Complete Guide to Sacramento Kings' Salary Cap Situation

Sim Risso@@SimRissoFeatured ColumnistJune 10, 2013

What the Kings do with Tyreke Evans will determine a lot of their cap situation.
What the Kings do with Tyreke Evans will determine a lot of their cap situation.Mark D. Smith-USA TODAY Sports

With a new ownership group and head coach in place for the Sacramento Kings, along with a new general manager to follow shortly, the team has a unique opportunity to reverse its fortune. However, in order to do that, the franchise needs financial flexibility with the salary cap, which is something it's currently lacking.

Of course, while the Kings don't have the same cap space as teams like the Atlanta Hawks, they could be worse off, like the Toronto Raptors, and have a ton of money locked into their roster, no salary cap space and still be lacking a playoff-caliber squad.

Even with their financial situation less than ideal, the Kings still have some options to try and create additional flexibility. In short, all is not lost for Sacramento this offseason. Just don't expect the team to go out and sign a few max-level free agents.

NBA Salary Cap Outlook

Before we know exactly how much cap space the Kings have to work with, we need to know where the NBA will set its salary cap for the 2013-14 season. Luckily we recently got an answer from ESPN's Marc Stein.  

According to Stein, the cap is only expected to raise roughly $500,000 over where it's set for the 2012-13 season. That means teams expecting a significant increase are sorely disappointed, as they'll have to stick with the status quo for the time being.

Luxury Tax Threshold

Along with the salary cap, the luxury tax threshold for 2013-14 has already been set, according to ESPN/Hoopsworld contributor Larry Coon.

As with the salary cap, this determination will go a long way in outlining how much room the Kings have to work with.

On the one hand, Sacramento is unlikely to hit the luxury tax threshold during the 2013-14 season. On the other hand, the franchise needs to be cognizant of where it stands going forward, that way the luxury tax doesn't prevent it from retaining some of its players as they reach free agency.

Sacramento's Current Salary Situation

The Kings currently have $42.02 million guaranteed toward player salaries for the 2013-14 season. However, that's not the inclusive total, so it doesn't include qualifying offers to restricted free agents like Tyreke Evans, Toney Douglas and James Johnson.

Sacramento's inclusive total, so the total including qualifying offers to restricted free agents, is $55.99 million.

When compared to the previously mentioned projected 2013-14 salary cap of $58.5 million, it becomes apparent the Kings don't have much room to retain their own restricted free agents and bring in free agents from the outside.

Sacramento basically only has room to do one or the other, unless it's looking to add free agents for the veteran minimum or on an exception.

Kings' Restricted and Unrestricted Free Agents

The Kings are stuck with having the guaranteed total of $42.02 million. The only way to decrease that total would be to use the amnesty clause, which Sacramento has yet to use since it was added to the most recent Collective Bargaining Agreement.

While the guaranteed total isn't likely to be less than the $42.02 million, it could actually be more, depending on what the Kings decide to do with their free agents.

On that front, Sacramento only has four free agents, but how it handles those players will go a long way in determining how much cap space it'll have to work with.

Tyreke Evans ($6.92 million), James Johnson ($3.95 million) and Toney Douglas ($3.1 million) are all restricted free agents due their listed qualifying offers. If Sacramento declines the qualifying offers, those players will become unrestricted free agents, and the team will no longer owe them money.

However, If it doles out the qualifying offer, the team has the right to match any offer that player receives to retain him.

In total, the qualifying offers are roughly $14 million. Hence the inclusive total of $55.99 million. Of course, the Kings could end up paying their players more than the qualifying offer in an extension, most notably Tyreke Evans if Sacramento decides to keep him.

On the other hand, the team is unlikely to retain James Johnson at a price near $4 million, so in all likelihood his qualifying offer won't contribute to the salary cap.

The Kings only have one restricted free agent in Cole Aldrich. Aldrich doesn't factor into the inclusive or guaranteed total. Yet if Sacramento wants to retain him, it'll have Bird rights, meaning it can keep Aldrich even if that means the team has to go above the salary cap to do it.

Luckily for the team, Aldrich isn't going to command much money on the open market, so that's an unlikely scenario, even if the Kings bring him back.

The Big Picture

There are two outlooks for how the Kings could play this thing. The first scenario involves them  creating as much cap space as possible to use in the free-agent market.

Yet, while slim, there's always the chance the Kings go out and make a big push in free agency right now. If that's their choice, they could shed a sizable chunk of their salary commitments.

Since it hasn't used the amnesty clause, Sacramento could use it right now. Marcus Thornton or John Salmons would be the two most likely candidates.

Thornton is due $8.05 million next season and $8.57 million in 2014-15. Salmons is slated for $7.58 million this upcoming campaign and $7 million (although it's not fully guaranteed) the following year.

Shedding either of those contracts would save the Kings roughly $8 million in cap space.

Sacramento could also choose to pass on issuing qualifying offers to Evans, Douglas and Johnson, saving it an additional $14 million.

In that situation, the team would have $22 million to work with in cap flexibility. The problem is only eight players would be under contract, not including the first-round pick.

That means that $22 million would have to be spread over multiple players in filling out the roster. So while it sounds like a lot of space to work with, it actually wouldn't go that far.

This second outlook is how things will most likely play out involving Sacramento's cap situation based on the information we have, coupled with deductive reasoning.

One assumption that is fairly simple to make, and that was previously mentioned, is that Sacramento is unlikely to extend a qualifying offer to James Johnson. Johnson was atrocious on offense last season, and his playing time dwindled as the season wore on. After making $2.81 million in 2012-13, there's no logical explanation to giving him a raise to $3.95 million for 2013-14.

Secondly, although the Kings still have the amnesty clause available to them, all signs indicate they're unlikely to use it this offseason.

When speaking to reporters following the sale of the team officially closing, new owner Vivek Ranadive made it that clear wins and losses wouldn't be the measure of success initially.

"It's a process," Ranadive said, according to Josh Dubow of the Associated Press. "It's going to take a couple of years. Our success criteria aren't going to be wins and losses right off the bat."

Ranadive, the chairman of TIBCO Software, likened an NBA team to a jazz band filled with individuals rather than a regimented marching band.

"Everybody can do their own thing but they come together and the coach provides the sheet music and it's all music at the end," he said. "That's what we see for the future."

If Ranadive isn't overly concerned with wins and losses in his first year of ownership, we can deduce that he's unlikely to amnesty a player to create cap space at this point. Depending on how the team performs in 2013-14, that may be something it will do next offseason. But likely not before then.

As for Tyreke Evans and his qualifying offer, there's nothing concrete to go off of. The closest thing we've seen to a report is speculation from Jason Jones of The Sacramento Bee.

Jones' thinking adds up. At the very least, the Kings are likely to extend Evans his $6.92 million qualifying offer.

From there, the team can either: A) Keep him on a one-year tender worth $6.92 million, with Evans eligible for unrestricted free agency after that contract expires; B) work out a long-term contract with Tyreke on its own or by matching an offer he receives elsewhere; or C) trade him to another squad.

Either way, almost any scenario involves the Kings taking on salary at least equivalent to his qualifying offer, if not more.

As for Toney Douglas, it's difficult to even gauge what Sacramento will do. On the one hand, he was a valuable asset last season, and he's only due a qualifying offer of $3.1 million. On the other hand, the Kings already have two point guards in Isaiah Thomas and Jimmer Fredette, which doesn't even factor in the possibility of the team drafting another.

I'm guessing, and that's all it is at this point, that Sacramento doesn't give him his qualifying offer, making Toney Douglas an unrestricted free agent.

That means the most likely outcome is the Kings extending a qualifying offer of $6.92 million to Evans, with the possibility of paying even more, and letting James Johnson and Toney Douglas walk.

In that scenario, the Kings would have roughly $49 million locked in before free agency opens. That leaves about $8 million to work with on the market.

It's enough money to add a player on a mid-level exception or at the veteran minimum—so nothing to be too excited about.

However, Patrick Patterson's contract expires after this season, and John Salmons' contract isn't guaranteed for 2014-15, not to mention he's in the last year of his deal along with Marcus Thornton, Chuck Hayes and Travis Outlaw.

That's when the Kings' cap situation opens up, and that's when they'll be much more likely to be active players in the market. 

Unless stated otherwise, all contract information comes from Hoopsworld.

Follow me on Twitter: @SimRisso

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