Spurs Offseason: How they can sign LaMarcus Aldridge and keep their core in place

Almost lost in all the excitement of the NBA finals and the draft is the fact that NBA teams can start negotiating with free agents beginning on Wednesday. The usual build up for free agency seems to have been dampened with so many of the top free agents expected to return to their respective teams. We have seen nowhere near the frenzy of say, last year, when LeBron James and Carmelo Anthony were getting ready to hear recruitment pitches from teams around the league.1 There is, however, one top free agent that is likely to change alliances: Portland Trail Blazers power forward LaMarcus Aldridge. Although Aldridge was thought to be a Blazer’s lifer as recently as the 2015 All-Star Break, it now seems almost certain that he will flee town.2 Recent reports have linked the free agent power forward to the San Antonio Spurs, mentioning the Alamo City as one of his top two destinations along with Los Angeles. However, as NBA insider Marc Stein mentions in his report, the Spurs will have to get creative in maneuvering the cap so that they can offer Aldridge a max deal while keeping most of their existing core in place. Ideally, the Spurs can sign Aldridge while also bringing back Kawhi Leonard, Tim Duncan, Manu Ginobili, and even Danny Green, who are all free agents. Doing so will be difficult but by no means impossible. Here’s how the Spurs clear the space to bring in Tim Duncan’s running mate in the post in 2015-16 and his eventual long-term replacement down low, which will keep the Spurs in the running for a championship next year and set them up for continued long term success.

Taking a look at the San Antonio’s salary cap structure as it stands, it would be reasonable to figure they have plenty of room to bring in the former Trail Blazers star. They have a mere $33 million in salary obligations for the upcoming year, which is about $34 million under the projected salary cap of $67.1 million.3 So, intuitively they have more than enough space to fit Aldridge at a maximum salary beginning at about $18.9 million. However, because of the league’s rules with salary cap holds it isn’t quite that simple.

San Antonio has 9 free agents this summer, and each and every one of them carries a salary cap charge in the offseason. The result is that even though it appears the Spurs have $34 million seemingly freed up for offseason moves, in actuality that room is filled by a cap holds on every Spurs free agent, which reflect the respective players’ salaries from the previous year.4 For instance, until Marco Belinelli signs a new contract or the Spurs “renounce” Early Bird rights on him, he will count $3.7 million (in this case 130% of his previous salary – but it varies) toward San Antonio’s salary cap in this offseason. This number is his cap hold.

The league does this to close a loophole. Otherwise, teams would be able to sign other teams’ free agents using cap room, and then bring back their own free agents using Bird rights. For example, had cap holds not been a rule, the Miami Heat would have entered the offseason last summer with just over $8 million in cap commitments. Thus, they could have gone out and signed Carmelo Anthony, Kyle Lowry, and Pau Gasol, so long as their combined salaries added up $50 million or less (which they did). Then the Heat could have re-signed Lebron James, Dwyane Wade, and Chris Bosh to maximum contracts using Bird rights to exceed the salary cap. What a world that would be! So while it may seem odd, there is a good reason cap holds exist. However, for the Spurs, it will make signing Aldridge a bit more complicated.

Cap Holds

As you can see, the Spurs are well over the salary cap with the holds for their free agents still on the books. The first step to getting Aldridge is doing what’s called “renouncing” rights to many of their free agents. By doing so, the team will no longer have the right to exceed the salary cap to resign them, but the respective holds for each player they renounce will disappear from the salary cap sheet. So by renouncing Belinelli, Aron Baynes, Cory Joseph, Jeff Ayres, and Matt Bonner, San Antonio can purge their respective cap holds from the cap sheet. Doing so brings the Spurs salary down to about $77 million. Although not nearly enough, it’s a start.

The Spurs must be strategic with the free agents they want to keep. There’s no doubt that the team will bring back star small forward Kawhi Leonard on a maximum contract, which will carry with it a starting salary of about $15.8 million.5 However, because this starting salary is much greater than his cap charge of $7.2 million, the Spurs must leave his cap hold on the books until after signing Aldridge. After which they can then use the Bird rights they retained by keeping his hold on the books to go over the cap to re-sign him. Furthemore, if the Spurs wish to retain Danny Green, the same procedure will be used with him because his expected raise to over $10 million a year will exceed his cap hold of $7.6 million. Coming to deals with these players but agreeing to finalize them after bringing Aldridge into the fold will preserve valuable cap space.

The next step in San Antonio’s grand scheme for Aldridge would be to re-sign Tim Duncan and Manu Ginobili for less than their cap holds. Last year, the salaries for Duncan and Ginobili were $10 million and $7.5 million respectively, which balloon as cap holds to the amount of 150% of their previous salaries on the Spurs offseason salary sheet. Let’s say they each take salary cuts for the sake of a chance at one more title, and the Spurs sign them for about 75% of their salaries from last year. This move would knock off a further $13 million from the Spurs cap sheet.

The next and most difficult move the Spurs must make in order to clear the necessary cap space is to move players under contract via trade. While it depends on how much Tim Duncan and Manu Ginobili come back for, it appears the Spurs will have to move at the very least Tiago Splitter and Boris Diaw and take back very little salary in return to clear the necessary cap room. It’s a difficult pill to swallow given both were vital cogs to their 2013-14 championship team, but without shedding the combined $15.5 million on their contracts, the team will be hard pressed to clear enough cap space to get Aldridge without convincing Duncan and Ginobili to take significant pay cuts or letting Green walk in free agency.6

One possible destination for Diaw is the Houston Rockets, who have a trade exception large enough to take on his contract. Of course, they will want an asset attached to him to make the deal worth their while. The Spurs could dangle some combination of second round picks and/or one of players they have drafted-and-stashed over the years. Splitter is a better player than Diaw so trading him won’t resemble a salary dump as much as getting rid of the aging yet still somewhat valuable Frenchmen. However, it will still require some creativity. Diaw’s deal is essentially only guaranteed this season while Splitter is under contract through 2016-17. Although he is a productive big on a reasonable contract, the team trading for him would have to sacrifice potential cap space in the expected free agency bonanza of 2016, a definite trade-off. While it will be interesting to see what type of the deals the Spurs can swing, both players are tradeable. Once San Antonio finds takers, they will be very close to being able to sign Aldridge to the max.7

The final step is also the easiest. The Spurs must come to an agreement with 2015 first round pick Nikola Milutinov that states that he will not be coming to the NBA this year. Until then, $991,600, the rookie scale number for the 26th overall pick (where the Spurs drafted him) is applied to the 2015-16 Spurs salary cap calculation.8 Once the agreement is completed, the cap charge will be removed, and Milutinov will continue to develop overseas. With all this complete, the Spurs will have the room to go out and sign Aldridge.

In my hypothetical situation, the Spurs traded Diaw and Splitter without giving up any of the other players on the roster. However, since it’s unlikely the Spurs receive absolutely no money in return for both Splitter and Diaw, below I map an example where the Spurs traded away Splitter or Diaw to the Utah Jazz and had to take on the $250,000 of guaranteed money still owed to Trevor Booker.9 Again, this situation is purely an illustration. If the Spurs can work out deals that return absolutely no guaranteed salary, more power to them. It’s just less realistic. Additionally, Mills and Anderson were retained to maintain some semblance of depth. Duncan and Ginobili also ended up having to sign for about 72% of their respective salaries from a year ago, a real sacrifice but one that might just be worth for two stars who have made a significant amount of money in their careers and would want the best shot at another title. Below is the cap sheet.10

Final Salary Structure

Alternatively, the Spurs could trade one or both of Mills and Anderson, which would give the front office greater flexibility but would leave the team bereft of role players to come off the bench (a real consideration considering Mills’s past contributions and Anderson’s youth). They could also convince Aldridge to take slightly less than the max for the opportunity to play for Gregg Popovich, this transcendent, albeit aged, team, and the fantastic Spurs organization. However, this upcoming contract is most likely going to be Aldridge’s biggest payday, so while I could see him taking slightly less than the max if it meant they Spurs could retain Duncan and Ginobili, it’s not as if San Antonio will get much of a discount, if they get one at all.

Moving Forward

If this hypothetical plays out, the Spurs will insert Aldridge into an already superb starting lineup with Parker, Green, Leonard, and Duncan. They will also have proven veterans Ginobili and Mills to bring off the bench. Further, the hope is that in his second year Anderson develops to the point where he can be a productive member of the rotation and can play in small ball lineups with him and Leonard at the forward spots. The Spurs will need to acquire a solid backup big using some part or all of the $2.8 million Room Exception. Filling out the remaining roster spots will have to come using the Minimum Exception with which it is difficult but not impossible to bring useful players into the fold. Going forward, the Spurs will have to cope with a thinned out roster but could make up for it with shrewd signings once Aldridge is on board. They could have one of the better rosters in the league in 2015-16 and have the core of Leonard, Aldridge, and Green to build around in the future.

Creating the perfect conditions to sign Aldridge will require careful premeditation. There are risks associated with it, not the least of which is messing with team chemistry by trading away Splitter and/or Diaw, who were significant contributors to the 2013-14 title team and have each been with the Spurs for more than 3 seasons. However, Aldridge is a bonafide superstar, and the benefits of taking on his hefty new salary are too large to ignore. If the Spurs take these steps, they’ll be able to make a legitimate run at signing Aldridge, and consequently, have the opportunity to greatly improve the chances of a final title in the Tim Duncan era.

***

1. Speaking of Lebron, although he did opt-out of his contract with the Cavaliers on Sunday, the move was strictly a financial decision and he will definitely be staying in Cleveland.

2. A truly unfortunate situation for fans of good basketball. Portland’s starting lineup a year ago was a joy watch and one of the most productive units in the league.

3. I have assumed the cap to be $67.1 million in this article. I have yet to come across a definitive cap number so this projection will have to do:
“New salary cap projections sent out to NBA teams: 2015-16: 67.1 million, tax 81.6, 2016-2017: 89 million, tax 108. 2017-18: 108, 127 Tax” – Jonathon Givony (@DraftExpress) April 17, 2015 

4. The Bird exception, or Bird rights, allow a team to exceed the salary cap to re-sign a player. For full Bird rights a player must be on the same team for at least 3 consecutive years. Weaker versions of Bird rights exist or players who’ve been with the same team for 2 consecutive years, called Early Bird rights, and for veterans who’ve been on the same team for one year, called Non-Bird rights. For more, see http://www.cbafaq.com/salarycap.htm#Q25

5. It is unknown Leonard wants to sign long term or desires a short term deal in the mold of a contract of 2 years plus a player option for the 3rd that Jimmy Butler has been rumored to covet. He will likely want to reach his second free agency sooner rather than later so a 3 year contract could make sense.

6. If Ginobili and Duncan take MASSIVE pay cuts then the Spurs might be able to keep one of Splitter and Diaw. But if they don’t, the decision between Green and Splitter is one that the Spurs have to mull over. There are three reasons I chose to keep Green in this scenario: his cap hold is about $1 million less than Splitter’s contract (important because every cent of room is precious and hard to come by), Green is two years younger than Splitter, and finally Green provided much more value than Splitter did a year ago.

7. Dealing 2014 first round draft pick Kyle Anderson would surely get the job done and could be attached to Diaw to make the deal more desirable for other teams, but doing so might not be in San Antonio’s best interests.

8. Rookie scale number found via RealGM.com http://basketball.realgm.com/nba/info/rookie_scale/2016

9. Utah makes sense as a possible destination because of their abundance of unguaranteed or partially guaranteed contracts and possession of a decent amount of cap space.

10. Minimum salary placeholders must be necessarily included to get the roster to 13 players. A rule in the CBA that causes empty roster spaces to eat a bit of cap space.

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