UPDATED The Waive and Stretch: A Look At The Salary Cap Future In Minnesota
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
The Cap Hell Awaiting The Wolves
The Minnesota Timberwolves find themselves in a tricky spot. They just emptied their clip of draft assets to bring in Rudy Gobert only to grab the 8th seed in the West and lose in the first round in five games to the Denver Nuggets. They enter the offseason with $144.1 million of salary for the 2023-24 season, ~$8 million over the salary cap line. Naz Reid (unrestricted), Jaylen Nowell (unrestricted), and Nickeil Alexander-Walker (restricted) are all free agents, though Reid and Nowell are still extension eligible until June 30th. Both Anthony Edwards and Jaden McDaniels are entering the final year of their rookie scale deals and will be extension eligible this offseason. Not only does the team need to weigh their appetite for paying the luxury tax next year when deciding on what to offer this summer’s group of free agents, but they need to keep an eye on their future books as well. Let’s break it down.
2023-2024: The Wolves currently sit roughly $17.9 million under the luxury tax for 2023-24 with 11 players under contract. New deals for all three of Reid, Nowell, and Alexander-Walker would certainly put them over the luxury tax line and would limit them to the Taxpayer MLE (which also gets reduced even more if they cross the first apron threshold). New deals for two of the three would probably do the same. Reid projects to get the biggest deal of the three, after having enjoyed a breakout year averaging 11.5 points and 5 rebounds a game on 60.2% True Shooting in only 18.4 minutes a game. A new deal could get up into the $9-$10 million range annually, which is right in the ballpark of what the high end backup bigs get paid. As for Nowell and Alexander-Walker, it seems to me that the team may have to make a decision on which one they want to bring back, as re-signing both seems a bit redundant. Both project out to new deals in the $6-$7 million annually range and play similar positions in backup guards. If I had to guess as to which one the team will prioritize retaining, it would be Alexander-Walker. In the series against Denver, he started four of the five games, was fifth in the team in minutes played, went 10/25 from three and looked pretty good on both ends, considering he was basically thrown into the Mike Conley trade for salary matching purposes. Also, he is a restricted free agent whereas Nowell is unrestricted, thus giving the team more control over NAW’s future. Assuming a 4 year, $40 million deal for Reid and 3 year, $21 million deal for Alexander-Walker and Nowell walks, that puts the team about $3 million from the luxury tax line and about $10 million from the first apron, with two open roster spots. Now, the team could free up more room by waiving Taurean Prince’s $7.6 million non-guarantee, but he was a pretty big part of the rotation last year. You probably aren’t getting a better player at that price, though I could be wrong. Ditto with Mike Conley’s deal only being guaranteed for $14.3 million of the $24.3 million, they aren’t waiving him. Say the team only wanted to bring back Reid, that would leave them enough wiggle room to some of the Non-Taxpayer MLE and still fill out the roster while sliding under the first apron. But there just isn’t the room or assets to make a big addition to this group of guys.
2024-2025 And Beyond: This is where things get a bit messy. If we assume a 25% max extension for Anthony Edwards and an extension for McDaniels’ around his EPV, which would be around 4 years $100 million, as well as the aforementioned new deals for Naz Reid and NAW, that would put the 24-25 salary already at ~$173 million, within $5 million of my projected luxury tax line. And that’s with only eight players under contract, with three max players in Ant, KAT, and Gobert. This doesn’t include re-signing Mike Conley or Kyle Anderson, which would put them over the tax. Doing that and then filling out the roster could put the team in the double apron territory, which brings on a whole other set of restrictions when it comes to roster building. New deals for Ant and McDaniels, along with the current max deals for Gobert and KAT have the Wolves on a collision course with the luxury tax for years to come. A new CBA could not have come at a worse time for this team, as they will run into pretty severe team building hurdles that come from being a tax team in the new system.
There will probably be a lot of discussion as to whether the Minnesota Timberwolves will make the decision to go into the luxury tax or not, but honestly to me that decision was made when they decided to trade for Rudy Gobert. I don’t think anyone could stomach a cost cutting pivot now after going all in on the Gobert deal just a year ago. They will be a tax team just by retaining their current group of guys, let alone trying to go out and add more talent. The only way they can duck the tax is if they let talent walk in free agency, which would seem antithetical to the organization’s goals of competing for championships. On the plus side, they do have a lot of talent on the roster. They really need to hit on one or both of Wendell Moore or Josh Minott to be rotation players, just to have cheap, young guys that can soak up some of the minutes if guys like Jaylen Nowell or Taurean Prince are cap casualties. But a lack of draft capital to make additional moves or add rookie scale talent will really restrict the team from making another big splash.
Ducking The Tax Update
On the site, I have update the salary cap sheets for each team to include the first and second aprons, as well as how much space teams have from them. With the new CBA changes to the restrictions that come with both aprons and the bigger importance around those numbers, I felt that it was important to add. I’ve also updated each teams cap sheet to show each player heading into free agency and what level of Bird Rights the team has on that individual. See the below from the Wolves’ cap sheet as an example.
There will be more updates to the site in the coming weeks leading up to the draft and free agency, as I have been kicking around some ideas in my head.
Fake Signing Of The Week
Player: Naz Reid
Team: Minnesota Timberwolves
Deal: 4 Years, $40 million
Let’s go a little deeper on the Naz Reid free agency this offseason. If Minnesota wants to continue the two big lineup with KAT and Gobert (they kind of have to), then they need to have a reliable backup big coming off the bench. Reid is just that, as he proved this year. He brings a scoring punch at the rim and from three (3rd among rotation players in points per game per 36 minutes), and rebounds well (second on the team in rebounds per game per 36 minutes). He also excelled when asked to fill in as a starter, putting up 16.5 points and 7 rebounds a game, with a net rating of +11. This $$$ amount puts him right in the mix of the high end backup bigs on an annual basis alongside guys like Larry Nance Jr, Isaiah Hartenstein, Maxi Kleber, etc. Reid also has a bit of leverage of the organization, as he’s an unrestricted free agent and the team doesn’t have the cap flexibility to reasonably replace him due to their cap predicament that we laid out above. He is still extension eligible until June 30th, and seems like that is a priority for the franchise based on recent comments by Tim Connelly.