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Grizzlies and Larger NBA Offseason Trends

This piece has everything - Cap Holds, the death of the MLE, and my official and all too early Mike Conley contract prediction!

Nelson Chenault-USA TODAY Sports

I've been talking and writing about the offseason a lot lately. I wrote about it here. Joe Mullinax and I talked about it for a while on GBB Live here. And if that wasn't enough, last week I went on Chris Herrington's Pick and Pop Podcast and talked about it more here.

You'd think I'd have exhausted all my thoughts. You'd think I'd be bored writing about stuff still five months away.

Nope. MOAR offseason notes!!! Thinking about the upcoming offseason, and the disruption the exploding salary cap will have in the free agent market, is just too fascinating. I've had a few things percolating in my brain, and I just wanted to get them out.

1). Salary dumps are about to be meaningless, at least for a while - Over the past few years, there has been an incentive for teams to preserve cap space to take advantage of other teams financial mistakes. The 76ers have made the most hay at this, taking the bad contracts of other teams in exchange for draft picks.

But every team in the league is about to receive $20mm in cap space gifted to them, and in that environment, there will be no more need to dump salary for picks.

This was one of the primary mechanisms for teams to rebuild. If you didn't want to - or simply couldn't - use your cap space to sign players, you could always find a secondary use for it down the road. This is just one more reason why teams will spend their money this offseason. With little prospect for salary dumps, and the cap rising again in 2017, there is no opportunity cost to spend this summer.

That opportunity is already mostly gone. Portland and Philadelphia have gobs of cap space right now, and there are at least two teams - Miami and Oklahoma City - with incentive to lower their luxury tax bills. Miami could dodge the tax entirely by trading Birdman into space, and the Thunder could cut theirs significantly by getting rid of Steve Novak.

Watch what happens if and when these players are traded. They probably wont go for anything more than a 2nd round pick or two.

One team with a real impetus to both improve, and dump dead money for the summer, is New Orleans. I've been extremely critical of their moves basically since acquiring Anthony Davis. They have punted on both three draft picks and cap space to acquire Tyreke Evans, Jrue Holiday and Omer Asik.

I think the Pels should be a real player in Free Agency this summer. Unfortunately Asik and his guaranteed $34mm for 4 years (after the end of this year)  puts a crimp in that plan. Some smart team should offer a middling player in the last year of their deal, particularly a small forward, making about $9mm, to see if the Pelicans would sell their 1st round draft to take Asik off their hands.

This move would cost another pick, but would also allow the Pels to be serious players for Nicolas Batum, and all of the restricted guys. Even if they strike out, they'd maintain the option of retaining either that small forward or Ryan Anderson while still having some powder left in the keg to shop for other value in the Free Agent Market. After all, only one team in the league can offer the chance to play with Anthony Davis.

2). The Mid-Level Exception is Dead - There are only a handful of teams that will function over the cap - Cleveland and OKC when they re-sign Lebron and Durant respectively, and probably Golden State. For most of the rest of the league, agents won't be seeking $5mm MLE money because only teams operating near or above the cap keep their exceptions.

This specifically impacts Memphis, a team that has operated above the cap since the Core Four arrived.

Last season, the only tool Memphis had to add talent was the Mid Level Exception, and they did well to attract a player like Brandan Wright.

In years past, free agents that wanted to go to good teams had to take the MLE. But if a Free Agent wants to go to, say, Memphis, there is now more room to bargain, particularly because most of the teams that make the playoffs stand to have serious cap room as well.

To attract talent away from a good team offering $7mm, you better be able to offer a better situation (and that better be important to the player) or more money.

This is, very simply, how a $5mm player becomes "worth" $7mm, and how that player "worth" $7mm, actually makes $9mm. Every team has more bullets in the chamber.

Every contract is a smaller fraction of the salary cap. As a percentage of the cap, the $5mm mid-level exception that Brandan Wright is on had the same buying power last summer as $7.9mm will have in 2017.

With that said, Matt Barnes presents a very interesting potential case. He seems like the type of player who will want to play for a winner, and would fit really well particularly with Cleveland or OKC - provided he fit with the Thunder's long-hallowed culture that includes Dion Waiters and Enes Kanter. Culture or no, both teams will only have the MLE this summer.

If Memphis wanted to keep Barnes away from either of those two teams, in theory they'd just have to beat the MLE. But they also aren't prohibitive favorites for the Finals, like Cleveland is. They don't offer as good a situation.

Also, in a perfect world, you wouldn't sign a 34 year old player to a 3 or 4 years deal. So you have to offer another carrot to Barnes to take fewer years, and since you can't offer a better chance at a ring, you again offer more money.

This is how - gird your loins - Matt Barnes might get a 2 year $16mm-20mm total contract, particularly if the 2nd year is only partially guaranteed.

3). Memphis Free Agents Not Named Conley - I've been talking a lot about cap holds lately. Every free agent has a cap hold, somewhere between 150% -190% of his prior season's salary. Plugging in a cap hold for Conley, who the Grizzlies obviously want to retain, Memphis has around $22mm - $24mm in cap space, enough to offer any restricted free agent a max contract, and almost enough to offer unrestricted free agents the larger max (around $25mm).

But in order to use all of that cap space on one player, the Grizzlies must renounce all of their other free agents - Courtney Lee, Mario Chalmers, Matt Barnes, and Jeff Green. Said another way, if Memphis wants to retain any of their non-Conley Free Agents, that $22mm-24mm is really more like $12mm.

4). But Wait, There's More - The actual mechanism to sign a restricted free agent - a player coming off their rookie deal - is something called an "offer sheet." Signing a restricted player to an offer sheet allows the incumbent team the chance to match your offer, and they can retain their player for the exact terms you are willing to pay.

But when a player signs an offer sheet, you actually have to clear the space required to sign that player.

So if you want to offer, say, Harrison Barnes his max, you can do that, but first you need to renounce all those wing guys we just talked about. And then you get to sit on your hands for three days while the Warriors decide whether or not they want to match that salary, which they almost definitely will.

In the meantime, not only can your free agents go out and get other deals, but you also have to renounce their Bird Rights, meaning if you lose out on Harrison Barnes, you have to use cap space to sign them.

And the hard truth is that that $22mm doesn't get you what it used to. It gets you probably two of Jeff Green, Chalmers, Lee, or Barnes. Retaining all of them likely costs upwards of $30mm and locks the Grizzlies into this declining version of themselves for the rest of Gasol and Conley's great years.

{EDIT: Because the CBA is fun and not at all confusing, we have a Mea Culpa here. A team can actually reclaim Bird Rights on their Free Agents if the Restricted Offer Sheet is matched. This means you can again return to your prior situation like nothing happened and go over the cap to sign your own FA's. This is nice, but perhaps means little next summer. Courtney Lee and Mario Chalmers and their agents will move on, and will have three days to look for another deal while Memphis waits on if the offer sheet is matched. Still, it is nice to know that there may be a path to reclaiming these guys if an offer sheet does not work out}

As such, a scenario where you shoot and miss on a max level restricted free agent probably means the end of the Grizzlies making the playoffs, and losing one or two lottery picks along the way.

5). Back To Conley - The question of whether Conley is "worth" the max is moot. Conley can get the max if he wants it. He can get the max from Memphis if he wants it. He can get it from another team if he wants it. In a free agent market where 80% of the league will have $25mm in cap space, and Conley is the best point guard available, he might as well be one of those Dothraki dudes.

For Memphis to use that $22mm in cap space to bring in new talent, they'll need to take advantage of Conley's lower $15mm cap hold. Which means they need to sign him last.

Which means they need Conley to wait.

This is why I think he will get his max. If Conley takes less, not only is he taking less than another team will offer him, but he is also being asked to wait while Memphis takes care of other business before he signs.

In the meantime, free agent dollars will be spent. The good teams will use their cap space trying to stay good. The plausible destinations for Conley will begin to dry up.

This type of loyalty demands the max.

And still, I don't think he gets his max, which would start at $25mm and have 7.5% raises every year for five years. My official prediction is that his starting salary will start at $25mm, but will reduce every year for five years by 4.5%.

This type of deal makes sense for both sides. Conley gets his max, and his deal reduces by a not insubstantial amount while he ages. Memphis can afford to pay him $25mm this year, as they will do so once they are over the cap.

And here's the thing. Once the cap jumps another $20mm in 2017, if Conley's salary decreases at all, it will look a lot more palatable. If Conley were to start at $25mm, and take just a 4.5% decrease, that $23.8mm in 2017-2018 would translate back to just $15.3mm in today's dollars.

This is the part where all Grizz fans nod their heads.

And that's my prediction: Conley gets a 5 year, $114,141,331 deal, starting at $25mm, and declining 4.5% every year.