Great Read Regarding the NBA During This Recession
Old 03-16-2009, 02:26 PM   #1 (permalink)
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Default Great Read Regarding the NBA During This Recession

This is courtesy of Sham for some of you that remember him from ESPN & EBS. More pertaining to his Bulls, but also discusses how today's state is affecting other teams around the league too.

Take a couple minutes to read. It's worth it.

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Originally Posted by Sham
The cap is coming down. Everyone is broke. Almost everyone wants - nay, needs - to dump salary. But no one can, because they can't find anyone to take it on.

Washington are stuck for a lot of tax dollars next year. So are New Orleans. So are the old reliables - Denver, New York, Cleveland, L.A. Lakers, Boston, Dallas. The Pacers are pissing money, the Grizzlies have never had any, the Clippers regret every penny that they just spent, and many teams out there (amongst them Orlando, Toronto, Phoenix, us) are hamstrung by owner's stout refusals to pay the luxury tax.

There are craploads of dead salaries out there. Some huge, some big, some medium, some comparably little. Every single team has a contract that they want (need to) shift for a small one, and almost every team has several of them. Us included. The teams all want to sell them, to shift them, to replace their cap numbers with players who justify their salary more. But no one has any means with which to sell them. The deadline was a washout, because 28 teams tried to sell to 0 buyers. Even the premier supposed buyer - Portland - didn't buy anything; indeed, their only move saw them cut salary instead of gain it. As a result, there are a lot of teams on the hook for a lot of money that they can't afford, and a painfully thin market for what few choice nuggets there are in this year's free agency.

The Bulls are no different. I take a look at the Bulls salary structure, and I see a desperate need to shift some money immediately. Somehow, with what might amount to scant more than $4 million in wiggle room, we need to re-sign our best player, make two draft picks, and fill the very end of the bench with some meaningless pap. And it's not going to happen. We're not going to be able to dump salary. The incredibly few teams with relieving facilities (giggidy) aren't going to want to take on Tim Thomas with it, even if we do ask them really nicely and give them Horny Noonbreast as a sweet sweet incentive. And we're not going to get Jerry Stackhouse's big unguaranteed salary, either. The few teams able to facilitate salary relief are going to be spoilt for choice with what they do with it, and the Bulls won't (or shouldn't) win any bidding war for it. Someone will sell harder than they will.

And that's why they need to be buying. They need to open the taps. They need to be aggressive in a pathetic market. Put simply, they need to pay the tax.

It need only be for one year. In the summer of 2010, the combined dead salaries of Changeup, Tits and Snacks are out of here. Suddenly, we are awash with the one thing that we currently don't have - flexibility. As of right now, the Bulls are in a much-envied position. They have money. They can afford to do things. But they just won't. And so they waste golden opportunities.

But this offseason represents more golden opportunities than we've ever seen before. No one wants to buy anything. Everyone wants to sell. And if the Bulls open the checkbook, they can buy big. I'll give you some examples of the kind of thing that I mean;


1: New Orleans may well sell their first rounder this season. They did last year, and this year, they're in far worse of a salary situation than they were last year. So buy the bastard thing and give yourself the gift of assets. The best a man can get.

2: Move up in the draft. It's not a strong draft outside of #1, but, as with all drafts, it's stronger near the top. Flex your muscle, offer up cash, use the Spurs pick, buy another one and hand it on....and move on up. In theory, while giving up no players of your own, you get another good one.

3: Marcin Gortat is great, and the Magic know it too. If Marcin Gortat joins this team, he is instantly the best big man that we have. I'm not kidding, either - the boy is a fine two way player, and we currently have no two way big men. But due to the effing mental Lewis contract, and the entirely unnecessary Pietrus one, Orlando can't afford to keep him. They're rimjobbing the tax as it is, and they have to re-sign an inevitably-going-to-want-to-get-paid Turkoglu first. Spending big on their backup centre can't be a priority right now. So give him a 4 year, $15 million deal, frontload it a bit, and he's ours. It's a good player that is available on the cheap. We have to buy things like this.

4: If you want Phoenix to give up Amare Stoudamire, take Jason Richardson off their hands too, and make the trade big enough to get them under the tax without having to do something stupid like waiving Steve Nash, and suddenly they'll be all over you. Same with Toronto - they've bought themselves some wiggle room and aren't tax desperate, but if they decide to trade Chris Bosh, they'll think a lot more highly of any bid that sees them also be able to move Kapono, Banks, or both. It's mutual backscratching.

5: You could then re-sign Gordon. Obviously.

6: The BAE comes into play. Those things aren't exactly awesome, but you coudl get 9th men with them. Someone like Pargo, Walter Herrmann, or some other halfway decent 9th/10th man.

7: "Why yes, Mr Ernie Grunfeld of the oh-jizz-we're-about-$7-million-over-the-tax-next-year Washington Wizards, we can certainly take the frankly hopeless Stewie Griffin off your hands using the Thabo Sefolosha trade exception. Just give us your second rounder first.....". Stuff like that. Or Orlando with Anthony Johnson. Whichever. We can take back someone's salary and get an asset for doing so. Memphis got a high second in this way earlier this season for Steve Francis. Minnesota got a first for it earlier this summer by taking on Carney and Booth from Philly. That sort of thing. As with point 4, you'll get assets for taking on other people's crap. It's become standard practice.

8: Suppose you go the Gortat route. You've still got a BAE-sized chunk of the mid-level left over. That's another piece that you can add. Or supposing you don't go that route, and want to give a full MLE to someone. There are candidates out there. And not many other people are going to be flashing a full MLE this year.

9: Even if they aren't involved in a mahoosive deal, the millions of expiring offered up by Changeup Titsnacks can be used to acquire good players. Jason Collins just got Mike Miller, for example. Drew Gooden just got John Salmons. Etc.

10: Devin Brown.

In my eyes, I am envisioning a scenario where the Bulls make a big trade for the much sought after superstar, bring back Gordon, and spend to fill out the bench. They can find the young talent (Balkman, Maxiell, even Childress and David Lee, whoever) and the old veterans (Andersen, Herrmann, Sheed, Parker, whomever) to round out the roster against an improved core of talent. If the Bulls are willing to spend, they have the option to acquire basically anybody, be it via trade, the draft or free agency. They can identify who on their team they want to keep, who they need in their core, who they need to compliment those guys, and buy everyone accordingly. It's possibly the biggest seller's market there's ever been. Let's not be sellers too.

Reinsdorf has said that the Bulls will pay the tax for a winner. We are somewhat obligated to believe him, because the Bulls haven't won anything to be able to test that resolve. But it's been proven that they won't pay it for anything less than a winner, and that's what we are right now - a long way short of being a winner. However, if they do pay it, just for the one year, they can get themselves to being a hell of a lot closer to being the winner. If they flash the cash, they can own the market, and choose as they please. With a good offseason here, the Bulls can be a 50 win team and a contender next year, not necessarily by using those exact moves depicted above (obviously), but by giving themselves so many new ways to better the team. They have a BAE, an MLE, a TPE, and they're going to go unused if the Bulls are unwilling to spend. They have options and assets (two words which you're probably used to hearing me talk about by now, and by God you're going to hear them a lot more yet), and they can't afford to waste them just because they might not make an 8 figure profit next year. We wasted them last year, and guess what? We're still mediocre. But if they spend, they can get out of mediocrity, and actually start getting somewhere.

They won't, though.
Source - ShamSports.com: The world's ugliest NBA website
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Old 03-16-2009, 02:38 PM   #2 (permalink)
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Well, he's absolutely right about being aggressive when other teams can't afford to. This is how a lot of businesses get rolling, too.
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Old 03-16-2009, 02:46 PM   #3 (permalink)
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This is why having capspace this summer is good, for reasons that far surpass going after a big FA. We can now save a ton of team's asses in terms of the lux tax.
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Old 03-16-2009, 03:17 PM   #4 (permalink)
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Very well written article. If I was the Bulls I'd be looking to load up in the frontcourt this offseason. Try and get Boozer from Utah, give up Tyrus if you have to, then try and sign Sheed in free agency.

Then like he said, go after some of the nice vet role players to fill out the bench, and maybe trade Hinrich if you can get something good back, and you have one of the most talented rosters in the NBA.

They already have a glut of VERY good role players like Miller, Salmons, Hinrich, Tyrus and Noah. They need to get a big like Boozer to play pick and roll with Rose, and getting a guy like Sheed would solidify the frontcourt and make their defence 10x better.

Imagine a Rose, Gordon, Deng, Boozer Sheed starting 5, thats one hell of a lineup, and it could be one of the best if Rose keeps developing at the rapid rate that he is right now. Then you have Salmons and Miller still off the bench? Wow.
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Old 03-16-2009, 04:27 PM   #5 (permalink)
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Paradox of thrift baby - saving lowers aggregate demand, but spending solves all problems. Boy I fucking hate economics.

Enjoyed the article though. I'm realizing more and more that the cap space Marion gives us this summer could possibly be more key than the cap space JO would have given us next summer. Teams are starving for financial flexibility and we've got it - whether the MLSE brass lets us take advantage of that is another issue entirely, but at least we've got wiggle room. Lets us focus on making the team better as opposed to just getting rid of contracts and being frugal.
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Old 03-16-2009, 04:43 PM   #6 (permalink)
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Does anyone have the breakdown Colangelo gave earlier in the year of what this summer's money would look like? Specifically: if the Raptors dropped Marion's existing contract, would they fall below the salary cap? That would actually be a bad situation for the Raptors.
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Old 03-16-2009, 04:59 PM   #7 (permalink)
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Quote:
Originally Posted by Ligeia View Post
Does anyone have the breakdown Colangelo gave earlier in the year of what this summer's money would look like? Specifically: if the Raptors dropped Marion's existing contract, would they fall below the salary cap? That would actually be a bad situation for the Raptors.
$23 milllion if we renounce everybody. only about $6-8 million if we sign everyone except marion. give or take a bit...
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Old 03-16-2009, 05:12 PM   #8 (permalink)
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Yeah it's about 23 mil to the tax... the cap which dictates our ability to go after FAs if we renounce everyone, is 13 mil. Which means we probably don't have enough to get Marvin or something.

The true value of our space I believe and hope is that half the league will be looking to shed salary to get under the reduced tax, and we can bail them out... we may be able to do something like move up from 7 to 4 just by getting a team under the tax and throwing in 3 mil for good measure. This is the best time to have capspace in terms of baiting recession hit teams.
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Old 03-16-2009, 05:57 PM   #9 (permalink)
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Ok, going over the numbers here.

Let's say the salary cap for next year is about $57,000,000, and the luxury tax is approximately $70,000,000.

If we renounce everyone, our guaranteed salary will be approximately $50,000,000. That means that we are below the cap and the only way we can improve the team is to spend up to the cap (about $7,000,000 in salary we could spend) or to trade assets. However, we'd still be limited by the cap.

If, however, we re-sign a couple of our players we will stay over the cap. This is preferable because it allows us to bring in another asset using the Mid Level Exception (around $5,500,000,000) in addition to keeping the assets we already have, which would have value in a trade.

Dropping below the salary cap would be silly unless we're looking to rebuild.

Now I think we can all agree, then, that the best route for improvement will be re-signing who we have now, drafting to fill our wing needs, signing an asset with the MLE, and then trading our assets. Through trades is where we can take advantage of teams that are looking for salary relief, but you have to wonder which assets we have that would work in a trade like that?

- From a salary perspective, I think AB is a good deal for another team, but you can't get much in return for $6,500,000 unless they're a couple young studs (and they had better be!).
- Calderon is a quality player, but he's had a bad season and his contract has 3 years left at $8,000,000, I believe. Probably not an easy sell to a team looking to cut salary.
- AP is a fairly intelligent role player or 6th man who will likely have a very affordable salary for other teams (presumably with a shorter 1-3 year contract).
- Marion has the physical abilites, but he has had a bad season with two separate teams and looks disinterested. He also seems to think he's still going to get $10,000,000 contract. What team would want to take on Marion at that price?
- CB4 is the face of the Raptors franchise at the moment. However, his future is a little uncertain, and his sheer ability combined with the single year remaining on his contract means that he is great trade bait for a team that wants to re-build, or is interested in signing him in 2010 (since his Bird Rights would go with him). That would allow a competitive team that to go over the cap but still re-sign CB4.

So who are we going to entice other teams with? And do we have any trade exceptions that we can use?

Regardless, it should be an interesting summer.

Last edited by Ligeia; 03-16-2009 at 06:02 PM.
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