Lost in recent discussions of a looming trade or the best available free agents is a third path: the Clippers can prioritize flexibility this week, leaving themselves with avenues to access room under the hard cap to add salary in a deal at the trade deadline or sign rest-of-season contracts. There’s no guarantee that desired upgrades will become available mid-season, but if the Clippers are uninspired by their remaining options in free agency it would make sense to wait and keep money open for potential later moves.
The Hard Cap
The decision to use the non-taxpayer mid-level exception on Serge Ibaka effectively hard caps the Clippers, meaning that at no point can their team salary for next season exceed $138,928,900. For now, while Ibaka remains technically unsigned, the team is able to go over that threshold if necessary–but they’d have to get back under it in order to sign him, and stay under it from that point on.
If my projections–which include a rookie minimum deal for Daniel Oturu, a veteran’s minimum deal for Patrick Patterson, the release of Joakim Noah’s non-guaranteed deal, the full MLE for Ibaka, and a 4-year deal for Marcus Morris that would pay him exactly the reported $64M with maximum annual raises–are correct, then the Clippers have about $5.2M of effective wiggle room underneath the hard cap for 12 players. If you consider Ky Bowman likely to make the roster, they have just under $3.8M–though they can cut him at any time, even after the season begins.
Some notes on the hard cap:
- Roster Size: The team is required to roster 14 players during the regular season, excluding two-way contracts. They can temporarily drop below 14, but there is a two-week limit before they must add another player to get back to the 14-player threshold, and they must remain at that threshold for two weeks before being allowed to potentially drop below it again.
- Trades: When a mid-season trade is agreed to, the entire salary of the incoming player is added to your cap sheet and the entire salary of the outgoing player is removed. For example, trading Lou Williams’ $8M deal for George Hill’s $9.6M deal would add $1.6M to the Clippers’ books whether the deal is executed now or at the trade deadline–they would not receive hard cap savings because they only have the higher salary for half of the season. The flip side is that the team can shed money this way–last year, they kept Derrick Walton Jr. on the roster for over half of the season, and then paid the Atlanta Hawks to eat his contract for nothing via mid-season trade. The entire cap hit was removed from the Clippers’ books.
- Minimum Contracts: The two-year veteran’s minimum is $1,620,564. All players with two or more years of experience signed to one-year minimum contracts (more on this in the next section) are paid this amount by the team. Additionally, rookies or players with one year of experience have this number as their cap hit, even though their actual salary is lower. This is to prevent teams from passing over veterans for the hard cap savings presented by the lower rookie minimum. The exception is for players signed as draft picks–which is why Oturu (33rd in 2020) and Mann (48th in 2019) have hits lower than the vet’s min. If the Clippers were to sign Amir Coffey–or indeed, Ky Bowman–to a minimum-salary deal, they would carry the $1.62M hard cap hit as a free agent.
- Exceptions: The Clippers’ TPEs and BAE do not count as cap holds against the hard cap, meaning that LAC can hold on to them for later use.
- The Math: Based on those details, it seems pretty straightforward: with their $3.8M under the hard cap after cutting Noah, the Clippers can sign two more players to minimum deals. Due to Bowman’s contract being non-guaranteed, they could bring in additional non-guaranteed deals to training camp to compete for the final roster spot(s).
- Summer Contracts and Exhibit 9: “But Lucas, if the Clippers sign multiple non-guaranteed contracts won’t that take them over the hard cap?” Not exactly. Players who are signed to “summer contracts” that have no salary protection do not count against the hard cap until they actually make the opening night roster and begin being paid. Technically, LAC could sign 5 players to summer contracts on non-guaranteed minimum deals–pushing team salary well above the hard cap–and as long as they released enough of them before opening night to bring team salary below the hard cap, they’d be in the clear.
Typically, however, there is some risk associated with this strategy. When a player gets injured in training camp, and the team cuts him, they’re on the hook for his full-season salary. The last thing the Clippers need is to have a random undrafted free agent who came to training camp cost them $1.6M against the hard cap because he pulled a hamstring in practice. Teams use Exhibit 9 in player contracts to relieve this salary obligation. However, Exhibit 9 is only applicable to one-year minimum salaries. Typically, you would apply it to deals for undrafted free agents like Jordan Ford and Malik Pitts, but a “priority” non-guaranteed guy like Ky Bowman is likely to have a second non-guaranteed season on his contract to extend the team’s ability to keep him around on a cheap deal if he has a breakout year, making him ineligible for Exhibit 9.
The Veteran’s Minimum
As discussed above, the veteran’s minimum means that all free agents (not draft picks) signed to one-year minimum deals have a cap hit of $1.62M. In terms of actual salary, players make more or less based on their years of experience (a full table is available on Larry Coon’s website). For example, Patrick Patterson, who has over 10 years of NBA experience, will make $2,564,793 next season, but only count as $1,620,564 against the Clippers’ hard cap (the difference is paid by the league, not the team).
Note that this only applies to one-year deals. The Lakers recently signed Marc Gasol to a minimum deal, but a second guaranteed season was added to his contract. That increased his hard cap hit to the higher $2.6M number, forcing the Lakers to trade a second-round pick in a money-saving deal where they dumped JaVale McGee’s contract. Given the Clippers’ limited hard cap wiggle room, this has to be considered carefully on a player-by-player basis. If Glenn Robinson III, one of the better remaining free agents, demanded a second-year player option if he were to accept a minimum deal, his cap hit would be $2,028,594 instead of $1,620,564 due to his 6 years of NBA experience. That extra $400k is certainly affordable within the Clippers’ wiggle room if they choose to sign Robinson, but it’s an important factor.
This creates an advantage for signing younger players–potentially extending team control. Take, for example, new Clipper Ky Bowman. Because Bowman only has one year of NBA experience, there’s no difference between his hard cap hit on a one-year minimum deal and a two-year minimum deal. The Clippers can give him the second season without any repercussions–and if they like him enough that he sticks around for both years, he’ll even be eligible for restricted free agency. Derrick Walton Jr., who has two years of NBA experience, would also have the same cap hit on a one-year minimum deal as on a two-year minimum deal. But a slightly more experienced depth point guard, like Shabazz Napier, who has 6 years of NBA experience, adding a second season would cost the team $400k.
Non-Guarantees, 10-Days, Two-Ways, Rest-of-Season Deals, and the Bi-Annual Exception
If the Clippers choose to conserve as much of their $5.2M in wiggle room for mid-season transactions as possible, they can do so through a variety of mechanisms. We’ve already seen them utilize a non-guaranteed deal for Bowman, and if they do indeed choose this avenue I doubt he’ll be the only one. They also have two two-way players, and later in the season can sign 10-day contracts and rest-of-season deals to save money against the hard cap.
- Non-Guaranteed Deals: When a player has a guaranteed contract, cutting them doesn’t really do anything for your cap sheet–it only clears a roster spot (the exception is if the player’s contract is claimed off of waivers by another team). When a player has a non-guaranteed contract, you can cut them and only owe them for the days that they actually played for you. Since the upcoming shortened season is projected to be 146 days long, that means a player on a non-guaranteed $1.62M deal will hit the cap for about $11,100 every day they’re on the team. Let’s say that the Clippers have a shooting guard sprain an ankle in training camp, and they choose to keep a non-guaranteed camp player around for the first two weeks of the season for depth. He’d make $155k for those 14 days, and then the team could cut him without owing him the balance of his contract. As a result, he only eats up a small fraction of a regular minimum deal’s worth of LAC’s hard cap wiggle room.
Players can also be cut, and then signed again, over and over as long as they keep agreeing to new deals. They also have to sit on waivers for 48 hours every time that they’re cut, where they could be claimed by another team if they’re playing well. Let’s say the Clippers carry 14 players on their roster this season. They could potentially sign a G-League wing, like Malik Fitts, to a non-guaranteed deal in their 15th spot when Kawhi Leonard sits out a game for load management. He’d be on the roster for one day for garbage time or injury insurance, and then they could cut him after the game. He’d make his $11k for the day (not a bad deal when a standard G-League contract pays $35k for the entire season), clear waivers 48 hours later, and be available next week when the Clippers need a one-night depth piece again on their next back-to-back.
The downside of these arrangements is that once a player is cut, his cap hit–whether $155k for a two-week stint to start the year, or $11k for a one-night appearance, or any other amount–is stuck on your books. If the Clippers sign, cut, and re-sign Malik Fitts ten times next year, that $110k isn’t going away. But as I mentioned above, trading a player can totally remove their cap hit from your books. Let’s say Fitts (Malik is just an example as a wing who LAC will have in training camp) is on the roster for the first two weeks of the season and counts as $155k against the hard cap. Then, the team cuts him, but two weeks later they have an injury and end up bringing him back. They keep him until the deadline, when they give another team cash to absorb his deal. His second contract with the Clippers, pro-rated to not include the 28 days of the season that passed before he was signed, only has a hit of about $1.3M–and that comes off the books when he’s traded. The $155k from his first stint stays.
In a normal season, all non-guaranteed contracts become guaranteed for the rest of the season on January 10th. This year, due to the adjusted schedule, I believe that the cut date is February 27th. At that point you either have to cut your non-guaranteed deals, trade them to someone else (who can cut or keep them), or allow them to become guaranteed (you can still get off the cap hit later by trading them, as the Clippers did with Walton last year).
- 10-Day Contracts: After February 27th, you can no longer sign non-guaranteed contracts. Instead, the 10-day contract period begins. Players are eligible for 10-days as extended tryouts, still paid the same $11k per day to bring the cap hit for each 10-day to $110k. These contracts can’t be traded, so you’re basically just eating the $110k in hard cap wiggle room if you use one. Each free agent is eligible for two 10-day contracts before they must be signed to a rest-of-season deal to continue playing for your team. Let’s say the Clippers are using a guy like Fitts for a role like depth on load management nights while they bide their time until buyout season. They can sign him to the aforementioned series of one-day contracts mentioned above up until February 27th. They could then bring him in on one or two 10-day contracts to bridge the gap between then and buyout season, which will happen in March after the trade deadline.
They’d have to eat the money for the days Fitts is on the roster–let’s say 10 one-day deals and two 10-day contracts totaling $330k–but would still leave open most of their wiggle room to either add salary in a trade or sign rest-of-season deals.
- Two-Way Contracts: Players on two-way contracts have some special rules for the 2021 season. They’re allowed to spend 50 games on the active roster, up from the typical 45, and they’re paid a flat rate of $449,115 instead of the typical system that pays them based on the number of days they spend with the NBA and G-League teams. Two-way contracts have no cap hit, so Amir Coffey and Jayden Scrubb won’t contribute to the Clippers’ hard cap difficulties.
I’m considering Scrubb, the 55th pick overall who came straight to the NBA from junior college, essentially a redshirt player (that’s fine–let’s give him time to develop with LAC’s new staff). Coffey, however, looked serviceable in depth minutes last season and figures to be a part of LAC’s third string this season. Last year, Amir played in 18 games in his role. Even with an increase this year, the 50-game cap should pose no issue for the Clippers.
There’s one more little rule that could come into play: teams are limited to 80 total active roster appearances by two-way players on nights when they only have 14 NBA contracts on their roster. To explain that as succinctly as possible, if Coffey and Scrubb are both active for the same game, it counts as 2/80 appearances. However, if the Clippers were to sign Fitts to a contract in the 15th roster spot and pay him his $11k for the night, Scrubb and Coffey could both be active and not count towards the 80-appearance cap–even if Fitts is on the inactive list.
Two-way contracts can also be converted to rest-of-season deals, and the team and player can negotiate multiple additional seasons. If the Clippers don’t fill all of their roster spots in buyout season, and Coffey plays well in a depth role on his two-way contract, look for the Clippers to convert him to a full NBA contract late in the season with additional non-guaranteed years on his contract.
- Rest-of-Season Contracts: When a player signs a contract mid-season, their salary is pro-rated for the days remaining in the year. For example, last season Reggie Jackson and Joakim Noah made $734,025 and $434,704 on their rest-of-season deals, respectively.
That means that if the Clippers sign a minimum deal at the start of March–73/146 days through the season–it would only count as $810,286 against the hard cap compared to $1.62M for signing a minimum deal now, before the season begins. That margin buys them a little bit of breathing room if they do end up adding a little salary in a trade or needing to make other cap-negative deals (theoretically, if a deep-bench guy gets a season-ending injury after his contract has been guaranteed and you can’t dump his cap hit because the trade deadline has passed, you’d like to be able to cut him and replace him).
The pro-rating also helps them save money on Coffey, even if they plan on using him for all 72 of their games this season. He could use his 50 allowed two-way appearances in the team’s first 50 games while counting as $0 against the hard cap, and then be converted to a rest-of-season deal to appear in the final 22 games. While we don’t know exactly how much the hard cap would be for that deal because we don’t know how many days LAC’s last 22 games will cover until the schedule comes out, but it would be closer to $500k compared to the $1.6M cap hit of putting him on a full minimum deal from opening night. That’s $1.1M in hard cap savings with no negative impact on Coffey’s availability to help the team and only an opportunity cost of not signing a different player to his two-way slot.
- The Bi-Annual Exception: The Clippers have their bi-annual exception this off-season, worth $3,623,000. But they don’t really have space to use it underneath the hard cap. With Bowman’s non-guaranteed deal, the Clippers are just $924,218 under the hard cap. Once they cut Joakim Noah, that number will be $3,617,209–just under the bi-annual exception. Sure, the Clippers could just sign someone for $6k less, but they would be at the hard cap for 14 players, without room to even sign someone to a 10-day contract unless they eventually moved money in trades. And if the signing doesn’t work out, the BAE would be substantially harder to dump for nothing mid-season than minimum deals.
If the Clippers opt not to use their BAE this week, they can still use it mid-season. Like minimum rest-of-season deals, the value of the BAE pro-rates as the year goes on. So a player signed using the BAE 73/146 days through the season would make $1,811,500 for the second half of the season. That hard cap hit is much more affordable for LAC’s purposes, leaving them flexibility to play with the 15th roster spot or take back a little extra money in a trade.
For a veteran with 10 years of experience on the buyout market, a rest-of-season minimum deal for half of the year would pay him $1,282,377 with a cap hit of $810,286. Offering $1,811,500 could put the Clippers in the driver’s seat to land whoever their preferred target is. For players with less than 10 years of experience, the cap hit of a minimum deal stays the same but the actual salary decreases, making the disparity between min and BAE even larger.
The BAE, like the minimum, can also be used to offer a contract for up to two seasons–but the BAE is worth a lot more in year 2 than the minimum is. The Clippers could add up to $3.8M in salary for 2021-22 to a buyout season addition, potentially making it a team or player option as well.
Okay, let’s put what we’ve learned into action. First, the Clippers cut Joakim Noah. Then, they wait for Charlotte to waive Nicolas Batum (I’m guessing Batum is their priority over free agents Glenn Robinson III and Rondae Hollis-Jefferson, based on the fact that they haven’t moved on those guys yet) and sign him to a fully guaranteed veteran’s minimum contract to be their backup small forward. They invite a number of players on summer contracts to training camp, but Ky Bowman wins the 14th roster spot. Spot 15 stays open heading into the season.
On opening night, for 14 players, you have $1,996,645 in room underneath the hard cap. Let’s say that, whether it’s Fitts or a different wing or a player at a different position, the Clippers use a series of short-term minimum deals for players to provide depth support for injuries or load management–20 days in total. Then, when the league switches over from non-guaranteed deals to 10-days on February 27th, they use two 10-day deals to fill the 15th spot while the buyout market materializes. Ky Bowman is kept past February 27th, allowing his contract to become fully guaranteed, but traded with cash before the deadline, removing his $1.6M hard cap hit.
The Clippers would have now spent around $440k on the rotating 15th man, but saved the $1.6M on Bowman’s deal. They enter the deadline/buyout market with 2 open roster spots and $3,177,209 in hard cap wiggle room. By the deadline, the Clippers have assessed their point guard position and decided they want to go after Oklahoma City’s George Hill (clearly, Bowman didn’t perform well enough for the team to feel confident with his abilities in a playoff setting, as they traded him). They can swap Lou Williams and future 2nds for Hill, adding $1,590,602 to their team salary. Williams stays on the team for most of the season, helping them with his regular-season scoring abilities, but Hill comes in at the deadline as a more steady, defensive-minded alternative to Patrick Beverley for the playoffs. Now, they enter buyout season with $1,586,607 in wiggle room and two open roster spots.
Typically, a player has to clear waivers with his original team by March 1st to be playoff-eligible for a new team–this year, that date is April 9th. The aforementioned ten-day contracts can help the Clippers bridge the gap between the trade deadline and April 9th without going more than 2 weeks with fewer than 14 players on the roster. If the Clippers use their BAE on April 9th, they would have that player for 38 regular-season days, resulting in a cap hit of $942,973. The remaining roster spot and $643,634 remaining under the hard cap is the perfect amount for the Clippers to sign a second player on the buyout market to a rest-of-season minimum deal in their 15th spot. If no such target emerges, they can convert Coffey’s contract to a multi-year non-guaranteed minimum in the slot.
Overall, it’s unclear if all the hand-wringing about the hard cap is worth it. Will a player that comes available in March or April be significantly better than the fringe free agents who remain available now? It’s possible, but certainly not guaranteed. Last season, the Clippers’ buyout season prize was Reggie Jackson. I’m unconvinced that he helps you more than Shabazz Napier, who you can get right now for a full-season minimum deal without worrying about the uncertainty of player availability mid-season or onboarding a new player without training camp. But as the Clippers continue to drag their feet on filling out the roster, seemingly waiting for something, it becomes increasingly likely that what they’re really waiting for is the trade deadline.
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