Diaw is one of the team's most important players, but started to slow down during the regular season. He signed a four-year, $28 million deal in the summer of 2014. The deal declines each season, is partially-guaranteed in Year 3 and fully unguaranteed in Year 4.
Any team with cap space that's looking for a playmaking power forward might give him a look, but the Spurs may have to attach additional draft picks and/or the rights to players the Spurs have stashed overseas to entice teams. They might still do that if it means keeping Splitter. Diaw turns 33 and could see his production nosedive on a different team.
2. TRADE TIAGO SPLITTER WHILE TAKING NO SALARY BACK: Splitter has value as one of the league's top defensive centers, but struggled with a calf injury last year. He has two years and just under $17 million left on his deal, which is excellent value if he stays healthy, but that's a big if. He's also turning 31 next season and would become somewhat redundant if the Spurs sign Aldridge.
The issue is that San Antonio must complete this trade quickly to get Aldridge. They do not have the luxury of letting free agent centers sign and then seeking out the teams that miss on them as trade partners.
3. RENOUNCE DANNY GREEN'S RIGHTS: This would sting, but it's the Spurs' only recourse if they can't find a trade partner for Diaw or Splitter. Green is an elite defensive player and an excellent three-point shooter, which is why Tom Ziller has him ranked 14th in this class. His market value is well over eight figures, and many teams will be willing to pay that. Renouncing him essentially means saying goodbye and the Spurs will not be able to replace him so easily.
But if the choice is between Aldridge and Green, Aldridge is the obvious winner. The Spurs will have to find a starting shooting guard elsewhere.
Don't say sign-and-trade
This may seem like a workaround to the Spurs' cap issues, but in practice, it's not. That's because the 2011 CBA made sign-and-trade arrangements much more difficult than in previous years.
The most important rule: a sign-and-trade cannot put the new team more than $4 million above the luxury tax under any circumstances. This number is known as the "apron." No matter what happens, the Spurs must stay under that number for the duration of the season. They effectively are forced to operate with a hard cap.
The luxury tax is expected to be around $81.6 million, so the "apron" is $85.6 million. Say the Spurs and Blazers agree to a sign-and-trade that gives Aldridge his maximum and sends him to San Antonio for some combination of draft picks and the rights to foreign prospects.
This is what happens:
All good, right?
Not exactly. Remember: Leonard's situation still must be addressed and the Spurs now cannot go over $85.4 million under any circumstances. A five-year maximum contract for Leonard, a new deal for Green and filling out the roster will blow through that figure.
A sign-and-trade therefore hurts more than it helps. The Spurs will still almost certainly need to lose at least one of Splitter, Diaw and Green to even have a chance of signing Aldridge and staying under that hard cap number. Realistically, they'd still be in jeopardy of hitting the hard cap even if they trade Splitter and let Green go.
A possible loophole
There's one possible scenario where the Spurs could sign Aldridge and keep Splitter and Green, but it's a long shot. CBA expert Larry Coon explained it to me over the phone.
Suppose Duncan wants to play for at least two more seasons. He's certainly shown little signs of slowing down, so there's no reason he can't. He and the Spurs could agree to the following arrangement:
- Duncan signs a one-year contract for the veteran's minimum for next season. He would be paid just under $1.5 million, but due to NBA rules, only $950,000 would count against the Spurs cap.
- In exchange for his sacrifice, the Spurs make him whole by signing him to a three-year contract in the summer of 2016. San Antonio has his full Larry Bird rights, so theoretically he could sign a maximum deal for 35 percent of an exploding cap. Realistically, the two sides would have to pick a number that fits. For simplicity's sake, let's say three years for an average of $10 million per season.
- Duncan plays one more year and then retires.
- The Spurs and Duncan then agree to pay the remaining $20 million or so left on his contract in any arrangement they choose. The team is not required to defer money when a player retires in the middle of his contract, but it would be beneficial in Duncan's case. The Lakers did this when Magic Johnson and James Worthy retired, according to Coon, and they are just one example.
This could raise the league's suspicions because it's clearly taking advantage of a cap loophole, but it could also be explained if Duncan does play a full second year.
If that happens, here is the Spurs' cap sheet for next season.
Now, the Spurs are at least in the ballpark. They can create enough cap room outright by trading Mills away while taking no salary back, and while Mills is a good player on a very good contract, he's not as important as Green or Splitter. San Antonio could also convince Aldridge to take less money by noting that there's no state income tax in Texas, as opposed to Oregon or California.
This scenario is unlikely, but it's out there.
The Spurs absolutely can create the room necessary to sign Aldridge. They have plenty of ways to save, whether it's signing Duncan and Ginobili to below-market deals, trading Splitter or Diaw and/or letting Green walk. The Duncan loophole also exists as a remote possibility.
But they must make a lot of difficult decisions in a very short amount of time, all while Aldridge is taking meetings with teams that already have the necessary cap space. Ideally, they must make these decisions with full cooperation from Duncan, Aldridge, Green, Leonard and Ginobil, which is by no means guaranteed.
This is the ideal sequence:
- If Duncan decides immediately he wants to play again, he signs for below his market value.
- If a team decides it will help the Spurs out, they take on Splitter and/or Diaw without sending salary back.
- If Aldridge is willing to wait on San Antonio to execute Steps 1-2, he signs for the max.
- If Green, who is losing leverage on his impending pay day with every second that goes by, doesn't agree to a deal with another team during Steps 1-3, he re-signs using Bird rights.
- If Leonard hasn't grown antsy and accepted an offer sheet with another team during Steps 1-4, he re-signs using Bird rights.
- If Ginobili still wants to play, he signs for the Room exception.
That's a lot of ifs. It's certainly doable, but it's also a tough task even for a front office as brilliant as San Antonio's.
Keep in mind: they must pull this off in a matter of days and even hours, not weeks. Now you see why the NBA offseason gets so crazy?
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