As the eyes of many NBA fans shift towards the postseason, some front office executives are thinking about how they can improve the fates of their franchises that are not currently vying for postseason play. The pre-draft process is filled with tons of scouting, evaluation periods, internal discussion and workouts for some of the hopeful rookies that want a spot in the NBA.
Taking the drafting needs and picks into consideration, financial considerations can paint the biggest picture to what decisions will be made beyond the draft. Trading some players, utilizing cap space for taking on others, and preparing for free agency all are highly informed by the team's salary situations – after all, the NBA is a business.
Both the Houston Rockets and Boston Celtics finished as runners-up in their respective conferences. The Rockets were the best team in the regular season in the entire NBA, and while they were on the brink of making the NBA Finals, they still have enough roster turnover and free agent spots to have a potentially better roster next year. Boston overcame great odds to make the postseason push they did, considering Gordon Hayward missed the entire year and Kyrie Irving wasn't in the playoffs. The ceilings are incredibly high for these two teams, but both have and will maximize their rosters in drastically different ways.
2017-18 Record: 55-27
2018 Draft Picks: 27th
Restricted Free Agents: G Marcus Smart
Unrestricted Free Agents: C Aron Baynes, C Greg Monroe, PG Shane Larkin
Other Players of Note: F Semi Ojeleye (partial guarantee), F Abdel Nader (partial guarantee), C Daniel Theis (non-guaranteed contract)
Committed Salary: $107,433,523
Luxury Tax Room: $16.6 million
No team is in a better position long-term than the Boston Celtics. They've had impeccable cap and asset management, have a glut of young talent signed for the long-term and a healthy salary cap sheet. There's so much upside for this team with the returns of Irving and Hayward that Boston doesn't need to rely heavily on free agency this year for any glaring needs. The Celtics could open next year with a starting lineup of Kyrie Irving, Gordon Hayward, Jaylen Brown, Jayson Tatum and Al Horford. Holy moly!
Still, the two backcourt members that shouldered the load this postseason in the absence of Irving and Hayward have some important questions surrounding their value and how the Celtics navigate those waters. Remember: Boston could have up to four first-round picks in 2019 as well, so they're at no shortage of power in negotiating what they want.
Order of Operations
1. The line in the sand with Smart
It will be very difficult for the Celtics to replace the grit and mental edge of Marcus Smart if he leaves via free agency. While Smart isn't a great statistical player, his impact on a team is widely coveted around the league. Because Smart is a restricted free agent, the Celtics can match any offer for him and keep Smart in the green and white long-term.
However, President Danny Ainge should be weary of going into the luxury tax this season. The Celtics, $16 million away from that line right now, will almost certainly vault above that level within the next few years, meaning the repeater tax is something to be cognizant of. It doesn't mean Boston shouldn't go into the luxury tax this year, as there's still the maneuverability to get themselves beneath it in the future. It simply means that Smart isn't a "keep at any cost" type of player.
I'd identify about $12 million a year as the absolute max the Celtics could pay for him. Combine that with the cap hold from the 27th pick and the $5.45 million Taxpayer MLE, and the Celtics should be about $2 million over the luxury tax. Boston would then have only one roster spot to fill, and being that minimally over the tax would leave the C's in a decent position.
2. Scary Terry: to keep or to trade... or to extend
It's quite possible that Terry Rozier's trade value never will be as high as it is right now. A restricted free agent in 2019, Rozier makes $3 million next season. However his path to heavy minutes may be blocked by the presence of Irving, meaning it is time to cash out on him now and remain flexible in the future. Scary Terry should net the Celtics a moderate first-round pick, and with teams bidding on him now before restricted free agency hits, it might be a solid coup to get those Bird rights and the right to match offer sheets next summer.
Boston wouldn't be wise to wait until the trade deadline to deal Rozier if they know they can't pay for his services next summer, as his value could take a hit between now and then. But other teams around the league know that, and might as soon wait a year and bid highly for him on the RFA market, knowing Boston won't match. A lot of this decision changes if Marcus Smart is allowed to walk away, in which case a moderate Rozier extension could be in the works. Would Boston rather have Rozier for cheaper than Smart over the long-term and replace his defensive presence elsewhere?
There are a ton of options available, but it wouldn't be shocking to see teams like Orlando, Phoenix or Brooklyn try to get involved with trades for Rozier.
3. Is draft-and-stash in play at 27th?
There's barely any difference financially between the Veteran's Minimum contract and the 27th pick this season, which puts Boston in a solid place no matter what they decide to do regarding the luxury tax. Boston and Danny Ainge could grab another future asset and draft-and-stash European prospect to add to their stockpile without the clock ticking for its contract.
There are a couple of names that fit the bill. Dzanan Musa, a tall and wiry playmaker on the wing, would be a welcome switchable addition to Boston's bench down the line. Elie Okobo, the scoring and playmaking point guard, would be a long-term backup to Kyrie Irving, buying the Celts more time to resolve their work with Rozier and Smart. I also like multi-positional defender Isaac Bonga here, who could be a multi-year project for the Celtics.
Many think that teams competing for a championship go to their late-20s draft picks for ready-now NBA players. That's not always the case, and in a scenario where a veteran on the minimum could be had for the same price, there's little advantage to trying to stick someone who isn't absolutely ready into the rotation on a championship-chaser.
4. The Mid-Level Exception
We saw the supreme value of Aron Baynes this postseason when the big man was an awesome rebounder and defender that also found a miraculous stroke from three. Boston needs to find a way to replace or retain him at the center spot. Of course though, the budget for getting that position is dependent on what happens with Marcus Smart.
Should Smart come back to Boston, the Celtics will likely only want to use the $5.45 million Taxpayer Mid-Level Exception, covering their own ass from being hard-capped. With that $5.45 mill, Baynes should be available to stay, and that should be Boston's preference -- they'd sign him for two years and then secure his Bird rights for his next free agency.
If Smart leaves, Boston's biggest tool for replacing him becomes the $8.8 million Mid-Level Exception, and now they have to figure out whose production to replace: Smart's or Baynes'. With the returns of two backcourt players from injury and Rozier ready to absorb those minutes, I'd expect Boston to actually split their $8.8 mill MLE at that point, as there aren't many big men on the market who fit into that budget nicely this summer.
5. Looking ahead...
Because Boston has a stockpile of riches, the versatility is there for the C's and Ainge to make even another aggressive play to add to their roster. What that play is, we might not know for another year. In 2019, Marcus Morris and his incredibly team-friendly contract come off the books. That's a deal that will be difficult to replace, and the Celts will likely do so with their multiple first-round picks in that year. Could they ship away another one or two of them with Rozier to make a massive splash?
I'm not anticipating a heavy amount of long-term movement from this core until we see how next year goes. The bottom line is this: Ainge won't do much this summer to take away his future flexibility with picks until he sees how the full-strength core looks.
2017-18 Record: 65-17
2018 Draft Picks: 46th (from MIA)
Restricted Free Agents: C Clint Capela
Unrestricted Free Agents: PG Chris Paul, F Trevor Ariza, F Luc Richard Mbah a Moute, F Gerald Green, C Tarik Black, F Joe Johnson
Other Players of Note: C Zhou Qi (non-guaranteed contract), G Aaron Jackson (non-guaranteed contract)
Committed Salary: $81,046,641
Luxury Tax Room: $42.4 million
Well, they've proved their point... Houston was just a few possessions away from toppling Golden State and making it to the NBA Finals. That should be enough to get buy-in from pretty much any type of veteran they want. Now, with the way GM Daryl Morey has constructed the roster with Bird rights and low salaries guaranteed, the Rockets can also be big-time players in free agency for the likes of LeBron James and Paul George.
Scared of the Rockets yet? You should be...
Order of Operations
1. Will they swing for a superstar?
Right now, here's the quick version of how the Rockets add another superstar: they've got to trade for one, either via sign-and-trade or by one of them opting into their contract. So, if the Rockets were to add LeBron, they would have to orchestrate a trade with Cleveland, similar to the way they did with Chris Paul and the Clippers last year, that would see them part from Ryan Anderson and Eric Gordon, among other players.
Why does it have to be this way? The cap hold of Chris Paul ($36 million) is too large for the Rockets to get far enough under the cap to sign one superstar outright. Whether they try to nab LeBron or even Paul George remains to be seen, but the Rockets will certainly place calls and see the interest that King James has of heading to the Western Conference.
2. The Ryan Anderson dilemma
If the Rockets cannot get LeBron or George, they'll still explore ways to get off the contract of Anderson. Right now, with the playing style that best suits the Rockets and the rest of the NBA, a player like Anderson is simply difficult to tolerate defensively. Signed for more than $41 million over the next two years, it's a lot of money for a team competing for a championship to swallow for minimal production.
On the flip side, we have to explore the cost associated with unloading Anderson, which likely is multiple first-round picks in the future. Houston won't be receiving cap space from an Anderson departure either, as they'll vault themselves over the cap with new contracts this summer anyway. So the question is: will Houston be desperate enough to pull the trigger on dumping Anderson, and will some other team that knows their desperate raise the cost of absorbing his deal?
If it's me, I'm absolutely paying almost any price in terms of draft picks to offload Anderson. The tax savings, as well as the replacements available through the Mid-Level Exception, make the Rockets more than better off without him. If they believe in what they're building long-term, they'll sacrifice those draft picks.
3. Sign CP3 and Capela to their deals
Here's where things get expensive, and why I listed the Rockets room beneath the luxury tax instead of the cap. If Capela and Paul both sign maximum deals with Houston, that will balloon Houston's current payroll up above $135 million. They'll still have five roster spots to fill as well.
For this reason, the Anderson trade makes more sense (it gets the Rockets down to $115 million) and is worth the cost regardless. These Rockets are championship contenders, and both Paul and Capela are the two biggest pieces outside of Harden. Of course, the large $135 million-plus payroll is worth it if they can add another superstar to push them (hopefully) above Golden State. Still, there's little doubt that the Rockets will match any offer for Capela and be able to retain CP3.
Don't cross your fingers that either take less than they're worth, but Rockets fans can feel secure knowing they'll both be back in Houston. That especially applies to CP3, whose max contract this year would be a five-year deal worth in excess of $200 million. That would pay Paul until he's 38... yikes. That might be a cost worth competing for a title if you're Houston, but it's also the quickest way for things to turn sour in a few years. Expect the Rockets to negotiate that number down as much as they can.
4. Fill in the holes from there
Houston will be a popular destination for veteran free agents this summer, so long as they're willing to accept the minimum. That includes some of their own free agents, like Luc Richard Mbah a Moute, Joe Johnson and Gerald Green. All three had roles for Houston this year and likely would next season as well; they'd be welcomed back and all three should want to return.
Of course, the biggest target is Trevor Ariza, whose Bird rights they own, meaning he can make more than the minimum. Houston will want to penny-pinch with his contract, limiting it both in terms of years (he'll already be 33 by the start of the season) and dollars (since they anticipate being in the luxury tax). Ariza is a player they don't want to lose because they're running low on players with Bird rights, and that's something they'll need if they want to keep their championship-caliber team together.
Of course, there's the possibility that the Rockets use the $5.45 million Taxpayer Mid-Level Exception, regardless of what happens with Ariza or Ryan Anderson. Many players would take the pay cut to come to Houston, and that's a big deal for the Rockets in a year where there's a truncated amount of teams with signing power.
5. The troublesome 2019-20 repeater tax
If the Rockets don't unload Anderson, they're facing a dangerous tax bill during the 2019-20 season. Assuming they go over the luxury tax this year, the team would owe $148 million just to Paul, Harden, Capela, Anderson, Gordon, PJ Tucker and Nene. That would push the Rockets to over $65 million in tax penalties -- and that's just with seven players under contract.
Some people will say that paying the tax is the cost of competing for a championship. Others think more shrewd fiscal management is key to making this a worthwhile endeavor. No matter where you fall, it does seem like the Rockets will at least have to shed some money somewhere along the way. Their roster is in great shape and they're an attractive destination for multiple types of players this summer, but Morey has to be calculated enough in each action he takes to ensure the Rockets aren't overly-bogged down with tax payments in 24 months.
Head Boys Basketball Coach, Boys' Latin School (MD).