The Waive And Stretch: CBA Updates, Warriors Roster Spot Conundrum, 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 Substack with anyone who might find it interesting. Let's get into it!
What Caught My Attention This Week
CBA Negotiations Are Coming To A Head
We got more info with regards to the status of CBA negotiations between the NBA and NBPA, as well as some of the key deciding issues being discussed in this article by Shams Charania that came out last Monday. The article states that both sides are motivated to get a deal done and we could see it finalized in the coming weeks, which is good news for all parties involved. The sooner teams can get clarity on what changes will take place, especially revolving around cap smoothing, extension rules, and changes to the luxury tax system, the better they can make decisions. I’ve already discussed cap smoothing in my last newsletter here, but I wanted to discuss the intel on the updates to the extension rules.
Changes To the Veteran Extension Rules
Charania makes mention in the story on the possibility of extending that max extension amount from 120% to 140-150% in hopes of helping teams retain players who have outplayed their current contracts by quite a bit. While there aren’t a ton of situations currently where this increase could mean the difference between the player extending or becoming a free agent, there have been five widely discussed players where this change could make a meaningful difference: Dejounte Murray, Domantas Sabonis, Jaylen Brown, Lauri Markkanen, and OG Anunoby. I’ve put together the below table for these players illustrating how much their current 120% max extension is and how it compares to a 150% max extension.
The 30% increase in extension eligibility makes a pretty meaningful impact across the board. I could definitely see agreements for all these players on the 150% terms, though those would also hinge on if and how the NBA is going to implement a cap smoothing mechanism for the impending cap spike coming in 2025-2026, which would align with the first year of the 4 year extensions above. Regardless, I think it would be great for both the players and the teams if the League increases the max extension amount and could help teams retain talent that they may otherwise lose in free agency.
Three Things To Keep An Eye On This Season
1. Revisiting The Luxury Tax System
Shams insight into the negotiation of new luxury tax tiers really caught my eye as well. Charania states the motivation is to create new luxury tax tiers to “increase the lower tier and make it more viable for teams to spend money into the tax… while maintaining the punitive state of the upper tax levels.” Over the last three years, there have been 13 instances of teams blowing past all four tiers of the current tax system and spending into the $20+ million threshold. Meanwhile, there have only been 5 instances of teams just spending into the first tier and stopping. On the flip side, there have been 34 instances of teams that have spent up to within $5 million of the luxury tax line but stayed under. I think the biggest motivating factor on whether those borderline tax teams actually go dip their toe into the tax or not is the tax distribution that gets made to non-tax teams at the end of the year, and not how punitive that first tier is. For example, Let’s assume the Philadelphia 76ers hadn’t dipped under the luxury tax and they ended up $3 million past the luxury tax line, giving them a total tax bill of $4.5 million. They would then miss out on the luxury tax distribution at the end of the year which currently tracks to be about $14.5 million. That’s a $19 million swing. If the League wanted to figure out a way to motivate more teams to spend into that first or second tier of the luxury tax, they should start with figuring out a way to either a) include those teams in the luxury tax distribution (maybe if its their first year in the tax in x years) or b) implement a tax penalty so severe on the later tiers where teams stop spending that deep into the tax and the distribution is much smaller. Another area would the League could help out teams is by increasing the amount the hard cap is above the luxury tax line when triggered. This and the cap smoothing discussion are the two topics that I am most eager to see what happens when the new CBA is announced.
2. The Warriors Roster Spot Conundrum
The Golden State Warriors have a dilemma on their hands. Anthony Lamb has exhausted all 50 of his two-way games that he was eligible for this season. Ty Jerome only has 5 games left as well. They were able to buy an additional 10 games between the two of them due to a CBA quirk that they were able to take advantage of. Anthony Slater did a great job of explaining this quirk in an article at The Athletic that you can read here. Ultimately though, the Warriors will have one open roster spot once Lester Quiñones’ 10-day contract ends, and they will have to choose between converting Lamb, Jerome, or signing Quiñones to a rest of season deal. The leader in the clubhouse to me would be Anthony Lamb, as he is playing 20 minutes a game and plays a position of need at forward, whereas there is good depth already at the guard spot. Additionally, Steve Kerr voiced that he wanted Lamb on the roster after he had played in his last possible two-way game.
3. Mikal Bridges Breaking Out
The Nets may have a burgeoning star on their hands. In 9 games with Brooklyn, Bridges is averaging 26.1 points on a blistering 66.9% True Shooting, up from 17.2 points on 57.4% True Shooting as a Sun. He’s upped his usage from 19.1% in Phoenix to 26.0% and has doubled his free attempts to 6.2 per game as a Net. Now, it is a small sample size, bu the combination of increase in usage along with an increase in efficiency is insane. He’s handled becoming a number one option very well. There were signs in Phoenix that Bridges could do more than what he was being asked of. You could see it in the stretch of games that Devin Booker missed in January. From January 13th to the trade deadline, Bridges put up 23.1 points per game on 60.0% True Shooting and 24.2% usage. You could see flashes of the shot creation that you see in Brooklyn now.
I’d be surprised if Bridges kept up the efficiency given his new role as a primary option, but so far the Nets have to be ecstatic with how well he has played since arriving in Brooklyn.
Fake Signing Of The Week
Player: Nikola Vucevic
Team: Chicago Bulls
Deal: 2 Years, $46.5 million
With the Bulls standing pat at this past trade deadline, it seems that they are committed to this core. If that’s the case, they almost have to bring Vucevic back this summer, as they won’t be able to generate any cap space if he were to leave. This deal is similar in length and $ amount to recent deals for Clint Capela and Myles Turner. It also keeps them far enough under the luxury tax line that would allow the Bulls full access to the Non-Taxpayer MLE this summer to add another rotation player. I wouldn’t expect a huge market for Vucevic among the cap space teams, though Charlotte and Oklahoma City do have holes at the center position currently. Additionally, its right in line with his EPV of 16.7% of cap, as if you take 16.7% of next year’s salary cap then raise it by 8%, you will come to roughly $46.5 million. Two years keeps him under contract through 2024/2025, the last year that Lonzo Ball and Alex Caruso are under contract as well. The Bulls could then in theory carve out a large amount of cap space in the summer of 2025, as the only contracts currently on the books for 2025/2026 is Zach Lavine and Dalen Terry.