The NBA Salary Cap is a complex and ever-moving piece of the sport we all love dearly. The salary cap is an essential piece for league parity and existence of small markets. In Major League Baseball, there is no salary cap, therefore teams like the Los Angeles Dodgers and New York Yankees have been known to pay all the big stars and have payrolls double that of teams like the Tampa Bay Rays and Oakland Athletics.
For the National Basketball Association, a level playing field in terms of dollars allows for places like Oklahoma City and Memphis to have teams and be successful. So let’s take a dive into the salary cap and how Memphis is building their team within its confines.
One of the biggest issues of the salary cap is that it is calculated by multiplying projected Basketball-Related Income (or “BRI”) by 44.74%, less projected player benefits (like health and welfare benefits), and then dividing the result by 30 (the current number of NBA teams) — according to the CBA. This ultimately means that the projection could be wrong, and the cap be lower or even higher.
The 2021-22 Salary Cap Maximum is $112,414,00. As the Grizzlies roster currently stands, Memphis has $300k in dead money, $114,715,766 in Active Salary and due to the renouncing of rights to Tyler Dorsey, $0 in cap holds. The dead money is money owed to Jontay Porter after he was cut from the roster.
Memphis is currently over the salary cap limit, but possesses a Room Mid Level Exception of $4.9 million. Were the Grizzlies front office to use that MLE, they would still be well below the Tax Payer Salary Cap Limit of $136,606,000. Due to the current state of the roster, it is probably safe to assume Memphis will not be using its MLE this offseason.
There are only 15 NBA roster spots per team, and only 13 players can be active per game night. The Grizzlies currently roster 18 guaranteed NBA contracts and one Exhibit 10 contract. It can be rightfully anticipated that the Grizz will convert Yves Pons’ Exhibit 10 contract into a deal with the Memphis Hustle, if not giving him McDermott’s 2-way contract. Therefore, Memphis has to rid themselves of 3 roster spots via trade, buyout or waiver.
It is important to view the movement this offseason as Player A making [blank] amount of money rather than who Player A is and how he fits with the Grizzlies. The reality is that none of the names moving around after Steven Adams are going to crack the rotation in Memphis. Zach Kleiman and company are jockeying for financial flexibility, similar to trading Chandler Parsons’ massive contract for two easier to move/waive contracts.
Teams with a big enough TPE to take Rajon Rondo in with a clear-ish fit:— Parker Fleming (@PAKA_FLOCKA) August 16, 2021
The first obvious and expected move for Memphis is to trade or buyout Rajon Rondo. As GBB’s Parker Fleming mentioned in his tweet above, there are some teams that Rondo would provide immediate value for that have a Traded Player Exception to absorb his contract. The homerun move in my eyes is a reunion with Boston into the Evan Fournier TPE. However, that would be a waste of that TPE as it is valued at 10 million more than Rondo’s contract. The Brooklyn Nets, on the cusp of a title run given health, would be another excellent location for Rondo. They have an $11 million TPE created by the Spencer Dinwiddie sign and trade with the Washington Wizards. In any move, Memphis would be happy to take back a future second round pick or two.
Simply moving Rondo into someone’s TPE brings Memphis to almost six million below the salary cap limit, making them the only team in the NBA in that category.
Juan Hernangomez, due to the roster presence of Jaren Jackson Jr, Xavier Tillman, Brandon Clarke and Santi Aldama, is another candidate to move into a team’s TPE or buyout. A trade into someone’s TPE puts Memphis at almost 13 million below the salary cap this year. Finally, it is probable that Daniel Oturu is the player that is waived and unless someone claims him, the Grizzlies will just eat his $1.5 million for the season.
In all of this, Memphis took a similar approach as last season — trading a veteran player that will have no role with this team long term for a younger player with potential. Swapping Patrick Beverley for Jarrett Culver is this season’s Andre Iguodala for Justise Winslow swing. There is little to no consequence for the swing and is a great money move for Memphis breaking Beverly’s contract into two very moveable pieces.
Down to 15 players on roster and operating with a potential 13 million dollars of cap space, what could the Grizzlies do next? In the world of obtaining as many assets as possible in a small market, the Memphis Grizzlies are in position to either take on the next disgruntled star without the pressure to make salaries match, or take on a Dion Waiters type bad salary with assets attached, such as a young player or picks.
For example, Toronto could hold onto to Dragic until the deadline, and Memphis could determine that Culver was not going to be in the plans. Memphis could then send Culver for Dragic and picks in a move that works for both parties. (Purely hypothetical). Maybe the Indiana season is going south again, and Brogdon decides he wants to relocate. Memphis could send Tyus Jones, the Utah 2022 first rounder, and the Lakers 2022 first rounder to Indiana without having to do more to match contracts. (It may take more picks or another player, again, purely hypothetical.)
The point is that rather than Memphis trading for players this offseason to create more rotational logjams, they have moved money in a way that has created financial flexibility immediately.
Cutting ties with the Justise Winslow option and the dead money of Gorgui Dieng, Dion Waiters, Marko Guduric and Mario Hezonja has made this possible. Moving Jonas Valanciunas, whose extension would likely cost more than the price of Steven Adams next season, is nifty — as is the Grayson Allen for Sam Merrill swap. Remember, sometimes it’s about the contracts and not the names. The creativity of this front office is mesmerizing as they play chess with the league.
In part 2 of this salary cap exploration, I will dive into what these moves do for the Grizzlies over the next few seasons.