Friday, July 22, 2005

Salary cap percentage will only rise to 49.5% in 2005-06

By Dan T. Rosenbaum

In an e-mail Chad Ford of told me that the salary cap percentage will not be 51% in 2005-06. It will be 49.5% in 2005-06 and 51% starting in 2006-07. This means that if the formula for the salary cap does not otherwise change, the salary cap is likely to be between $49 and $50 million. If the formulas do change (and they should), the salary cap could be quite a bit less than $49 million.

The teams most affected by this phasing in of the salary cap percentage probably are Cleveland and Milwaukee. Both teams are bumping up against the salary cap, so it may be tough for Cleveland to be competitive for Marko Jaric or possibly for Milwaukee to be able to re-sign Za Za Pachulia.

Also, since maximum salaries are a function of the salary cap, maximum salary players, such as Michael Redd and Joe Johnson, are likely to be paid a little less than they would have if the salary cap percentage had not been phased in.

Last updated: 1:30 PM, July 22, 2005


Anonymous Anonymous said...

Dan, how would the Bucks have problems with Pachulia under the salary cap? They have his early Bird rights is my understanding. I thought the only issue is how the new CBA treats the ability of those "Boozer-Okur" two-year players. I thought I had read the new CBA would be more generous to teams looking to match.

I might be missing something, but I think the only major problems the Bucks have with Pachulia will be the luxury tax if they have to sign him for something north of $3 million a year.


7/22/2005 10:33 PM  
Blogger Dan Rosenbaum said...

Counting Simmons at $47 million over 5 years, Gadzuric at $36 million over 6 years, Bogut at $4.3 million, and Redd with a $6 million cap hold, my calculations have Milwaukee at almost $51 million. Pachulia's cap hold would be another $800K above that. That suggests to me that the Bucks have some work to do to reduce the salaries to Simmons and Gadzuric so that they can preserve the cap holds for Redd and Pachulia. That trade for Welsch may end up being very costly.

7/22/2005 11:15 PM  
Blogger Dan Rosenbaum said...

Actually I am not quite right in my earlier comment. It is Simmons that the Bucks need room for, and with cap holds for Redd, Gadzuric, and Pachulia, I have them at about $40.3 million. $47 million over 5 years suggests a starting salary for Simmons of $8.1 million or more. So if the salary cap came in lower than $48.4 million (which it could if reasonable changes are made to the salary cap formula), Milwaukee will have to ask Simmons to take less or they will have to renounce their early Bird rights to Pachulia.

I am not quite sure why the Bucks took the risk of signing Bogut right now. That move likely cost them about a $1 in salary cap room - room that might prove to be pretty valuable.

7/23/2005 6:09 AM  
Anonymous Anonymous said...

Thanks your calculations assume that they have already renounced Kukoc? (not sure how that works since he was only signed to a one-year deal)

I think the Bucks signed Bogut right away because they wanted him in the Summer League with no questions asked regarding injury issues....I may be wrong on this.

7/23/2005 2:00 PM  
Blogger Dan Rosenbaum said...

Yes, I am assuming that Kukoc is renounced. I hope they change the rules regarding cap holds for rookies on rookie scale contracts. It is silly to put teams in this situation where they want to delay signing a rookie, even though almost every team ends up paying their rookies 120% of the rookie scale.

7/23/2005 4:40 PM  
Anonymous Anonymous said...

Whether they signed bogut or not that cap room would not be available, as with zaza you have to resign your players first before you sign free agents otherwise as pointed out you lose their early bird rights, i'm not sure exactly how it works with 1st round picks but im sure you cannot sign free agents with cap space then sign your first round picks,

7/24/2005 9:15 AM  
Blogger Dan Rosenbaum said...

Teams do not have to sign their own free agents first. If fact, if Milwaukee signs their own players first, they will not have enough room for Simmons. But if players are not renounced (resulting in the team losing their Bird rights), there are prescribed amounts they count toward the cap.

A first-round rookie counts at 100% of his rookie scale contract amount up until the time he signs (or verbally agrees to) a contract. Then he counts for whatever he signs for. Almost all first-rounders sign for the maximum of 120% of the rookie scale amount, so in the case of a player like Bogut, the Bucks would have had about $700K more in cap room if they had waited to sign Bogut.

7/24/2005 4:46 PM  
Anonymous Anonymous said...

thanks for clearing up the rookie question, but what i meant by signing their own free agents first was pertaining to the bird rights, in order to use their bird rights you have to sign them first without signing new player, (ie cannot use all cap room to go after other players then resign your own using bird rights as in the case of zaza)

7/24/2005 8:37 PM  
Anonymous GrandAdmiralDan said...

What "anonymous" just said is just not accurate at all :)

I would suggest that you try reading Larry Coon's CBA FAQ.

And if you've read it, read it again :)

7/29/2005 3:04 AM  

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