by Austin Peters
Free agency is one of the more riveting parts of the NBA. Teams spend years in advance planning and structuring contracts so that they will have money to spend on players who are looking for a new team.
The cap is expected to rise exponentially over the next few years, thanks in large part to the NBA's new TV deal. This means you will be hearing more often about teams that have a lot of "cap space." The NBA has a salary cap that teams are required to spend under, and the amount of money the team is under that salary cap is called "cap space."
As the popularity of the NBA grows, fans are becoming more educated about contracts and how NBA rosters are built. They realize who the players that will receive the most money are and then try to find a way for their team to sign that guy. Unfortunately, if it seems as if your team has the space to sign a premier player, chances are whatever cap space number you're figuring is misleading.
Contracts coming to their end is a nice place to start when calculating cap space for a team. The misconception that comes with this is that people believe when a player's contract ends, it means the team is free of that money and their number against the cap is reduced to a flat zero. This is where cap holds come to ruin your day!
What is a Cap Hold?
Cap Holds are one of the biggest buzzkills in team building. They make salary cap space shrink really fast and make decisions infinitely tougher for front office executives.
The salary cap in the NBA is known as a "soft" salary cap. Teams are allowed to spend over that salary cap within certain rules and regulations. This is in contrast to the NFL, who has a "hard" salary cap and rarely ever allows teams to operate over the cap. The reason the NBA allows for a soft salary cap is to make it easier for teams to keep their own free agents, thus making the league more competitive.
The main way a team can re-sign it's own players over the cap is through a player's Bird Rights. A team gets a player's Bird Rights if that player has been with the team for three or more years in a row. This is how teams can keep their own free agents and thus make it easier for them to keep superstars. There are different types of Bird Rights depending on how many years a player has been with a team. Depending on what their rights are gives a definition as to what kind of contract terms the incumbent team can re-sign them to.
When a player's contract comes to a close, the following summer after their contract ends, they are assigned a cap hold. A cap hold is a dollar amount that a free agent has that acts like a placeholder for that player's Bird Rights. Each player's cap hold is different depending on their previous contract terms, and Larry Coon explains all of this in his CBA FAQ. What a cap hold does is give the team the right to sign that player even if they are over the cap. This makes Bird Rights and cap holds tied very closely together.
How do cap holds affect Free Agency?
Several things happen to cap holds during free agency:
- If a player signs a contract with a completely different team, then the cap hold for that player goes away. For example: last summer, Isaiah Thomas decided to change teams and sign with Phoenix instead of staying in Sacramento. The minute that Thomas passes his physical and his contract clears the league office, then the Kings no longer have Thomas' cap hold on their books and they have that free space to do what they want.
- If a player signs for a contract value that is different than their cap hold, then the hold changes to the dollar amount to which a team signed that player. Dirk Nowitzki re-signed with Dallas last offseason to an amount way below his cap hold. Nowitzki's new deal was somewhere in the range of $8 million annually, and his cap hold dropped from its original amount to that $8 million figure when he signs his new deal.
Renouncing cap holds brings a catch to it. If you renounce a player's cap hold, you can no longer sign them to a contract using their Bird Rights. Erasing a cap hold also erases their Bird Rights. You can still re-sign the player using remaining cap space, a minimum contract, or a few other over the cap exceptions, but using their Bird Rights to retain that player is no longer an option.
So what teams really do have significant space to sign free agents this summer?
Here is a few of the top teams to look out for this summer with lots of cap space:
(Note: I took into consideration cap holds for ALL free agents. I didn't make any assumptions on renunciations, options, and players signing elsewhere. This is all based on a projected $67.1 million salary cap for the 15-16 season. All salary figures are via Basketballinsiders.com )
PHILADELPHIA 76ers
Cap Space: $19,678,596
The Sixers have been stockpiling second round picks on their roster that they're basically giving a tryout every year to see if they can nail one of them. A lot of their salaries are still minimum contracts or rookie deals, giving them an insanely low cap number for the offseason.
MILWAUKEE BUCKS
Cap Space: $15,291,801
Like the Sixers, the Bucks have several of their key guys still on their rookie deals. Khris Middleton is the only guy that has a cap hold this summer, and his new deal will presumably take up most of this cap space. But they hold his Bird Rights (giving them the ability to operate above the cap), making them an interesting team for any young free agents looking to sign somewhere and be a part of an up and coming team.
ORLANDO MAGIC
Cap Space: $11,101,750
Their biggest cap hold is restricted free agent Tobias Harris, and he might not be staying, which would create even more cap space for the Magic. Just like the Bucks, they are young and intriguing and will have a new coach at the helm next season.
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