Brooklyn’s Problematic Summer of 2018

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I tend to spend a lot more time focusing on the summer of 2018 than the summer of 2017. There is, I assure you, a very good reason for this beyond a general fear of the future. By keeping free agent contracts short in 2016, Sean Marks may have backed the Nets into a corner for 2018.

First, the particulars: as things stand, the Nets are scheduled to enter the 2018 offseason with zero draft picks and between four and eight free agents.

The real problem, though, is a complicated cap situation that could leave the Nets with the aforementioned mess…and little to no space to add outside free agents.

Any free agent a team wishes to retain is assigned a “cap hold” to prevent teams from exploiting the advantages gained from the Bird Rights stipulation. Those cap holds are designed to cripple, or at least limit, a team’s cap space until long-term contracts are signed. Cap holds range from between 120% to 250% of a player’s previous salary.

In the below table, the two columns on the left represent the Nets’ current salary commitments for 2018. The two columns on the right are a more realistic representation of whose rights you can expect the Nets to keep.

Brook Lopez33,963,525Brook Lopez33,963,525
Jeremy Lin15,600,000Jeremy Lin15,600,000
Trevor Booker11,862,500Andrew Nicholson6,637,002
Andrew Nicholson6,637,002Rondae Hollis-Jefferson2,470,357
K.J. McDaniels6,606,059Caris LeVert1,702,800
Justin Hamilton3,900,000Isaiah Whitehead1,544,951
Quincy Acy2,222,399Spencer Dinwiddie1,656,092
Rondae Hollis-Jefferson2,470,3572017 Draft Pick A1,952,760
Caris Levert1,702,8002017 Draft Pick B1,740,000
Isaiah Whitehead1,544,951Roster Charge815,615
Spencer Dinwiddie1,656,092Roster Charge815,615
Joe Harris1,544,951Deron Williams5,474,787
Sean Kilpatrick1,544,951
Deron Williams5,474,787
Cap Space6,269,626Cap Space28,626,496

As you can see, the Nets will have less than $30 million in cap space, even if they don’t add any long-term salaries this summer. That’s not enough to offer an unrestricted free agent a maximum contract.

That number can be reduced by signing Lopez to a deal starting at less than $33 million, but even that relief might not be enough to avoid the most complicated aspect of the Nets’ dealings.

The Jeremy Lin Cap

Marks did well last summer to sign a starting point guard to what amounts to a 2-year, $23.5 million deal. The downside is that he did a poor job protecting the team from a possible Lin departure.

The Nets only hold Lin’s Early Bird rights, meaning without cap space they can’t offer him a starting salary greater than 175% of his previous year’s salary. Any team with enough cap space can offer Lin up to $30.9 million in 2018, the Nets might be limited to $21 million. Adding anything more than ~$10 million to their 2018-’19 salary this summer effectively caps the Nets at that number.

If the Sacramento Kings were to offer Lin a four year contract starting at $25 million, they’d be able to pay Lin $12 million more than the Nets over the life of the deal. That’s not an insignificant amount. Whether Lin will be worth those numbers remains to be seen, but the possibility exists for the Nets to be outbid.

While signing Lin to a reasonable contract was part of an aggressive free agent strategy in 2016, the above situation could’ve been avoided by bumping his yearly salary up by $1.5 million. With the Nets’ ability to offer greater raises, the difference in total money would’ve been negligible.

We’ll have a clearer idea of Lin’s market value in July, when Jeff Teague and Jrue Holiday ink their next contracts.

Culture and Continuity versus Pragmatism

The biggest issue currently facing the Nets for the summer of ’18 is whether or not they can logistically afford to keep their two 30-year old leaders.

The below chart breaks down how much the duo will earn combined (starting at $21 million for Lin and $25 million for Lopez) over the next four years, the percentage of the salary cap that figure represents, and the expected rate of decline as outlined by the Wages of Wins.

Year ’18-’19 ’19-’20 ’20-’21 ’21-’22
Age 30 31 32 33
Salary $46,000,000 $49,680,000 53,360,000 57,040,000
Percentage of Cap 44.6 44.7 44.4 N/A
Rate of Decline 17% 22% 35% 57%

As you can see, that’s a lot of cap space tied up in declining players. If the Nets are again outside of the playoffs next year, there’s a good chance those contracts will prevent them from taking the next step.

The flip side to all that is the culture the Nets have begun establishing this season. As the team’s best players, Lin and Lopez deserve a lot of credit for the positive attitude we’ve seen from the Nets on the court. How difficult will it be for the Nets to maintain that professionalism if half the roster and all the veterans are gone?

Bottom Line

Starting with the 2017 NBA Draft and ending with the 2018 trade deadline, a lot of things are going to change for the Nets. Sean Marks has been aggressive about improving the roster, and that won’t change.

Still, the summer of ’18 is shaping up to be a difficult problem to solve, and Marks will have make sure all of the team’s assets are protected. They simply aren’t in a position to lose anything of value.

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