Jason Lloyd: Mythical salary floor for next season won’t thrust Cavaliers into free-agent market

By Jason Lloyd
Beacon Journal sports writer

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Ever since they began this roster reconstruction with the 2011 draft, the Cavaliers have steadfastly avoided free agency. General Manager Chris Grant has made it clear he will rebuild this team through the draft and trades. That won’t change next summer, regardless of the changes coming to the collective bargaining agreement and salary cap.

There is a common misconception that the Cavs must spend big in free agency next summer in order to reach the new salary floor, but that isn’t true.

Beginning next season, teams are required to spend 90 percent of the salary cap — commonly referred to as a salary floor. This season that figure is 85 percent of the cap, but the Cavs easily cleared the threshold because Baron Davis’ mammoth contract is still included in the figure. But next season, Davis’ contract comes off and the floor increases by 5 percent.

For the sake of simplicity, we’ll assume the salary cap for next season is $60 million (it has held firm at $58 million the past two seasons). That would mean the salary floor, or the amount each team must contribute to payroll, is $54 million. The Cavs only have six players under guaranteed contracts right now for next season at about $28 million. The two first-round picks coming in the summer together should make about $5 million. Factor in the qualifying offers and team options on guys like C.J. Miles, Omri Casspi, Jeremy Pargo and Jon Leuer and the Cavs could go as high as $43 million committed to 12 players (counting the two incoming rookies) — even though in all likelihood, not all 10 of the players currently on the roster will be back.

That still leaves three players to sign and a minimum of $11 million to spend.

Or does it?

Under this hypothetical, the Cavs’ payroll doesn’t have to reach $54 million, two high-ranking officials within the league confirmed. If the salaries on the payroll only amounted to $47 million (just as an example), then ownership would simply kick in an additional $7 million that would be dispersed among the players on the Cavs.

The players are going to get their money. Whatever the salary floor is next season, each of the 30 teams must contribute at least that amount toward salaries. But they don’t necessarily have to spend it on their own payroll.

That’s key for a team like the Cavs, who try hard to avoid negotiating with unrestricted free agents. The team will typically have to overpay in free agency for veterans to sign here, ultimately destroying the cap space Grant considers to be so precious.

Next summer’s crop of free agents isn’t particularly exciting. There are a few appealing pieces, such as Paul Millsap of the Utah Jazz, who has averaged 16.7 points and 8.2 rebounds the past three years. But big men generally get overpaid in the summer.

If Omer Asik can coax $25 million out of the Houston Rockets based on averaging 2.9 points and 4.4 rebounds after his first two years in the league, then a guy like Millsap could feasibly command upwards of $60 million. That’s more than the Cavs are willing to spend right now.

To be clear, the Cavs’ paltry payroll isn’t on orders from ownership. Dan Gilbert certainly hasn’t mandated the Cavs to stop spending.

In fact, as the team has recently waded through the final few years on bloated contracts to guys like Davis and Antawn Jamison, Gilbert has given approval for the Cavs to enter the luxury tax through trades if necessary. If the Cavs could get an attractive pick for taking on a bad contract, Gilbert was in favor of it despite the Cavs having zero chance at a championship in either of the past two seasons.

All of this isn’t to say the Cavs won’t reach the salary floor next season. As teams like the Chicago Bulls and Brooklyn Nets come dangerously close to paying exorbitant tax penalties under the new luxury tax rules, the Cavs could swoop in and take a contract off their hands — provided it comes with the type of draft pick or young player the Cavs covet.

This is simply a philosophical shift within the front office since Grant took over and the team’s priorities changed from winning now to rebuilding. The belief is simple: If the team swings and misses on a draft pick, it costs them only that pick and a few million dollars. Swing and miss on a big-ticket free agent, however, and the cap implications could cripple the team’s financial flexibility for years.

The Cavs have added two rookies through the first round of the draft in each of the past two years. That will continue again this season, since they have their own first-round pick and the more favorable choice between the Miami Heat’s pick and the Los Angeles Lakers’ (lottery protected) pick.

By the time next season begins, the Cavs should have six players taken fairly high in the first round in the past three drafts. There is always the chance Grant pulls off a trade for a young player the team can control for at least a few years. In fact, there is a much better chance the Cavs make a splashy trade rather than overspend in free agency next summer just to hit a mythical payroll figure.

The players will get their money, it will come out of Gilbert’s pockets and Grant can still preserve his salary cap space for things other than free agents.

And the Cavs’ rebuilding plan will continue as scheduled, one draft at a time.

Jason Lloyd can be reached at jlloyd@thebeaconjournal.com. Read the Cavs blog at http://www.ohio.com/cavs. Follow him on Twitter http://www.twitter.com/JasonLloydABJ. Follow ABJ sports on Facebook at http://www.facebook.com/sports.abj.

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