Money in the bank: The Increase in Salary Cap and the Thunder

presti thunder

On Friday, the league sent a memo to all the teams in the league that the salary cap will increase by about $5 million dollars and the luxury tax line will follow suit. For teams beckoning for free agents, this is like manna from the heavens. But for teams like the Oklahoma City Thunder, who already have their top 3 players under contract, this type of financial relief will allow them to not only to stay out of the luxury tax, but also to remain competitive in the free agency department.

If the Thunder doesn’t trade anyone during the draft or during the offseason, here are the players that are under contract for the 2014-15 NBA season

  • Kevin Durant
  • Russell Westbrook
  • Serge Ibaka
  • Kendrick Perkins
  • Nick Collison
  • Reggie Jackson
  • Jeremy Lamb
  • Perry Jones
  • Andre Roberson
  • Steven Adams
  • Hasheem Thabeet has a team option for $1.25 million. The team picking up his option is probably dependent on whether they bring Tibor Pleiss over from Europe.
  • While still unknown, it is believed that Grant Jerrett also has a team option for the next two seasons.
  • Thabo Sefolosha, Caron Butler, and Derek Fisher will be unrestricted free agents.

With 10 players under contract, that leaves 5 possible roster spots to play with. The Thunder will not be under the salary cap for the foreseeable future, but their biggest battle is staying under the luxury tax to avoid its punitive penalties. With the increase in the luxury tax line, the Thunder are about $9 million dollars under the line. Here are 5 possible things the team may do with this increase in the luxury tax line:

1. Sign Reggie Jackson to an extension

It may not be this offseason, but with the increase in revenue, the team will make it a priority to keep Jackson in their camp. The reasons for resigning Jackson are threefold: First, he provides the necessary scoring and play-making off the bench that would seriously be lacking if he weren’t on the team. Secondly, he works great with Durant, Westbrook, and Ibaka as a 3rd/4th option in the crunchtime line-up. Third, and most importantly, he is a great insurance policy to have if Westbrook’s knee issues ever creep up again. The great unknown is how Westbrook’s knee injury will affect him for the next 3 seasons that he is under contract with the Thunder. Will the team have to maintain their rest policy on back to backs for the rest of his career? Will Westbrook have sporadic bouts with knee tendinitis that may keep him out for a couple games at a time? Will Westbrook have to have arthroscopic scopes from time to time to clean out any debris that will keep him out for 6-8 weeks at a time? These are all issues that will be alleviated if the team resigns Jackson in these next two offseasons.

reggie jackson thunder

This will not be another James Harden situation. For as good as Jackson is, he is not a top 10 player in the league. And the Thunder are in a much better position now to offer their current sixth man a sizeable contract than they were two seasons ago. Let’s not forget, the Thunder offered Harden a near max contract (somewhere in the neighborhood of 4 years/ $52 million) that would have put them over the luxury tax line had he signed it. The Thunder are willing to go over the tax line, but only for the right player and for the right price. I’m not saying that Reggie Jackson’s extension will push them into luxury tax territory because this extension will coincide with Kendrick Perkins’ and (sadness) Nick Collison’s contracts expiring. A 4 year/$26-28 million dollar contract would probably be what the Thunder are shooting for.

2. Keep Kendrick Perkins

If the tax line would have stayed the same for next season, I could have seen a scenario where Perkins would have either been amnestied or traded. Highly unlikely, but still probable. With the tax line bumped up, though, the organization probably sees no reason to let go of the big man at the moment. Say what you want about Perkins, but the team has a great winning percentage when he plays and looks a bit lost defensively in the games that he doesn’t. Is he offensive napalm? Yes. But he’s also a great communicator on the defensive end and holds his teammates accountable when they are not where they are supposed to be on that side of the floor. I don’t know if the Thunder are yet ready to head into a championship contending season with 2nd year center Steven Adams as their starter and Hasheem Thabeet/Tibor Pleiss as his back-up.

3. Use the Kevin Martin Traded Player Exception (TPE)

Many fans, me included, were disappointed when the team didn’t use the Eric Maynor TPE at the trade deadline this season. I thought the team could have used Maynor’s TPE (about $2.2 million) on a shooter from a team that was out of playoff contention. Players like CJ Miles of Cleveland or Anthony Morrow of New Orleans fit into that category. Instead the team let the TPE expire and got nothing from the Maynor deal other than the rights to a European player with a cool name that will never make the trek across the Atlantic.

When the Thunder convinced the Minnesota Timberwolves to do a sign and trade for Kevin Martin, the team obtained a $6.6 million dollar TPE. With the increase in the tax line, Thunder GM Sam Presti should be able to use some or all of the TPE to get a player they covet.

How will they use it? The few teams that are vying for Carmelo Anthony’s services will have to shed salary to obtain him. Those teams will be looking to shed salary without taking any salary back. The Thunder could deal with a team like Chicago to obtain Mike Dunleavy, whose $3 million salary fits nicely within the parameters of the TPE. The trade could work as follows:

  • Bulls get – Thunder’s 1st round pick (29th pick) and a $3.4 million dollar TPE
  • Thunder get – Mike Dunleavy and the Bobcats 1st round pick (via Chicago, No. 16)

The Bulls still end up with 2 first rounders, but the cost is less, which allows them more money under the cap to attempt to sign Carmelo Anthony. Dunleavy is an expiring contract and probably wouldn’t have been on the Bulls past next season.

4. Resign Caron Butler

butler durant westbrook ibaka lamb thunder

Caron Butler seems to be working out well in his short stint with the team. With Derek Fisher “retiring” and the possibility of Thabo Sefolosha not returning after this season, keeping a guy like Butler could shore up many of those intangibles that will be missing if those two guys leave. Butler would have to take a significant pay cut to stay on the team, but if he values playing for a contender, that may be a possibility.

5. Prepare for the next extension for the Big 3.

Presti is always looking 3 or 4 steps ahead. Durant has 2 years left on is current deal after this season, and Westbrook and Ibaka have 3 years left. If the Thunder really follow the Spurs’ model, they’ll be looking to keep this trio together. The next deals for Durant and Westbrook could take them in to the $20 million per season category. The Thunder may need Durant and Westbrook to make sacrifices in order to not only keep the team competitive, but also keep the core together.

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