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Phoenix Suns Cap Situation 2012: How Should We Spend Our Money?

The allure of copious cap space has mollified anxious Suns fans during the last two less than stellar seasons by offering them the opportunity to indulge in quixotic musings involving the likes of D12 and DWill in purple and orange. But in order to woolgather, one requires wool. So exactly how much wool, err cap space, are the Suns going to have?

For a while now, I have seen people bandying around different impressions of exactly where the Suns payroll number will be this summer. Some have been general, some have been more discrete. I decided to conduct my own research to try to solve the arcanum of the Suns cap space. There are, I’m sure, luminaries on this forum that are well versed in the nuances and minutiae of the salary cap, however, I’m sure that there are others who still see it as somewhat nebulous and esoteric (like me) and could use a pellucid expatiation to provide clarity to exactly where things stand.

The intended purpose of this analysis is to provide information that can be a useful reference tool. Therefore, in a slight departure from my usual predilection, I will aim to keep the remainder of this post as limpid and laconic as possible (I’m sure that drew at least one cheer). I also apologize in advance if anything I report is erroneous. Please feel free to fact check my work.

Frolic forward my friends.

First some vocabulary - I know I generally write in pretty transparent terms, but some of these words are not clearly defined in everyone’s mind.

Most of the research performed for this write up was done on Larry Coon’s Salary Cap FAQ and ShamSports.com.

Salary cap – This is the limit a team can spend on contracts for players, but of most importance for this discussion, free agents. With the soft cap system, there is a buffer between the cap and luxury tax. The Suns can take advantage of this to create more cap space by using their exceptions. The 2011-12 salary cap is 58,044,000. The salary floor (80% of the cap) is $46,435,200. The luxury tax is $70,307,000. The 2012-13 limits will not be set until July, but I have seen reports ranging from $60-61 million. I will use $60,000,000 for the purpose of this analysis.

Renounced Players – A team renouncing a player surrenders their ability to use the Larry Bird, Early Bird, or Non-Bird exceptions to re-sign that player. Renounced players do not count towards a team’s salary cap. A renounced player can still be re-signed, but the team must have money to do so under the cap, or use a minimum salary exception.

Cap Holds – These basically make a team’s free agents still count against its cap number. That way a team can’t circumvent the rules and sign other free agents, then go over the cap to re-sign their own free agents.

Draft Pick Cap Holds - A team’s unsigned draft pick counts against its cap number. This number will range depending on where they pick. For 2011-12, it ranges from $4,286,900 for the #1 pick, to $1,963,600 for the #9 pick, to $1,519,400 for the 14th pick. This would be the cap hold number, but according to Sham Sports, rookies generally receive 120% of this number.

Minimum Salary Exception – A team can sign players over the cap using their minimum salary exception. Since the cap will be set below the luxury tax level, this assumes the Suns will be willing to spend above the cap as long as they are below the tax threshold.

Amnesty – This clause allows a team to waive a player and clear his contract off their books so it doesn’t count against their cap number. This can be done during the offseason, not during the season. The player must still be paid.

Tables via ShamSports (Warrick/Morris 13/14 and Morris 14/15 – team option, Gortat/Dudley final year – player early termination option, Childress/Frye final year – player option, Lopez/Morris final year – qualifying offer):

Player

2011/2012

2012/2013

2013/2014

2014/2015

2015/2016

2016/2017

Total

Steve Nash

$11,689,062

N/A

N/A

N/A

N/A

N/A

$11,689,062

Marcin Gortat

$6,790,640

$7,258,960

$7,727,280

N/A

N/A

N/A

$21,776,880

Grant Hill

$6,500,000

N/A

N/A

N/A

N/A

N/A

$6,500,000

Josh Childress

$6,000,000

$6,500,000

$7,182,500

$7,317,500

N/A

N/A

$27,000,000

Channing Frye

$5,600,000

$6,000,000

$6,400,000

$6,800,000

N/A

N/A

$24,800,000

Jared Dudley

$4,250,000

$4,250,000

$4,250,000

$4,250,000

$4,250,000

N/A

$21,250,000

Hakim Warrick

$4,000,000

$4,000,000

$4,000,000

N/A

N/A

N/A

$12,000,000

Mickael Pietrus *

$3,828,351

N/A

N/A

N/A

N/A

N/A

$3,828,351

Shannon Brown

$3,500,000

N/A

N/A

N/A

N/A

N/A

$3,500,000

Vince Carter *

$2,881,098

N/A

N/A

N/A

N/A

N/A

$2,881,098

Robin Lopez

$2,862,602

$4,001,917

N/A

N/A

N/A

N/A

$2,862,602

Markieff Morris

$1,919,160

$2,005,560

$2,091,840

$2,989,239

$4,134,118

N/A

$9,005,799

Sebastian Telfair

$1,500,000

$1,567,500

N/A

N/A

N/A

N/A

$3,067,500

Ronnie Price

$854,389

N/A

N/A

N/A

N/A

N/A

$854,389

Michael Redd

$826,828

N/A

N/A

N/A

N/A

N/A

$826,828

Garret Siler *

$73,761

N/A

N/A

N/A

N/A

N/A

$73,761

Total salaries:

$63,075,891

$31,582,020

$31,651,620

$21,356,739

$4,250,000

$0

$151,916,270

Total w/o options

$63,075,891

$31,582,020

$17,832,500

$4,250,000

$0

$0

Player

2011/2012

2012/2013

Notes

Steve Nash

-

$17,533,593

150% of previous salary

Grant Hill

-

$9,750,000

150% of previous salary

Robin Lopez

-

$7,156,505

250% of previous salary

Shannon Brown

-

$4,200,000

120% of previous salary

Ronnie Price

-

$854,389

Two year veteran's minimum

Michael Redd

-

$854,389

Two year veteran's minimum

Aaron Brooks *

$5,041,730

$5,041,730

250% of previous salary

Jalen Rose *

$1,851,103

$1,851,103

120% of previous salary

Gordan Giricek *

$854,389

$854,389

Two year veteran's minimum

Eric Piatkowski *

$854,389

$854,389

Two year veteran's minimum

Total cap holds:

$8,601,611

$48,950,487

Total amount of all them cap holds.

Total salary inc. cap holds & options:

$71,677,502

$80,532,508

Total salary if all options are exercised, including cap holds.

$31,582,000. That’s the starting point. That doesn’t include Lopez’s salary. It assumes he has been renounced. It would also assume the Suns renounce all of their cap holds (bye Brooks). The Suns would have 7 players under contract – Gortat, Childress, Frye, Dudley, Warrick, Morris, and Telfair.

Telfair – Only $550,000 of the second year of his contract is guaranteed. The Suns can waive him within 7 days of the season ending if they elect to, which would give them back $1,017,500 in cap space.

Amnesty Candidates – Warrick ($4,000,000) and Childress ($6,500,000) seem like the only possible candidates. With the way things are unfolding, the Suns just might save their amnesty another year to create cap space for the summer of 2013-14 in what appears to be a better group of free agents. This also brings into question whether Sarver would be willing/able to absorb this kind of loss.

Rookie Contract – Let’s assume the Suns pick 9th and sign their draft pick to a deal starting at $2,356,320. As mentioned this could vary widely. If the Suns win the lottery, they could be on the hook for a little over $5 million. Reducing the cap space like that would be a shame.

$31,582,000 (starting point) + $2,356,320 (rookie contract) = $33,938,340 (total commitments)

$60,000,000 (projected cap) - $33,938,340 = $26,061,660 (Suns cap number)

$26,061,660 + $1,017,500 (cutting Telfair) = $27,079,160 (adjusted cap number)

$27,079,160 + $4,000,000 - $6,500,000 (amnesty Chilly or Hak) = $31,079,160 - $33,579,160

*Edit - these numbers do not reflect mandatory cap holds to reach required 12 roster slots. Cap numbers will be approximately $2-$2.5 million lower than listed. See discussion in comments below for further details.

There are still other considerations. The Suns could spend all their cap money in free agency (unlikely) and fill out the roster with minimum salary exceptions. What is more likely is that at least one of the players whose contract is expiring will be re-signed (i.e. Steve Nash). Depending on how they approach this, that would in effect make the cap space smaller e.g. Nash signs a one year $10,000,000 deal, the cap space is more like $16,000,000.

The Suns still have options here. Why couldn’t they give that deal to Nash, front load a contract to a free agent this offseason (maybe even including waiving Telfair to maximize the first year of the deal), fill the roster out with minimum one year deals, and save the amnesty provision for next summer? Maybe they have one of their pieces already doing that, and are still in a position to have $25-$30 million under the cap to go after two big free agents and re-sign Gortat next summer (since he has an early termination clause that I’m sure he’ll invoke)?

Hopefully that helps clear up the cap space issue (it did for me). Essentially, the number is variable and dependent on what the Suns choose to do. Depending on what they do, and how you choose to look at it, the number could be anywhere from close to $34,000,000 all the way down to less than $16,000,000. Quite the disparity, it’s no wonder I was a little bit perplexed.

One last thing (and thank you all for your patience), here is a list of other teams with cap space this summer from Passport Hoops. I did not compile this myself, so I cannot attest to its veracity with a high degree of certainty. It appears that the free agent class this summer is not only fairly threadbare, but is also a victim of the supply and demand principle – low supply of players PLUS a large number of competing teams with a high demand.

Nets - $39,063,185

Cleveland - $23,856,814

Portland - $23,171,020

Indiana - $20,348,083

Washington - $20,049,338

Boston - $20,049,338

New Orleans - $16,683,156

Dallas - $15,849,723

Orlando - $15,780,986

Denver - $14,059,586

Toronto - $13,745,906

Sacramento - $13,392,266

All of these teams have the ability to compete with the Suns for what is left of the free agent class. There has also been speculation that some of these teams (e.g. Dallas, Boston) may be interested in clearing more cap space to become even more of a factor in free agency.

The Suns may be more apt to dip their toes in the free agent pool this summer than dive in, but let’s forecast they land a starter this offseason (e.g. Batum) and still have the capacity to sign two more starters in the 2013-14 offseason while retaining Gortat. They may not rebuild overnight, but I can see a path that leads the Suns back to prominence after just one more down season. Then again maybe they will rebuild overnight, here’s hoping….

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