The Waive and Stretch: Cap Projection Goes Down, Houston Memphis Trade, Last-Chance Transaction Opportunities, And More
Welcome back to another edition of The Waive and Stretch Newsletter. A quick shameless plug to note that I am looking to work in basketball in any capacity and would love to connect with anyone in the industry or trying to break in. Please feel free to share this with anyone who you might find it interesting. Let's get into it!
What Caught My Attention This Week
2024/2025 Salary Cap Estimate Lowered
Multiple reports came out on Tuesday that the NBA is advising teams that the 2024-2025 salary cap is projected to be $141 million, a 3.7% increase year-over-year, which is $1 million lower than the initial estimate that was provided. This seems to certainly shut the case of a possible 10% max cap bump that a lot of deals have been announced with factored in, which is what we saw the salary cap go up by the last two years. I’m sure no team is happy with a lower cap projection, but the teams already flirting with the tax/aprons really can’t be happy about it. There are already ten teams in the luxury tax next year (BOS, DAL, DEN, GSW, LAL, MEM, MIA, MIL, MIN, PHX), with the Clippers a certainty to join them. Here is how those teams already stand for 24/25 from a luxury tax/first apron/second apron standpoint:
In Tax But Under First Apron: DAL, GSW, LAL, MEM,
Between First and Second Apron: MIA, MIL, MIN
Past Second Apron: BOS, DEN, PHX (LAC likely)
This news is particularly harsh for the Wolves who face a massive financial crunch this offseason that I’ve discussed prior on here.
As far as the cap space teams, the below is my updated projection on which teams will be able to generated cap space and just how much, factoring in projected draft pick cap holds.
Philadelphia 76ers: ~$48 million
Detroit Pistons: ~$47 million
Charlotte Hornets: ~$40 million
Utah Jazz: ~$33 million
Orlando Magic: ~$31 million
San Antonio Spurs: ~$21 million
There are some other teams that could potentially be cap space players in (Toronto, OKC) dependent upon how the rest of the trade deadline goes.
Houston Rockets - Memphis Grizzlies Trade
We have yet another trade! Full details below:
Houston Rockets Receive: Steven Adams
Memphis Grizzlies Receive: Victor Oladipo, OKC 2024 2nd, 2024 more favorable 2nd of GSW 31-55 or BKN 31-54, 2025 more favorable 2nd of HOU or OKC
My first reaction was that Memphis did really well here. Everyone knew they had a pretty big financial crunch coming next year, as they were brushing up against the second apron with salary cap projections going backwards. To get expiring money in Oladipo along with three seconds for a 30 year old Steven Adams who had season-ending surgery on his knee back in October seems like quite good deal-making. They are also generating a $12.6 million trade exception, as they were able to take Oladipo into the injured player exception that was generated from the Ja Morant injury (objectively hilarious that they are taking an injured player into an injured player exception and sending out an injured player). They now sit about only $2 million into the tax, with the ability to get under by declining Luke Kennard’s $14.7 million team option.
As for Houston, I wonder if they could’ve done better here. Three seconds for Adams is a fairly decent-sized bet on him returning to full health in his last year under contract next year. He does serve a big need for the team, but I just wonder if they could’ve done the same for someone who could help this year as well, like Daniel Gafford, Nick Richards, Mo Wagner, or Goga Bitadze.
Three Things To Keep An Eye On
1. Last-Chance Trade Opportunities
With the new CBA that was ratified this year, some rules were not implemented immediately and won’t take effect until the 2024/2025 season. One of the bigger rules is any team past the second apron won’t be able to aggregate salaries in a trade. So, teams like Phoenix, Boston, Milwaukee, Los Angeles (both), Minnesota or Denver that will be up around that second apron level could be looking to aggregate multiple contracts in a deal before the deadline just to bring back a bigger contract before next year. Look for them to be sending out as much cash as possible in any deal, as second apron teams won’t be able to do that as well starting next year.
2. Two-Day Draft
The NBA is reportedly expanding the Draft into a two day event, splitting the first and second rounds between the days. The second round will go from 2 minutes per pick to 4 minutes. I think this is really a no-brainer, as once the trades start flying the draft gets pretty crazy to try and track what’s going on. I can only imagine how hectic it gets in teams’ war rooms during the second round, trying to talk through trade scenarios with only 2 minutes on the clock. This will give teams a chance to re-set after the first round, re-assess the data on players who are falling and re-visit trade discussions with teams.
3. More Ducking The Tax Updates
I’ve added a couple more things to the cap sheets over at duckingthetax.com. First, I’ve added current year contract incentives amounts, along with any trade bonuses directly underneath the cap sheets for each team.
Then I’ve also added any exceptions remaining, if applicable, and any incoming or outgoing cash used in trades on the sidebar of each cap sheet.
Fake Trade Of The Week
Sacramento Kings Receive: Kyle Kuzma
Washington Wizards Receive: Kevin Huerter, Davion Mitchell, SAC 2028 1st (Top 10 protected through 2029 converts to 2029 SAC 2nd), POR 2025 2nd
The Kings add another big wing in Kuzma and get off the future money owed to a struggling Kevin Huerter and Davion Mitchell. This also clears the way for the team to bring back Malik Monk using his early bird rights this offseason. Meanwhile, Washington gets a first and a good second, while taking a chance on Mitchell and rehabbing Huerter’s value.