October 17, 2018
Perhaps moreso than any other team, Cleveland's offseason will be determined by its finances.

Over the last few weeks, the BBALLBREAKDOWN team have been taking looks at five important questions each NBA team will be facing going into the upcoming offseason, continuing here with the Cleveland Cavaliers.


1. What’s Love Got To Do With It?

Will Kevin Love leave the Cavaliers? Do the Cavaliers even want him back after discovering a stifling defensive identity once he went down? While no one except for Kevin Love himself is likely to know the answer to the first question, the second question is not shrouded in nearly as much mystery.

Simply put, the Cavaliers would be absolutely bonkers (or deferring to the desires of one LeBron James) to not do everything in their power to convince Kevin Love to return for another season on the banks of Lake Erie. Proper usage and fit aside, the Cavaliers will be so far into the luxury tax next season that even if Love decides to go elsewhere, the Cavaliers will not have the cap flexibility to sign a free agent on the open market even remotely close to Love’s caliber. For that reason alone, it makes all the sense in the world to bring Love back and figure out the on court dynamics later.

So how might this play out? There is uncertainty still as to whether Love picks up his $16.75 million player option for 2015-16. As a player with seven years of experience, the maximum salary he will be eligible to re-sign for this summer will be north of $18 million (players with seven years of experience in 2014-15 had a max salary of $17.69 million). However, the fact Love is coming off of a rather serious shoulder injury may change how he evaluates his options this offseason.

Whether he opts in, or opts out and re-signs, Love may still be inclined to take only a one year deal for a simple reason. The salary cap is projected to jump from around $67 million in 2015-16 to $89 million in 2016-17 and $108 million in 2017-18. Like the salary cap number, the maximum salary number is established based on a percentage of the league’s projected Basketball Related Income (BRI) for the upcoming league year. So as the salary cap number balloons in the summers of 2016 and 2017, so too will the maximum salary players are eligible to earn. Players who sign long-term max deals before the salary cap begins to leap in the summers of 2016 and 2017 therefore won’t have the opportunity to benefit from the rising max salary figures because their annual raises will be locked in under the terms of the CBA. This means this summer’s elite free agents are going to be looking to sign shorter deals or deals with player options in the next couple of years so that they have the opportunity to take advantage of the ballooning salary cap and max salary figures in the summers of 2016 and 2017.

For example, although there is no reason to think LeBron James would leave Cleveland a second time, it is also completely reasonable to expect LeBron to decline his option to become a free agent this summer, and to also structure his deals so that he can be a free agent in the summers of 2016 and 2017. This summer, the cap is only expected to jump from $63 million to $67 million, and even though we don’t yet know the max salary figures for 2015-16 (the league is yet to announce the official salary cap and max salary figures for 2015-16, which are calculated during the July moratorium), we do know that Lebron will be able to earn at least $100,000 more by declining his player option and signing a new max deal. This is because his player option for next year represents only a 4.5% raise from his 2014-15 salary, whereas the CBA mandates that a player’s maximum salary can never be less than 105% of the player’s salary in the previous season. This means that, if LeBron chooses to decline his $21.57 million player option for 2015-16, he will be able to re-sign for at least $21.67 million, and possibly more depending on where the max salary number for ten-year veterans ultimately ends up.

One hundred grand is definitely not a lot of money when it comes to LeBron James, relatively speaking, but at the same time there is no incentive for him to leave that money on the table. He might as well get it if it’s there for him to take, and come the summer of 2016, there will be even more money sitting out for LeBron to grab in free agency. With a 2016-17 cap number projected to be around $89 million, the max salary for a ten-year veteran should be somewhere in the neighborhood of $28 million. And the same is true for 2017-18, when the max salary for a ten-year veteran should be in the neighborhood of $35 million with a cap as high as $108 million. LeBron will get that money, so get used to the idea of The Decision 3.0, 4.0, and 5.0.

Regarding Love, the Cavaliers have an advantage by holding his Bird rights, due to the fact they acquired him via trade (they can offer him a fifth year and 7.5% annual raises as opposed to the four year contracts with 4.5% raises other teams will be able to offer). Coming off a shoulder injury, Love will see value in the fifth year the Cavaliers can give him. However, a five-year deal signed this offseason would take Love through the 2019-2020 season, meaning if he were to play out such a deal he would be looking to sign his next contract going into his age 32 season. If Love is angling to maximize his earnings while in the NBA, he will surely want to sign a new deal sometime before 2020, as there is a big risk a team won’t want to give Love a five-year deal going into his age-32 season. Signing his next deal before the summer of 2020 would also allow Love to take advantage of the rapidly rising max salary figures sooner.

If Love is confident he will come back 100% from his dislocated shoulder, and also that he can re-establish his status as a top-20 player in the league, his best bet, regardless of where he signs, is to ink a two or three-year deal with the final year being a player option. Going that route would give him the opportunity to capitalize on the max salary jump either in each of the summers of 2016 and 2017, or at least in 2017. Furthermore, come the summer of 2018, Love will have reached ten-year veteran status, and be eligible for the increased 10-year vet max salary, so he will again, in the best case scenario, want to be a free agent in the summer of 2018, and at that time, he will likely be looking to sign a five-year max deal as he enters his age 30 season.

For someone like LeBron, there is not as much risk involved with arranging to be a free agent in each of the next four summers including this summer. For someone Like Kevin Love, coming off a down year and a dislocated shoulder, there is more risk involved with betting that you will continue to be able to command a max salary through the summer of 2018. This is what Love and his agent will have to consider. How long can he hold off on signing the five-year max deal he will eventually want to sign? The longer he holds out on inking a five-year deal, the more money he could potentially earn in the long-run, but also the greater the risk he reaches a point where he no longer is able to command a five-year max-salary.

And this is where the Cavaliers advantage of holding Love’s Bird rights truly comes into play. Maybe Love gambles on shorter deals over the next few years, but eventually he will want to sign a five-year max deal, and he will only be able to do that if a team holds his Bird rights. If Love leaves Cleveland this summer via free agency, any Bird Rights a team might hold over him would be extinguished. Love would then not be eligible to sign five-year deal until the summer of 2018 when his Bird rights would have been rehabilitated (presuming he doesn’t make another jump in free agency in the meantime). If Love leaves the Cavaliers this summer, he will be betting that the team he goes to will want to sign him to a five-year max deal in the summer of 2018 as he enters his age 30 season. That’s a risky proposition, and represents the strongest argument for why it makes the most financial sense for Love to ink a short-term deal to remain in Cleveland. If I had to guess, I’d bet on Love signing a one year deal to remain in Cleveland with a player option for a second year.

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2. Exactly How Much Is Dan Gilbert Willing To Spend? [HINT: it better be a lot]

Presuming Love re-signs with the Cavaliers for around $18 million and LeBron resigns for just shy of $22 million, the Cavaliers will have approximately $40 million wrapped up in those two players alone. Add in Kyrie Irving ($14.75 million), Anderson Varejao ($9.6 million), the Brendan Haywood contract ($10.5 million; see below) and Joe Harris ($0.85 Million), and the Cavaliers will have roughly $75 million tied up in six players, already $8 million over next season’s projected salary cap. The Cavaliers also hold a $4.9 million team option for Timofey Mozgov which they will surely exercise, and Mike Miller has a player option for $2.8 million, which at this point in his career he would be crazy to turn down. Add these numbers up and the Cavaliers have a cap figure of about $83 million for just eight players.

From here, things get interesting. Tristan Thompson, Iman Shumpert and Matthew Dellavedova will all be restricted free agents this summer. This past fall, Thompson and his agent Rich Paul turned down a four-year $52 million offer from the Cavaliers. At the time no one could have imagined Thompson would be able to do better this summer. But it turns out that Paul may have made the right move. Thompson’s performance after Love went down in the first round has certainly earned him more money, and there is reason to believe he may even be able to command a max salary from the Cavaliers, which would start in the neighborhood of $15 million for a player with four years of experience. With the uncertainty surrounding Love, the Cavaliers will want to be sure they keep Thompson, so pencil him in for a $15 million salary number in 2015-16, which takes the Cavaliers to $98 million tied up in just nine players.

Shumpert is also coming off of his fourth year in the league and will be looking to sign his first sizable contract. Though he didn’t have the best offensive performance in the Finals, his defense proved to be a crucial element throughout the Cavaliers’ playoff run. He will command interest on the open market and it would be reasonable to assume the Cavaliers may have to pay on the order of $8 million per year to keep him in the Wine and Gold. The Cavaliers will likely also need to throw down another $3 to $4 million to keep Dellavedova, who had his moments these playoffs but also showed his NBA ceiling is as a backup point guard capable of playing 15 minutes of harassing defense.

That brings the Cavaliers to a cap number in the range of $110 million for eleven players (LBJ, Love, Irving, Mozgov, Thompson, Varejao, Shumpert, Dellavedova, Miller, Harris, and Haywood), and we haven’t touched on J.R. Smith yet. Smith has a player option for $7.35 million in 2015-16, and reportedly will not use it. While a sub-par finals performance and an elbow to Jae Crowder’s noggin likely remain fresh in the minds of many, it is important to remember how well Smith played for the Cavaliers after being traded from the Knicks. Don’t forget his eight three-pointers in game one of the Eastern Conference Finals that helped set the tone for the Cavaliers’ sweep of the Hawks.

Reports indicate J.R. is likely to decline his player option in search of a longer deal. While some teams will surely shy away from a player of Smith’s temperament, as NBA front office types say, it only takes one, and surely there will be a GM out there driving up the price for Smith. Dan Gilbert will need to decide how far into the luxury tax he is willing to go.

The Cavaliers really only have two options: they can either bring the entire gang back for another run, or they can bring some of the gang back. They can’t go get a new gang. Being a team so far over the cap, if the Cavaliers don’t resign Smith or one of their other free agents, they won’t be able to sign a free agent from another team to replace the player they let walk. For that reason, the best move for the Cavaliers, so long as Gilbert is willing to dole out what will likely end up being a record luxury tax payment, is to bring everyone back, even J.R. Smith, and even if it costs $8 million a year.

At this point, our hypothetical Cleveland roster for next season stands at 12 players with $118 million in salary. The Cavaliers will have the Taxpayer Mid-level exception at their disposal ($3.37 million in 2015-16), but remember, every dollar at this point in salary is another several dollars spent in tax, the exact amount depending on how far above the tax line the Cavaliers end up. How far is Gilbert willing to go to keep LeBron happy?

The Cavaliers also hold the 24th pick in the first round of the draft. If they sign their first round pick to 120% of the rookie scale, we add another $1.28 million to the Cavaliers salary cap figure, though Gilbert could save about a half million in salary if he goes the route of stashing the draft pick overseas or in the D-league and instead signing a veteran to the minimum. Assuming the Cavaliers use the Taxpayer Mid-Level Exception, the team is looking at a 2015-16 team salary on the order of $123 million after throwing in a 15th player, another veteran, at the league minimum (goodbye Perk and Matrix; LeBron’s bestie James Jones likely gets the last seat on the team bus).

With a tax line anticipated to be at $81.6 million, the Cavaliers could therefore be as much as $42 million over the tax after bringing everyone back and filling out their roster. This would mean that in addition to paying $123 million in player salary, Dan Gilbert would also be paying out on the order of $146 million in luxury tax. That my friends, would set a record by a long shot, far surpassing the $90 million tax payment the Nets made for the 2013-14 season. Every $1 million saved in salary could knock off as much as $5 million from the tax payment the Cavaliers ultimately end up paying. But at the same time, every $1 million of salary Dan Gilbert tries to save could possibly alienate the one person that represents the city of Cleveland’s best hope of getting a championship in the foreseeable future. Talk about being between a rock and a hard place.

3. What Will They Do With The Brendan Haywood Contract?

We’ve outlined what the Cavaliers would have to do to bring back the band for another, hopefully healthier, go-around. However, David Griffin does have one final card to put in play this offseason in terms of the Cavaliers’ eventual roster composition for next season.

Brendan Haywood has a non-guaranteed salary of $10.5 million for 2015-16. This contract becomes fully guaranteed if he is not waived before August 1st. Griffin will therefore look to deal Haywood in July to a team looking for cap relief and for a player that can give the Cavaliers the added depth they so desperately needed the past few weeks.

As a taxpaying team, the Cavaliers will be able to trade for a player (or players) earning 125% plus $100,000 of Haywood’s salary, for a total of $13.25 million. It’s important to note, though, if Cleveland brings everyone back from this past year, trading the Haywood contract for a player that earns on the order of $13 million could add roughly $17 million to the $146 million luxury tax payment mentioned above, which would take us into the completely insane territory of over $160 million in luxury tax for a single season. The Cavaliers targeted the unique Haywood contract for a long time precisely so as to be able to use it in this fashion, but at that time, they didn’t have the Shumpert and Smith types who are now making things all so expensive.

Another option would be for the Cavaliers to trade Haywood for a player earning less than the $10.5 million Haywood is scheduled to earn. Again, every $1 million that a player the Cavaliers trade for earns less than Haywood could be as much as $5 million in luxury tax savings. So trading Haywood for a player that is scheduled to earn even $7 million in 2015-16 could lower the Cavaliers luxury tax payment to a more reasonable but still insane figure of roughly $130 million.

And of course, the Cavaliers could also just outright waive Haywood and then sign a player to the veterans minimum. This would represent about $10 million in salary savings and roughly $52 million in luxury tax savings (In such a scenario the Cavaliers luxury tax payment would be approximately $95 million, a more reasonable but still insane figure).

LeBron of course won’t like that last option. He wants Gilbert to spend money and Griffin to find a quality player to spend that money on. Which means the middle ground is likely where this goes. As mentioned above, Matthew Dellavedova, while a decent enough defender, does not provide the kind of playmaking ability the Cavaliers need from their backup point guard. The Cavaliers could also use another wing that can match up with small forwards and stretch fours while also providing some offensive punch (kind of what Shawn Marion was supposed to provide), to not only keep things afloat when LeBron rests, but to enable the Cavaliers to give LeBron more rest throughout the regular season.

A quick survey of the league and we can find a few interesting candidates. (Note: as a team that will likely be well over the Apron, the Cavs will not be able to trade Haywood for a player doing a sign-and-trade) The Charlotte Hornets just dealt Lance Stephenson for a backup big and some cap relief, so perhaps they would be willing to do the same for Marvin Williams, who has one year and $7 million left on his contract. Wilson Chandler in Denver is also an interesting candidate. And if Dwyane Wade actually ends up leaving Miami, Luol Deng may be available in a trade. Could the Cavaliers somehow sweeten a deal enough to convince the Pelicans to give up on Tyreke Evans or Jrue Holiday? Not likely, but maybe Sacramento and George Karl are ready to give up on Darren Collison.

All this is to simply say that David Griffin will be kicking a lot of tires and rattling a lot of trees in July, using Haywood as the bait. And after his savvy moves at this past season’s trade deadline, it should be a surprise to no one (so long as Gilbert is willing to spend) if Griffin is able to turn the Haywood contract into a useful on-court piece for the Cavaliers to utilize next season.

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4. Will David Blatt Be Back?

Poor David Blatt. After a wildly successful career coaching overseas, he comes home to the States and as a first-year NBA head coach he gets his team to within two wins of an NBA Championship. And yet a day later, talking heads (this writer included) are publicly wondering if Blatt will be back on the bench next year for Cleveland.

Griffin, to his credit, has been unwavering in his public support of Blatt. However, the whispers around the team can’t be ignored. More importantly though, the fact that Cleveland never quite figured out how best to utilize Kevin Love should at least have the Cavaliers’ brass thinking about whether there could possibly be another coach better suited to this team’s needs.

The Cavaliers brought in Blatt originally thinking he would have the opportunity to mold a young team, much like Brad Stevens is doing in Boston. In reality, however, Blatt was handed a team with a mix of promising youngsters and veterans both in and past their prime. Blatt’s failings, if he has any, can wholly be attributed to his inability to get that mix of players, namely LeBron, to buy in to an offensive philosophy more in tune with Blatt’s teams in Europe and Israel.

That said, the Cavaliers still finished with the league’s fourth best offensive rating in the regular season (107.7 points per 100 possessions). The irony of it all is that LeBron went out of his way on numerous occasions during the Cavaliers first round sweep of Boston to praise Brad Stevens’s coaching ability, and much of Stevens’s success can be attributed to the fact that he was able to convince a bunch of young players to buy in to his system and philosophy, something LeBron seemed unwilling to do for Blatt, at least on the offensive end of the floor.

Can Blatt really be blamed for not getting LeBron to adjust his style of play? Especially when rumors have it that LeBron left Miami because he wanted more control over his team’s style of play, not to mention that LeBron’s way usually works out fine in the end (he is indisputably the best player in the world, after all). Not many coaches could have done much better given the circumstances of Blatt’s first season in Cleveland. That said, maybe there is a coach out there that could convince LeBron to make some adjustments to get Kevin Love more involved and more comfortable in his role with the team (John Calipari?). From the perspective of the Cavaliers’ front office, no matter how much they like David Blatt, this is a question worth examining.

Discreetly.

5. Will LeBron And Company Finally End The City Of Cleveland’s Title Drought Next Season?

The Cavaliers are already the odds-on favorites in Vegas to win the title next season. This is understandable considering they are in the watered-down Eastern Conference and they have LeBron James, the aforementioned best player in the world. LeBron and one of the worst NBA Finals supporting casts ever took a historically good Golden State Warriors team to six games, and had James hit a game winner at the end of game one, Cleveland could have been up 3-0 in the series at one point. A healthy Kyrie Irving alone could have dramatically changed how the series played out, let alone Kevin Love.

If Love returns next season, the Cavaliers will arguably have the league’s best four-deep big-man rotation in Mozgov, Love, Thompson and Varejao. Add in whatever they do with the Haywood contract plus some more luck on the health front, and there is no reason to think the Cavaliers shouldn’t be the overwhelming favorites to come out of the Eastern Conference. And once in the Finals, anything is possible with LeBron James.

I can’t wait for next year.

NOTE: All of the numbers reported in this article were roughly calculated using an estimated salary cap of $67.1 million and a luxury tax line of $81.6 million

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Sean Tshikororo

I'm an attorney and teacher by trade, but my true passion is sports and above all else the NBA. I was born and raised in Cincinnati, so I didn't grow up with an allegiance to any particular team, however, my NBA fandom tends to coincide with the teams that employ alums of my beloved UC Bearcats. Here at BBallbreakdown I'll be using my legal training and love of basketball to give you the lowdown on all things related to the CBA, the salary cap, and team management. Hit me up on Twitter @HANDFULofAUGUST and be sure to check out my personal blog HANDFULofAUGUST.com for random musings on the NBA and everything else that matters!

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