How the latest salary cap structure affects the Bulls

Per Ken Berger:

The essence of the system described by Stern was an NHL-style cap
system with a targeted salary of $62 million per team and a
to-be-negotiated range from a minimum to an amount above $62 million
that teams could spend up to through various exceptions currently in
place - such as the Larry Bird exception and mid-level exception. An
escrow-like system would be used to adjust for teams coming in below and
above the $62 million target. Unlike the current escrow system, through
which 8 percent of players' salaries is withheld and paid back if
negotiated salaries fall short of 57 percent of revenues, Stern said
owners would keep the escrow under the new system - making this, in
effect, an 8 percent pay cut for the players in Year One.

In
terms of the owners' initial proposal of a $45 million hard cap, the
latest offer from the league amounts to a $650 million move from their
initial position. The basic structure of a 50-50 split of revenues -
based on a modified formula with about $900 million in expenses deducted
before sharing with the players - remains intact.

What you should read in this proposal is the following:

1: Average team salary around 62 million

2: Exceptions to go above that amount will remain in place.

3: One of those exceptions is the Larry Bird exception.

4: There will be some limits on the amount of exceptions used.

In 2013/14 is the worst year for Chicago.  The Bulls presently have 40.6 million on the books for Deng, Boozer, and Noah.   Figure Derrick Rose will be on a new max contract, whatever that is, and he'll be in year 2 of it.   Let's call that 13.5 million as a guess.

Bulls are now at 54 for four guys.  

Omer and Taj are probably each in the 5-8 million dollar range, we'll say the Bulls probably only keep one of them at 7 million and let the other walk.

61 million for 5 players.

If they keep both their draft picks, they'll have about 4 million committed to those players in year 3.

65 million for 7 players

How much room before the exceptions run out will the Bulls have to fill the roster?    10 million more maybe?   15?   If they place limits on exceptions, I think 80 million has to be the max they can go, and 75 million is more likely.  

That means you've got 10-15 million to fill out the remaining 6 players on the roster (assuming the minimum of 13 rule remains intact).   Figure you get two more late 1st rounders over the next couple years giving you two more guys at two million, and three guys stick at the vet minimum or league minimum as second rounders which gives you two more guys at a total of 2 million.

You're now at 69 million for 12 guys.   

That gives you 69 million to the new league hard cap to spend on one additional player.    Can you fit in a Ben Gordon or Andre Iguodala into that space?   Not likely as they'll be around 13 million and 16 million respectively.

Now things could get better or worse from this agreement, and if you get an amnesty clause you can dump Boozer.   However, dumping Boozer means you probably keep Asik which adds 8 million and you're still pushing your limits by trying to fit in another major player.

The 'flex' cap which allows some flexibility but puts on some ceiling of how much teams can pay will not hurt the Bulls from keeping the guys they have, but it will stop them from adding any more major salary.

I think the proposal as written here is a pretty fair one from the owners.  I doubt the players are going to ultimately see much better, and it looks like some limit of how many exceptions you can use seems likely.  As such, many of the trade scenarios we've been plotting, Iguodala in particular, may not be viable.

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  • This is the best deal the players are going to get. If they get greedy, the owners might get pissed and pull that offer off the table. Billy Hunter better wake up and accept this proposal. Also, the Bulls are in no position to cut Boozer in order to keep Taj and/or Asik. Lets not forget, Boozer is the ONLY player we have that can score in the post. Vince Carter for a modest price after his buyout seems like a GREAT deal for the Bulls if this proposal is implemented.

  • In reply to sukid09:

    Hard to say without knowing the specifics.

    2B a year is a loss of 300 million this season, and if there aren't considerable increases as revenue increases then it could be a massive, massive loss down the line in 10 years.

    Of course, maybe the 2 B a year reflects raises similar to that of raises in BRI as well, it's hard to say.

    Either way, it was a step forward by the owners, but I wouldn't get too comfortable saying it'sa huge step forward. The owners initial proposal was such utter rubbish and unrealistic that coming to deal with a somewhat realistic proposal doesn't mean it's the best ever.

    That would be like if the players started off saying "we want an increase in raises to get 75% of BRI" then 2 years later said "okay, we'll come down to 57% see how reasonable we are?".

  • In reply to sukid09:

    Imagine the work the Lakers have to do with Kobe's massive extension:

    Kobe - $30,453,000
    Pau - $19,285,850
    Artest - $7,727,280
    Steve Blake - $4,000,000
    ========================
    Total - $61,466,130 <-- current commitment in 2013-14

  • In reply to jamatokwu:

    That's the Lakers' current commitment for 2013-14.

  • In reply to jamatokwu:

    and they obviously plan on either resigning Bynum or trading him for some other high salary type player.

  • In reply to jamatokwu:

    Regarding Iggy and BG, with four 8-figure salaries and a new CBA, Bulls were never going to add yet another overpaid non-allstar, nor should they. The strategy Bulls have in place is using non-guaranteed contracts (Pargo/Lucas/Bogans, Watson/Korver/Brewer) to trade with a team needing to shed salary due to the new CBA. Bulls developed this plan prior to 2010 free agency and will give it a year to work.

    Bulls will take a financially conservative route to adding additional talent. Another example is draft picks 28 and 30 which have very low salaries for 4 years.

    Very few teams extended their players this season, preferring to wait until the new CBA was signed so they would have a better idea about salaries. There were exceptions of course for a franchise type all-star like Kevin Durant and a few others. Should Bulls have waited for the new CBA to extend Noah? He may begin looking overpaid unless he miraculously develops a new shot and an offensive game at age 27-28.

    There will be far fewer 8-figure salaries for non-allstars going forward. Hopefully, contract lengths will be shorter, and the minimum age will increase to 20 as well.

  • In reply to jamatokwu:

    All just speculation, but if there's going to be a limit on exceptions wouldn't it make sense to load up on salary before the new CBA takes those exceptions away? Surely it's a huge competitive advantage to have a huge payroll when in the future other teams wont have the means to add on big contracts.

  • In reply to DontLetsStart:

    Depends on how they manage it, but yes, it could work out that way.

  • In reply to jamatokwu:

    damn dude think about Bynum.

  • In reply to sukid09:

    I think its a little early to say this is the best deal the players are going to get. This is going to be a negotiation, it would be poor execution if the owner's first offer was the lowest they plan to go.

  • In reply to jgingeri:

    I doubt it's the absolute best the players can get, but I wouldn't be surprised if it's fairly close.

    Of course, the devil is in the details, and it depends how that 2B moves with the revenue of the league. If the percentage of BRI stays at close to 50/50, I suspect the players might be able to get that up to say 52% or so, but it won't be far off that amount.

  • In reply to DougThonus:

    I don't see the owners budging much on the 2B, but as you mention.. details, the players will still try to poke as many holes in the proposed soft/hard cap. The players will look to maximize exceptions/loopholes in an attempt to still allow big spending teams to go over the cap. Its the only area that they can squeeze extra salary out. The shortened contracts, lowered maximums, and soft cap number aren't going anywhere. As we know they already got the owners to take non-guaranteed contract off the table, but the players don't view that as a bargaining chip since its something they already had.

  • In reply to sukid09:

    Heck ya, give me Vince Carter on a min deal to play in Chicago. We will find our future SG within the next couple years. Im pretty sure Watson,Bogans,Brewer,Korver all come off the books pretty soon. Bulls are ready to contend right now....Vince could help us make that jump possibly.

  • I don't understand that MLE or the cap will come to 55 mil or something near that. How many teams other than T-Wolves, Cavs or Clippers, Raptors, Kings have those big exceptions to sign FA to big 10 mil contracts for multiple players like Jason Richardson, Jamal Crawford? I think after all this is settled the Bulls should get a decent SG in FA at MLE.

  • In reply to schaumburgfan:

    I meant the speculation about the MLE going away.

  • In reply to schaumburgfan:

    make sure you ready this from Friedell, doesn't sound like GAR is looking to make any draft day moves. '

    http://sports.espn.go.com/chicago/nba/news/story?id=6688222

  • In reply to schaumburgfan:

    +2 exactly....im thinking free agency too

  • In reply to schaumburgfan:

    Couple of guys on draft night that could help us on the court and financially....

    Jeremy Tyler- I believe he will stay overseas for a year or 2. It would help not having him on the books, plus we would be grooming him at the same time.

    Nikola Mirotic- 6'10 stretch 4, parts of his game remind me of Toni Kukuc/poormans Dirk. Scouts have said he has lottery potential, but he wont be able to come over until like 2013 or 2014. Really like this guy though.

  • In reply to schaumburgfan:

    54 mil committed to Rose, Deng, Boozer, Noah...ugh not a championship core at all. Boozer's contract is gonna kill us, we need to trade him to Orlando for JJ Reddick and Brandon Bass.

  • In reply to schaumburgfan:

    So we say no to Iguodala and Gordon, but might say yes to Jackson or Hamilton + pick.

    Expirings/ungaranteed contracts for Hamilton + 8th pick (Brooks or PG/SG playmaker) is my favorite scenario. Hamilton is still a solid player and we get a good rookie on a cheap contract for 4 years.

  • In reply to schaumburgfan:

    I think we should take 2 Euro's to stash, we're gonna need these picks to provide us cap flexibilty and depth down the road, we can sign vets to the minimum for depth now (J. Kapono, K. Thomas), especially if we are talking about using Bogans, Lucas, Pargo, Brewer, Korver and Watson expirings' for trades. I think we should guarantee the 1st 3 (Bog, Luc and Par) for next season in order to use them as expirings. We should also find a way to trade for a guy making about $2.9M dollars who is going to expire after next season to save a team from the luxury tax this season. Maybe we could pick up a late 1st in the process or a 1st for next year. We can't let that cap space go to waste. That would give us $20M in expirings to deal and from the sound of things, the cap isn't going to change too much. Wish we could amnesty Boozer as well.

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