AP Explains: Making sense of NBA free agency dollars
NEW YORK (AP) — Between the LeBron James guessing games and the Kawhi Leonard trade talk, it seems NBA shopping season is well underway.
It’s actually just about to start.
Terms like salary caps and contract options have been in the news for weeks, so fans might have an understanding of what they all mean. For those who don’t, here’s an attempt to explain how this all works.
Q: When does free agency start?
A: It begins at 12:01 a.m. EDT on July 1. So that’s early Sunday morning for teams in the East, but Magic Johnson and the Lakers can actually start their recruiting on Saturday night.
Q: When can deals start happening?
A: Players and teams can agree to contracts immediately, but except for some limited exceptions, such as rookies inking their initial contracts, nothing can be signed until after the free agency moratorium period ends, which is noon EDT on July 6.
Q: How is the salary cap determined?
A: It’s basically a formula based on basketball revenues. Last season’s was $99.1 million, and this year’s will be announced Saturday.
Q: Why is James a free agent when he had a contract for next season?
A: His $35.6 million salary for 2018-19 was a player option. He chose not to take it and became a free agent instead . Same thing with Paul George, who opted for free agency instead of the $20.7 million he was due in Oklahoma City next season, and Kevin Durant, with an option for $26.3 million in 2018-19.
Q: Does any team have a chance to sign them?
A: Not really. Teams either need to be under the salary cap, or use some of the various exceptions that allow teams to exceed it (for example, to re-sign their own veteran free agents). There are exceptions allowing teams to spend even if they are over the cap, or above the luxury tax line, but those are not big enough to afford a top-level player.
Q: Any other ways for players to become free agents before their contract expires?
A: Yes, sometimes they have an early termination option. Carmelo Anthony could have gone that route, but decided to keep his contract, which plays him $27.9 million next season, intact.
Q: Besides James and George, who are other big-name free agents?
A: Chris Paul, DeMarcus Cousins, Isaiah Thomas, Tony Parker, J.J. Redick and Derrick Favors are all unrestricted options that could draw interest. There are also players such as Jabari Parker, Aaron Gordon, Zach LaVine and Marcus Smart, but they are restricted free agents and their current teams would be allowed to match any offers they receive and keep them.
Q: Are most teams far enough under the salary cap to really improve themselves?
A: No, there are many more that are already over it or up against it. But the Lakers have slashed enough payroll to position themselves to afford James and another maximum-salary player.
Q: How far over the cap can teams go?
A: Depends on how much they’re willing to pay for it. There is a tax line (last year at about $119.3 million) and teams begin incurring a penalty once they reach that. It gets pretty severe depending on how far and how many years in a row they are over it.
Q: How does Leonard fit into all this?
A: He’s under contract two more seasons but apparently doesn’t want to wait for free agency, telling the San Antonio Spurs he wants to be traded even though he could cash in big by waiting and re-signing there. Teams that can’t afford a marquee free agent can try to entice the Spurs with a trade package for the 2014 NBA Finals MVP.
Q: Will things settle down once most of the signings are finished?
A: Not entirely. Though deals can start to be finalized on July 6, that doesn’t mean free agency will end when the moratorium period ends. And talks never really stop in the NBA offseason. Last year it was Kyrie Irving asking to be traded from Cleveland and the Knicks trying to move Anthony that lasted deep into the summer, so count on something coming up.
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