Cleveland Cavaliers Must Already Begin Mulling Major Offseason Decisions
The Cleveland Cavaliers' ship is currently in cruise mode, but some rough waters lie ahead.
Along with the Big Three, the trades for Timofey Mozgov, Iman Shumpert and J.R. Smith have given the Cavs one of the most talented rosters in all of basketball.
So, what's the problem?
It may not last long.
Although the focus should squarely be on this season's performance, it's general manager David Griffin's job to ensure the future of his team as well. For Griffin, this means some tough offseason decisions.
Many of the players hold options that either they or the Cavaliers can pick up or decline. Some will be restricted free agents and have positioned themselves to enjoy significant raises. One has already announced this season will be his last, with others sure to consider the same.
Enjoy this Cavs team while you can, because next year's version could look quite different.
Payroll Projections and Salary Cap
For four years, former general manager Chris Grant kept the Cavaliers' payroll low, leaving room for LeBron James to possibly re-sign with his old team.
Now that James has returned, expect the team's total salary to balloon once again.
Majority owner Dan Gilbert certainly isn't the penny-pinching type who views this strictly from a business aspect. He wants to win, bad. The last time James was in town, Cleveland's payrolls were among the highest in the league. Now with three superstars to keep happy, the team's salary will quickly reach record levels.
Gilbert appears to be OK with this, telling Chris Haynes of the Northeast Ohio Media Group back in October:
"To me, it's like getting to the two‑yard line, and okay, we're done now. I think it's not even smart business or maybe not even smart financially, because there is obviously risk involved. But when you're willing to do that, theoretically, your revenues can offset part of that as well and increase in revenues. Definitely, when the decisions are ours and they're regarding financial, that should not stop us or be any significant barrier to delivering championship‑caliber basketball here.
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So, money is no option here, Dan?
OK, great, because this team is going to need a lot if you want it to stay together.
This season, the Cavs have over $81 million committed to their roster, third-highest in the NBA, per Basketball-Reference.com. Keep in mind that Kyrie Irving's five-year max extension that he inked last summer has yet to kick in, and James and Kevin Love have yet to sign their own max deals.
Cleveland already has $78 million committed for next season without factoring in new contracts for Tristan Thompson, Iman Shumpert and Matthew Dellavedova. This also doesn't include Brendan Haywood, who carries a $10 million non-guaranteed option.
Add those four to the mix, and it's extremely likely Gilbert will be paying his team over $100 million. The 2013-14 Brooklyn Nets are the only team in NBA history to eclipse this total.
The good news for the Cavaliers? Even with a skyrocketing payroll, they may not even be over the salary cap for that long.
According to Bleacher Report's Howard Beck, the NBA's new TV deals will lead to significant cap increases over the next three years.
"The dramatic revenue infusion will produce a likewise dramatic increase in the 2016 salary cap—a leap of $17 million to $24 million, by various team-produced projections—and that’s where the problems begin.
The cap for next season is projected to be $67 million.
One team expects it to rise to $84 million in 2016. Another team believes it will be closer to $91 million—with an additional leap to $127 million in 2017.
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If Beck's projections hold true, that would mean the salary cap would more than double in just four years, a staggering amount. The NBA is in a good place financially thanks to its partnership with ESPN and TNT, but even this kind of jump seems extreme.
For the Cavaliers, it means dipping into the luxury tax for what would appear to be three seasons. This is where the dreaded repeater tax kicks in. The deeper a team dives into the luxury tax, the more money they owe overall.
Gilbert need only ask Nets owner Mikhail Prokhorov what kind of damage that can do to one's pockets, even as a billionaire. The 2013-14 Nets paid nearly $70 million in taxes alone, given their massive payroll and dip into the repeater tax.
Unlike the Nets situation, Cleveland has some light at the end of the tunnel. A projected salary cap of $127 million in 2017 should still be above what they stand to spend, removing the Cavs from the repeater list.
As long as Gilbert is willing to spend, this core could stay together for a long, long time. If he changes his mind, here are the big decisions that will have to be made:
Team Options
This is the easiest move Griffin will make all summer.
Cleveland's only player who holds a team option is Mozgov, who's quickly become the Cavs' best player outside of the Big Three. This option is valued at just under $5 million. Mozgov will then hit unrestricted free agency in 2016, where his salary will almost assuredly more than double.
The 7'1" Russian is averaging 10.4 points, 8.2 rebounds and 1.6 blocks in his first 21 games with the Cavs. Griffin can't pick up his option soon enough, and he should be talking to Mozgov's agent about a long-term partnership, pronto.
Player Options
This is where things get tricky.
James, Love, Smith and Mike Miller can all decide their fate next season.
Miller stands to make $2.8 million if he returns, which is good money for a 35-year-old averaging less than 15 minutes a game. The Cavaliers should gladly invite him back at that price as well, as Miller has been a true pro and is constantly encouraging teammates even at the expense of his own playing time.
As he recently told Chris Haynes of the Northeast Ohio Media Group:
"I would say yes. I am coming back, but it's a long year. I'm going to see how this one goes. All I'm focused on is what we do here. We've got 25 games here and then a playoff run. We'll see how that goes. Where I'm at now, I've been blessed to do 15 years. It's a year-by-year basis. I love what I'm doing.
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One of the reasons for Miller's lack of playing time has been Smith, who's averaging 13.0 points as the team's starting shooting guard.
When asked about what he was planning on doing with his own option, Smith told Bleacher Report in early February, "I'm just thinking about winning right now. I know if we win, that will take care of everything."
He did make it a point to praise the city and his situation, saying, "I'm extremely comfortable [in Cleveland]. I know where a lot of things are for the most part. Things where I need to know, to and from the gym and to a few restaurants, so that's good enough for me."
Smith's player option is valued at $6.4 million. While that seemed like too much for the New York Knicks to offer on a rebuilding team, it's actually good value for what Smith has provided the Cavs.
As for James and Love, they appear to be biding their time until the new TV deal kicks in and the overall value of a true max contract increases. James certainly isn't leaving Cleveland again, and Love is unlikely to skip town, either.
Love told Haynes in January that he doesn't expect to decline his $16.8 million option, instead opting for unrestricted free agency in 2016.
"I think that we will figure it out here, so I don't plan on opting out or any of that," Love said to Haynes. "I've said all along that I plan on being a Cavalier long-term."
Unrestricted Free Agents
The recent signing of Kendrick Perkins puts him in a group with Shawn Marion, James Jones and Dellavedova that will hit the open market this summer.
Only one's future is clear: Marion will be retiring following this season. Jones could potentially join him, as the 34-year-old has been sparsely used all year.
Cleveland could have some interest in Perkins, but it will be getting Anderson Varejao back, who it handed a three-year, $30 million extension to last fall. With Varejao, Mozgov, Love and Thompson in the fold, it's hard to imagine a scenario where Perkins stays with the Cavs.
The Cavaliers like Dellavedova, who they signed after he went undrafted in 2013. He's scrappy, plays defense and has a motor that doesn't stop. Fortunately, those are skill sets that can be found quite often. The Cavaliers will want Dellavedova to return, but only at their price. Something in the three-year, $9 million range would be fair for both sides.
Restricted Free Agents
This could be the ugly part of the Cavaliers' offseason.
Both Shumpert and Thompson are coming off their rookie deals and will be looking to cash in.
Shumpert has his eye on the four-year, $42 million extension that Utah Jazz shooting guard Alec Burks received last summer, notes Jason Lloyd of the Akron Beacon Journal:
"A lot of players drafted before and after Burks figured they had accomplished at least as much, if not more, and were entitled to similar paydays. It shouldn’t be much of a surprise that Shumpert approached the Knicks asking for Burks-type money. Multiple league sources with knowledge of the negotiation say Shumpert, drafted 17th overall in 2011, will be seeking an extension this summer that will pay him about $10 million annually.
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Shumpert has come off the bench for the Cavaliers, averaging 7.3 points and 2.6 rebounds on 42.6 percent shooting from deep. On a lot of teams, his strong defense and scoring potential would be worth eight figures. On the Cavs? Probably not.
Griffin will have a tough time deciding just how much Shumpert is worth. Heading into restricted free agency and choosing to match other teams' offers may be the best route to take.
The same goes for Thompson. According to Terry Pluto of The Plain Dealer, the Cavaliers offered Thompson a deal in the four-year, $50 million range last fall, which he shot down.
It's hard to see any team offering the offensively limited forward more than $12 million to $13 million per season. Thompson's true value comes as a rebounder and hustler. His agent is Rich Paul, the same gentleman who represents James and orchestrated his return to Cleveland. One can bet Griffin will be happy to accommodate Paul after what he did last summer.
There's no way the Cavaliers will let Thompson walk, but they'll definitely end up overpaying for his services.
Right now, the Cavs can just enjoy their recent winning ways and focus on the upcoming playoffs. Looking ahead to this offseason, however, Griffin and some of the players will have big decisions to make.
Greg Swartz has covered the Cleveland Cavaliers for Bleacher Report since 2010.
All stats provided by Basketball-Reference.com unless otherwise noted. Quotes obtained firsthand unless noted.
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