Expiring Contracts Are Overrated
Old 08-19-2009, 04:20 PM   #1 (permalink)
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I've been noticing something around here, some people are overrating expiring contracts.

Expiring contracts have two great uses in terms of building a team. The first being it can give a team relief so that it can then take the money and sign another player who fits their system. The second thing is that an expiring contract can be used as trade bait. Typically a team doesn't give away a good player for an expiring contract unless its a contract amount of substantial size and even then a good player is not necessarily attainable.

If a team is capped out an expiring contract has its benefits as well. It can help relieve luxury tax burden. For a small market team without a great revenue stream this is of great value. For a big market team making a killing, luxury tax is something to be avoided but its not something to be feared.

How does this apply to the Raptors? The Raptors will have cap space this off-season. Beyond that point they won't for some time... In fact chances are beyond next summer they won't have cap space for four or five seasons. So, in the Raptors case an expiring contract doesn't have much value to them over the next four years beyond the summer of 2010. They have always tried to avoid paying luxury taxes. The only time they've justified entering that territory was the summer after their semi-conference game seven defeat; a point where optimism was high and a sense that great success was just around the corner. The Raptors may be entering that frame of mind again within the next few seasons.

I feel expiring contracts in most cases are overrated. What are your thoughts?
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Old 08-19-2009, 04:22 PM   #2 (permalink)
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Originally Posted by Apollo View Post
I've been noticing something around here, some people are overrating expiring contracts.

Expiring contracts have two great uses in terms of building a team. The first being it can give a team relief so that it can then take the money and sign another player who fits their system. The second thing is that an expiring contract can be used as trade bait. Typically a team doesn't give away a good player for an expiring contract unless its a contract amount of substantial size and even then a good player is not necessarily attainable.

If a team is capped out an expiring contract has its benefits as well. It can help relieve luxury tax burden. For a small market team without a great revenue stream this is of great value. For a big market team making a killing, luxury tax is something to be avoided but its not something to be feared.

How does this apply to the Raptors? The Raptors will have cap space this off-season. Beyond that point they won't for some time... In fact chances are beyond next summer they won't have cap space for four or five seasons. So, in the Raptors case an expiring contract doesn't have much value to them over the next four years beyond the summer of 2010. They have always tried to avoid paying luxury taxes. The only time they've justified entering that territory was the summer after their semi-conference game seven defeat; a point where optimism was high and a sense that great success was just around the corner. The Raptors may be entering that frame of mind again within the next few seasons.

I feel expiring contracts in most cases are overrated. What are your thoughts?
I completely agree. The only time expiring contracts are good is when a player like Marcus Banks has one.
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Old 08-19-2009, 04:50 PM   #3 (permalink)
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sometimes they're valuable, sometimes they're not.

you say this:

Quote:
They have always tried to avoid paying luxury taxes.
but you don't include it in your 2 part list of great uses for expiring contracts. i don't understand the omission. it's not really good enough to suggest that it's not my money. the point is that mlse does not want to pay tax and has no intention to do so unless the team is very successful. if they are successful in the next few years then fine, but if they are not, which is a real possibiility, then a $4 mil/yr 12th man is a major ball and chain. on the other hand, an expiring banks in 2011 is a no risk situation since he's not going to be a cancer to the team if he never dresses or travels with them.

in the raps siutuation, and expiring contract to avoid the lux tax is a lot more valuable than a $4 mil 12th man that will only play if we suffer at least 2-3 injuries at the wing spots.
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Old 08-19-2009, 06:47 PM   #4 (permalink)
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sometimes they're valuable, sometimes they're not.

you say this:



but you don't include it in your 2 part list of great uses for expiring contracts. i don't understand the omission. it's not really good enough to suggest that it's not my money. the point is that mlse does not want to pay tax and has no intention to do so unless the team is very successful. if they are successful in the next few years then fine, but if they are not, which is a real possibiility, then a $4 mil/yr 12th man is a major ball and chain. on the other hand, an expiring banks in 2011 is a no risk situation since he's not going to be a cancer to the team if he never dresses or travels with them.

in the raps siutuation, and expiring contract to avoid the lux tax is a lot more valuable than a $4 mil 12th man that will only play if we suffer at least 2-3 injuries at the wing spots.
At the end of the day clubs pay to win and taking chances is a part of that. A guy like Marcus Banks is worthless to the on court product. A guy like Matt Carroll can come in handy on off nights or if injuries run deep or if some of these young guys stumble and/or fall. A guy like Matt Carroll is a minor risk. In the summer of 2012 he will only have two years left on his contract, $3.9M and a player option of $3.5M. That is a contract that is much more movable, if need be, than a Marcus Banks type contract. Matt Carroll can play. Who's to say Colangelo will have the the team in the position where a $4M overpriced contract will have tax implications? This is very far away.
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Old 08-19-2009, 06:50 PM   #5 (permalink)
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but matt carroll won't play - we have 7 or so guys who can play his position already - and his movable contract needs to be compared to banks' non-contract, which is what it will be in the summer of 2011 and 2012.
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Old 08-19-2009, 06:51 PM   #6 (permalink)
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but matt carroll won't play - we have 7 or so guys who can play his position already - and his movable contract needs to be compared to banks' non-contract, which is what it will be in the summer of 2011 and 2012.
Though Carroll may get 5 minutes the whole season, he'll be better in those five minutes than Marcus Banks could be.
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Old 08-19-2009, 06:53 PM   #7 (permalink)
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Exactly, and teams can get hampered by injuries to the point where the 11th or 12th man in the regular rotation may find himself playing 10 or 20 minutes or maybe more...Teams need depth. A prime example of this is the Spurs last season. They could have missed the playoffs had it not been for their insane depth.
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Old 08-19-2009, 07:03 PM   #8 (permalink)
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I'm just waiting for 2011 the summer of Marcus Banks.
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Old 08-19-2009, 07:05 PM   #9 (permalink)
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you have to be kidding me. 5 minutes a month, max, is worth almost $4 mil per year when we will be flirting with the luxury tax? i can't believe you would really think that...
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Old 08-19-2009, 07:07 PM   #10 (permalink)
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you have to be kidding me. 5 minutes a month, max, is worth almost $4 mil per year when we will be flirting with the luxury tax? i can't believe you would really think that...
He'll be our twelfth man and we'd be 12 men deep. On any other team he'd get 5-10 minutes a game. Although with this talent, Triano could create multiple 9-10 man rotations depending on our opponents' strengths and weaknesses.
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Old 08-19-2009, 07:08 PM   #11 (permalink)
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it's very misleading to say that caroll will cost 4 million. He will cost nothing the first 2 years (when it counts, if you're in the keep Bosh camp), and MIGHT cost 4 if he doesn't get traded after 2011.

2009 and 2010, we don't spend a cent more.
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Old 08-19-2009, 07:33 PM   #12 (permalink)
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it's very misleading to say that caroll will cost 4 million. He will cost nothing the first 2 years (when it counts, if you're in the keep Bosh camp), and MIGHT cost 4 if he doesn't get traded after 2011.

2009 and 2010, we don't spend a cent more.
moremilk is on the money - 'trane it doesn't "cost" us $4m the next couple of years.
Banks will make $4,847,586 in 2010/11 - a very critical year. The cap will likely come down AND we will look to re-sign Bosh. A straight up trade nets us (Carroll will be paid $4,300,000 that year). $550,000 sounds small, but every bit will help if the cap falls. Plus, as per my comments on another thread, this is also why Amir's contract is key (expires after this coming year) and we effectively save on Ukic's $1.45M in 2010/11 as well.

So we have $2m more in cushion in the last few days (IF this new trade goes down). Many are assuming Basketball Related Income will rise again post the recession - and thus the cap rises again - while Carroll's contract continues to fall. If the BRI continues to fall, then a TON of teams are in a world a hurt and the CBA will have to be adjusted.

Having said all that I think we should get some sort of "kicker" to the deal - 2nd round pick and cash perhaps would do.
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Old 08-19-2009, 07:49 PM   #13 (permalink)
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but matt carroll won't play - we have 7 or so guys who can play his position already - and his movable contract needs to be compared to banks' non-contract, which is what it will be in the summer of 2011 and 2012.
7 is a stretch.

Turk, Wright, Derozan, Belli, Weems, Douby, Jack

Derozan is a rookie with no outside shot and needs work on his handles.
Belli is a borderline starter-should come off bench(I still love him though)
Wright hasnt ever really done much-benchy at best.
Douby cannot play the 2
Jack can but really shouldnt(except in only late game situations)

There is definately room for Carroll on the wing.
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Old 08-19-2009, 08:19 PM   #14 (permalink)
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moremilk is on the money - 'trane it doesn't "cost" us $4m the next couple of years.
Banks will make $4,847,586 in 2010/11 - a very critical year. The cap will likely come down AND we will look to re-sign Bosh. A straight up trade nets us (Carroll will be paid $4,300,000 that year). $550,000 sounds small, but every bit will help if the cap falls. Plus, as per my comments on another thread, this is also why Amir's contract is key (expires after this coming year) and we effectively save on Ukic's $1.45M in 2010/11 as well.

So we have $2m more in cushion in the last few days (IF this new trade goes down). Many are assuming Basketball Related Income will rise again post the recession - and thus the cap rises again - while Carroll's contract continues to fall. If the BRI continues to fall, then a TON of teams are in a world a hurt and the CBA will have to be adjusted.

Having said all that I think we should get some sort of "kicker" to the deal - 2nd round pick and cash perhaps would do.
there is a chance that in 2011/20912 BRI could net a MASSIVE jump. The current drop is purely because businesses are afraid to spend (partly because of public opinion). If the economy recovers, nobody will care anymore, and all the lost revenue could return in one season (2010/2011). Of course, it's also possible that things stay put or decline even worse.
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Old 08-19-2009, 08:33 PM   #15 (permalink)
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there is a chance that in 2011/20912 BRI could net a MASSIVE jump. The current drop is purely because businesses are afraid to spend (partly because of public opinion). If the economy recovers, nobody will care anymore, and all the lost revenue could return in one season (2010/2011). Of course, it's also possible that things stay put or decline even worse.
so in a time of uncertainty, why are we committing almost completely unnecessary salary in the longer term?
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Old 08-19-2009, 08:36 PM   #16 (permalink)
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Because Carrol probably won't be here long term so why worry about it?
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Old 08-19-2009, 08:39 PM   #17 (permalink)
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thats hardly a sure thing lwp...
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Old 08-19-2009, 08:39 PM   #18 (permalink)
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If Carrol doesn't work out, Colangelo will trade him like George.
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Old 08-19-2009, 08:55 PM   #19 (permalink)
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thats hardly a sure thing lwp...
Care to put some money on that trane?
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Old 08-19-2009, 08:57 PM   #20 (permalink)
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HOw about the trade actually happens then you put some money on that. That would make some more sense
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