Complete Guide to NY Knicks' Salary Cap Situation

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Complete Guide to NY Knicks' Salary Cap Situation
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Remain calm, J.R. and STAT. The cap situation is difficult to comprehend, but it's about to be broken down below.

Heading into the offseason, the New York Knicks are in quite the predicament. Several key areas need rejuvenation after the battle-tested-veteran experiment failed in 2013. They're at risk of losing a few of their own players to free agency, including reigning Sixth Man of the Year J.R. Smith. Oh, and to make matters worse, they have a skimpy $3 million to spend on talent this summer. 

So how can New York possibly answer its various personnel questions in one offseason? It won't be easy, but Glen Grunwald and the Knicks' brass have the resources to abstractly improve for next year.

Before we get started, the answer is no. Chris Paul isn't an option. It has been discussed ad nauseam, and dismissed, as the Knicks just don't have the collective-bargaining agreement (CBA) flexibility to get a deal done.

Now let's get into what the Knicks are realistically facing on July 1.

 

Own Free Agents: Who stays and who goes?

More than half the Knicks' current roster—via an option, non-guaranteed deal, or expiring deal—may not return to the team next season. Seven total players may walk, but it's close to a foregone conclusion that Earl Barron, Quentin Richardson and James White will not be brought back.

Barron and Richardson were brought on strictly for depth in the postseason and their deals expire on July 1. According to Sham Sports, James White's 2013-14 season is fully non-guaranteed if waived on or before June 30, so expect that to happen. New York will then be off the hook for his $917,000, and Flight will become an unrestricted free agent.

Now for the rest of the team's free agents.

 

J.R. Smith

Sixth Man of the Year winner J.R. Smith has a player option for under $3 million next season that he will reportedly—and rightfully—decline, according to ESPNNewYork.com. This will make Smith an unrestricted free agent, free to sign anywhere.

Since Smith has spent the last two seasons with the Knicks, they retain his Early Bird rights, meaning they may exceed the cap to sign him. The maximum New York can offer him is $4.9 million next season, with 4.5 percent raises over four years, equating to just less than $22 million total.

It's possible that Smith could receive larger offers from teams with cap space like the Detroit Pistons or Charlotte Bobcats—although his horrid playoff performance may have scared some front offices away. J.R. has repeatedly indicated that he'd prefer to remain a Knick, and that's what's being reported by Jared Zwerling.

Re-signing Smith for the modest $22 million price tag makes sense for the Knicks. Marc Berman of the New York Post reported that Carmelo Anthony is pushing the Knicks' front office to surround him with more offense, and Smith provided Anthony with some scoring relief in 2012-13. 

Considering the $37 million contract Arron Afflalo—a player of similar position but far lesser talent than Smith—made for himself before the 2011-12 season, four years and $22 million seems to be a fair deal for the Knicks.

 

Chris Copeland

Chris Copeland is 29 years old and heading into just his second NBA season in 2013-14. He signed with New York prior to this past year on a minimum salary deal after a lengthy career overseas.

Copeland's minutes were spotty over the 82-game season, but his scoring ability can't be denied. Per 36 minutes, he scored 20.3 points. The rookie posted a 48-percent mark from the floor, and 42 percent from three-point range, which was good for 13th league-wide.

He will likely be a restricted free agent on July 1, assuming the Knicks extend his qualifying offer of just under $1 million.

Since Copeland hasn't been a Knick for multiple seasons, New York doesn't own his Bird or Early Bird rights. Because of this, the team may not exceed the salary cap to retain him. Its only means of bringing back Copeland for his sophomore campaign would be (a) him agreeing to the one-year qualifying offer for about $1 million, (b) use the majority or entirety of the mini-midlevel exception to re-sign him or to match another team's offer sheet.

If a team signs Copeland to an offer sheet worth more than the mini-MLE, the Knicks cannot match.

When given the opportunity, Copeland dominated at times offensively.

It wouldn't be crazy for a team with cap space to take a chance on Copeland and insert him as a larger piece in the offense. The Knicks have several needs, but wings that are liabilities on defense aren't one of them. However, Cope proved his worth in the playoff series against the Indiana Pacers, where he shot 64 percent from three and 56 percent from the field over the last four games against the stingy Indy defense.

Long story short, the Knicks should love to have Copeland back. But other teams with more to spend could feel the same.

 

Pablo Prigioni

Pablo Prigioni will likely also be a restricted free agent once the team extends the $1 million qualifying offer. Prigioni worked his way into a starting role in his first NBA season as a 36-year-old rookie, after a lengthy and decorated career overseas.

There have been a few contradicting reports already this offseason regarding Prigioni's future. On May 20, The Post reported that Prigioni may wish to return overseas at his wife's suggestion. 

Four days later, Prigioni himself confirmed that he does wish to return the the NBA. The Knicks' interest, on the other hand, isn't as concrete. 

Copeland's restricted free agency rules apply to Prigioni as well. It's a different scenario for the Argentinian guard, however, since teams generally don't knock down doors for 36-year-old point guards. Prigioni was perhaps the Knicks' most consistent option at the 1 in 2013, though, and would probably be worth a small-salary, one-year deal this summer.

Anthony Gruppuso-USA TODAY Sports
Could Coach Kidd bring his former teammate with him across town?

With Jason Kidd—Prigioni's former backcourt mate with the Knicks—the front-runner for the Brooklyn Nets' head coaching job according to Yahoo! Sports, it'll be interesting to see if the Knicks' division rival shows interest in Prigioni. Kidd saw firsthand the effect Prigioni had on both sides of the ball, and may entice management to send an offer Prigioni's way this summer.

 

Kenyon Martin

Kenyon Martin signed two 10-day contracts with the Knicks in February and March, followed by a pact that ran through the end of 2012-13. He'll become an unrestricted free agent on July 1. 

At 35, it's unclear whether the Knicks will be interested in bringing back Martin. He did produce better than anyone could've expected as a Knick, putting up seven points and five boards on 60 percent shooting, but more importantly looking much more fit and interested than he did as a Los Angeles Clipper a season ago.

"Everything was positive," Martin said of his Knicks' tenure according to NJ.com. "I think I have to talk to my agent and we'll figure it out," he went on. "If it's meant to be, then I'll be back."

K-Mart looked upbeat and athletic when relied upon in Tyson Chandler's absence.

If Martin is ready to return to New York on a veteran's minimum salary, I'd bet the team would be happy to have him. If he's looking for larger figures, his future is a bit more uncertain.

Teams can sign players to vets' minimums without counting against the salary cap. The Knicks relied on this heavily last year and will have to continue to do so with much of the cap tied into Amar'e Stoudemire, Carmelo Anthony and Tyson Chandler.

 

External Free Agents: What resources do the Knicks have to sign them?

Unlike the previous collective bargaining agreement, the current CBA severely hamstrings big-market, heavy-spending teams from adding many expensive players. 

The old blanket MLE of around $5 million per season that was available to all teams over the cap now exists as the non-taxpayer MLE, and is available to teams under the tax apron ($4 million above the luxury tax cutoff). For teams above that mark, like the Knicks, there is a lesser MLE for only about $3 million per season.

All teams were previously permitted to add free agents via sign-and-trade deals. Starting this offseason, this is no longer the case. We'll get into that right now.

 

Sign-and-Trades

Can the Knicks use a sign-and-trade deal to bring on a free agent this summer? Probably. Will they? Unlikely.

In order to add a free agent via sign-and-trade, the receiving team would need to be under the luxury tax apron ($75.6 million this summer) not only before the deal, but after it's completed as well. As of today, after Jason Kidd's retirement, the Knicks can get their payroll as low as $70.74 million. Woohoo! Under the apron! Check.

So sure, the Knicks can technically pull off a sign-and-trade, right? Under the following circumstances:

  1. Copeland and Prigioni must be fully renounced.
  2. No Knick free agent can be offered a new deal—including Smith and Martin.
  3. Anthony, Camby, Chandler, Felton, Novak, Shumpert and Stoudemire would be the only players on the books.

But not so fast. According to Article 14 of Larry Coon's Salary Cap FAQ, there are cap holds called "incomplete roster charges" that need to be taken into account here. Since the Knicks would, in this hypothetical situation, only have seven players on the roster, cap holds—think of them as placeholders—in the amount of rookie minimum salaries would be included in the total team salary for each roster spot the team is shy of 12. 

So, under this provision, the Knicks's team salary includes five cap holds (seven players plus five cap holds equals the required 12 roster spots) worth $490,180 each.

That amounts to $2,450,900 in cap holds, plus $70,741,215 in player salary. So the Knicks' team salary in the scenario would come out to $73,192,115. That leaves $2,407,885 of leeway between team salary and the estimated $75.6 million tax apron.

John David Mercer-USA TODAY Spor
The only way for NY to obtain Paul would be through a sign-and-trade, which will be nearly impossible to pull off.

After any sign-and-trade, the Knicks would still need to be at or under the apron. Therefore, New York, in theory, could add on roughly $2.4 million in a deal and still call it a legal agreement.

All of this essentially becomes moot when you consider the final rule when it comes to sign-and-trades: After using a sign-and-trade, the tax apron effectively becomes a "hard cap" for the Knicks. Per Larry Coon, here's what that means:

If the apron becomes a team's hard cap, it cannot exceed the apron under any circumstance. If the team subsequently needs to sign a player (for example, to replace injured players) it must first create room under the apron by waiving player(s) with non-guaranteed salary, waiving player(s) with guaranteed salary and utilizing the stretch provision, trading downward in salary, etc. A team that is hard-capped can sign players to non-guaranteed contracts for training camp or the regular season, but must waive such players before their salary would take the team above the apron. A team subject to the hard cap can also sign players to rest-of-season contracts during the season, as long as the salary pro-ration keeps the team below the apron.

This last note would make it extremely difficult—maybe even impossible—for the Knicks to fill out a roster after a sign-and-trade deal, since their seven employed players would make up 94 percent of their hard cap.

So unless Grunwald and the Knicks' higher-ups do some serious maneuvering, they're going to have to add reinforcements the old fashioned way. 

 

Taxpayer Midlevel Exception

Since the Knicks have no cap room, and will presumably be over the apron after a significant move, their most logical means of obtaining a free agent is via the taxpayer MLE.

Also known as the mini-MLE, it can be used to sign one (or multiple, but usually one) player to a deal for a max of three years. The first year would be worth $3.183 million, with 4.5 percent raises each year. The Knicks used this exception last summer to sign Jason Kidd.

It didn't take long for NY fans to become infatuated with Mozgov's game.

This is the most straightforward method of obtaining a free agent. But since the payout isn't as lucrative as what teams with cap space—or teams with the full MLE—can offer, it's unlikely New York can attract a bonafide difference maker with just $3.18 million.

Former Knick and current Denver Nuggets' center Timofey Mozgov has previously been linked to New York's MLE this summer by the New York Post. The team has a need in the frontcourt, and Mozgov is familiar with the environment. He would likely settle for the modest price tag, so it seems to work for both sides. It'll be just one of many possible fits that Grunwald will explore this summer, though.

 

Veteran's Minimums

The Knicks are permitted to sign players to the veteran's minimum salary at any time as long as there is roster space, even if it brings them further beyond the cap.

New York utilized these last offseason with the signings of Ronnie Brewer, Rasheed Wallace and James White and later with Kenyon Martin.

Vets in the twilight of their careers have shown that they'd be more inclined to sign this sort of deal with a championship-contending team in order to chase a banner. The Knicks can bank on this strategy if all else fails, but it'll be imperative for New York to shave some years off its roster's average age—not the opposite.

 

Trade Exceptions

The Knicks currently own a $954,389 TPE, or traded player exception, that they obtained in the deal with the Oklahoma City Thunder, shipping Ronnie Brewer out last February.

When the Knicks sent out Brewer, whose salary for trade purposes was $954,389, they received a 2014 second round pick. To make the money match, OKC also sent the Knicks a trade exception in the amount of Brewer's salary. The Knicks are now free to trade this exception for another player.

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The not-so-cool part about this is that very few players worth trading for actually make a salary this low, and the Knicks can't combine the exception with a player in a trade. One potential scenario where the team could use this to their advantage is when dealing with teams looking to cut cost.

For example, the Houston Rockets are eyeing a run at a max-level free agent this summer, but need to shed a bit of salary to make cap room. If Houston wanted to trade away, say, Greg Smith, a promising 22-year-old big making under $800,000, the Knicks could trade their player exception for Smith in the amount of his salary. The Knicks will have added a fresh piece to help the team, and the Rockets will have rid themselves of a salary.

This particular deal is extremely unlikely seeing that Smith is an affordable player with good upside, and someone Houston probably wouldn't trade for thin air. But that's the idea.

 

Knicks' Needs

After a successful yet disappointing season in 2012-13, the Knicks have several areas that need replenishing next year. Like, a lot of areas. Backcourt, frontcourt, offense, defense, you name it. The Knicks probably could use it. 

 

Point Guard

With Jason Kidd out of the fold for 2013-14, and Pablo Prigioni no lock for a New York re-up, Raymond Felton remains the only one of New York's point guard trio from last year set to return.

According to starting lineup data from Basketball-Reference, the Knicks were 38-14 in games started by two point guards in the backcourt. Small-ball drove the Knicks to success this past season, and it should be what the team's regime sticks to—at least for the near future.

 

The team has a need for a guard that can distribute and score. They may look to upgrade this way via the draft—the Knicks own the 24th overall pick—but free agency and trades are other options. 

The team will need to wait for the market to play out as the league's offseason draws closer in order to better gauge its options.

 

Youth in the Frontcourt

If the Knicks learned anything from last season, it's that the many-old-men-in-minor-roles strategy doesn't work.

No matter how many old men there are, and how good they seem in the beginning. The Rasheed Wallace/Kurt Thomas/Marcus Camby/(and later) Kenyon Martin frontcourt reserve corps seemed like a grand idea in November, and had Knicks fans loathing senior citizens by April. 

Rasheed Wallace, 38, and Marcus Camby, 39, were statistically the Knicks' best defenders in 2012-13, but the problem was how little they actually played due to injury and age. Wallace was forced to retire with his nagging foot injury, and Camby barely played at all this season with a foot issue of his own. 

With only Camby contracted to return next year, the team has roster space to add on frontcourt help, and need to address it by getting younger, not older. They've worked out several bigs in pre-draft workouts, so that's one possibility. Timofey Mozgov was noted above as a potential target with the MLE, so there's another option.

The Knicks seem to realize the deficiency down low. Whether they'll have the resources to upgrade is yet to be seen.

 

Two-Way Players

What ultimately did the Knicks in was their lack of players that were threats on both ends of the ball. Countless times in the Indiana series, New York suffered through draughts of ineptitude on offense, or just couldn't get a stop when they needed one the most.

If you take a look at the roster, you'd be hard pressed to find a man who can both score and defend well. Let's try:

  • Carmelo Anthony: Defends when he pleases
  • Marcus Camby: Has never been an offensive threat
  • Tyson Chandler: Has no developed offensive game
  • Chris Copeland: Terribly unpolished on defense and on the boards
  • Ray Felton: Has trouble defending point guards (but occasionally holds his own)
  • Kenyon Martin: Can't be relied on as a true scorer in 2013
  • Steve Novak: Defense? Rebounds? What?
  • J.R. Smith: Athletic but can't wrap his mind around using athleticism to stick on his man
  • Amar'e Stoudemire: Ugh.

The only true two-way player the Knicks have on the roster as of now is Iman Shumpert, who still suffers through stretches of futility on offense. 

The team is desperate for an athletic wing that can knock down jumpshots as well as play sound defense. If only the Knicks could afford running Chris Copeland out for longer stretches—or better yet, if only they had someone who could score like Copeland AND defend!

There aren't a ton of players that fit the criteria available this summer, mostly due to the fact that they're pretty hard to come by. But if the Knicks hope to compete for a title during Anthony and Chandler's primes, they'll need to limit their liabilities on the court at all times. 

A potential name that seems to fit the bill is forward Matt Barnes, who should be within the team's price range. Barnes has never been a lockdown defender, or even a noteworthy scorer, but he's never been deemed a liability on either end either.

This past year with the Los Angeles Clippers, Barnes averaged 26 minutes per contest. He shot the three-ball adequately at 34 percent, and made 46 percent of his shots overall. His deal expires on July 1.

Grunwald will have to dig deep into the free agent crop to improve the team. He noted himself that the front office will need to "be creative" in finding proper fits both on the court and in the payroll.

It should be a telling offseason for New York. With the right moves, the Knicks may find themselves in a position to make noise against a revamped Eastern Conference—one that will welcome back stars the caliber of Derrick Rose, Danny Granger, Rajon Rondo and possibly Andrew Bynum.

And with one ineffective summer, Knicks' management could possibly throw away everything they've spent a decade building—as the possibility of Carmelo Anthony leaving town and opting out after 2014 could become a chilling reality with just a few false steps.

Follow me on Twitter at @JSDorn6.

Is there something I missed? Have any other ideas? Share 'em in the comments.

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