Analysis: As NBA owners approve amended CBA, here’s how the cap and tax figures could impact the Utah Jazz

After the National Basketball Players Association announced Monday night that it had agreed to terms with the NBA on an amended Collective Bargaining Agreement that will allow the 2020-21 season to proceed, the league’s Board of Governors followed suit with their approval Tuesday — making the deal official.

A joint statement from the NBA and NBPA issued late Monday night announced the formalization of both some already widely-reported details — for instance, that the season will commence on Dec. 22 and will entail a 72-game schedule — as well as some new items agreed to, including that free agent negotiations will begin on Nov. 20 at 6 p.m. ET, and signings can take place starting at 12:01 a.m. ET on Nov. 22.

There is not yet a date on lifting the moratorium in place on trades, but sources told both ESPN’s Adrian Wojnarowski and the New York Times’ Marc Stein that it is expected to be lifted two or three days before the draft.

Meanwhile, team schedules will be announced at a future date.

Also of note is the confirmation that the salary cap ($109.1 million) and luxury tax line ($132.6M) will effectively remain the same for 2020-21 as they were for 2019-20. Subsequent seasons under the existing Collective Bargaining Agreement will see both the cap and tax lines increase by a minimum of 3% and a maximum of 10%.

Should there be more decreases in basketball related income (BRI), teams' tax payments also will decrease by a proportional amount.

The two sides also reached a compromise on the escrow system used to balance out the BRI. Any salary reductions deemed necessary beyond the standard 10% escrow will be spread across this season and potentially the subsequent two, also. No salary reduction will exceed 20% in any season.

The salary cap and luxury tax figures are of particular importance to the Utah Jazz this offseason.

They’ve made no secret of their desire to improve the team around the margins after consecutive first-round playoff losses. In addition to wanting to retain midseason trade acquisition and sixth man Jordan Clarkson (an unrestricted free agent), they’d also love to further bolster the roster by utilizing their midlevel exception and the biannual exception.

Except … do they have the actual financial wherewithal to pull it off?

It’ll be difficult, barring incoming owner Ryan Smith signing off on the team making a rare foray into tax territory. Then again, considering the league going on record as being more forgiving of tax penalties this season owing to expectations of lower-than-usual revenue once again, maybe this is the year to spend a bit more.

The thing is, in order to make more than one of those moves, they’re likely going to have to be a tax-paying team.

If Mike Conley opts in to the final year of his deal (super likely), and the Jazz guarantee the salaries of Georges Niang (very likely), Miye Oni (pretty much definitely) and Nigel Williams-Goss (rather more dubious), they’ve already got roughly $118 million committed in salary. And that’s not even counting a new deal for Clarkson … or retaining the likes of intriguing young guys like Juwan Morgan or Rayjon Tucker. They’ll also owe a salary to their first-round draft pick.

Beyond that …

Well, it’s estimated that the quote-unquote “non-taxpayer midlevel exception” (available to teams that haven’t dipped below the cap to use cap space, or exceeded the tax apron of just under $139M) will be worth about $9.3M in 2019-20. Teams can technically use these exceptions to sign players for up to four seasons with 5% annual raises, bit it seems dubious that many players who wind up taking midlevel deals this month will do so for more than a year.

Meanwhile, biannual exceptions — which can be used every other season by teams over the cap and under the tax apron — will likely be in the neighborhood of $3.6M this coming season (though they can get two seasons, with a 5% increase from Year 1 to 2).

So, that’s almost $13M worth of exceptions … plus, about $1.9M salary for whoever they pick at No. 23 (commensurate with the salary of the 23rd pick in 2019) … plus whatever they may wind up paying for Clarkson (he made $13.4M last season) — who you can’t really afford to replace if he leaves.

This is why teams were hoping that, even if the cap was never going to get to the previously anticipated $115M level, that the tax line might nevertheless be bumped up to the previously projected $139M level. That didn’t happen, with the league instead opting to be less onerous in applying tax penalties.

The organization will have to make such decisions quickly, with the draft coming up in about a week, and free agency coming a couple days after that. But then, everything in this truncated offseason is coming quickly now, isn’t it?

from The Salt Lake Tribune https://ift.tt/2Usj6Sh