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A (seemingly) exhaustive review of the value of expiring contracts

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  • A (seemingly) exhaustive review of the value of expiring contracts

    On the Pick and Scroll.

    After spending all these hours looking at these deals for expiring contracts, I've come to the conclusion that in the right hands, an expiring contract can be a very useful tool for a team. Oklahoma City's GM Sam Presti seems particularly adept at exploiting the power of the expiring contract, and his team has profited from this.

    In the upcoming season, I expect there might be more movement of expiring contracts than ever, as teams try to prepare for the upcoming CBA, expected to cut salaries across the board. A few teams stand out to me to be in a position of strength this year when it comes to Expiring Contracts:

    Indiana: Indiana already has taken advantage of one of their expirings in Troy Murphy, but they also have the contracts of Mike Dunleavy and TJ Ford. Even if the Pacers don't deal those two, they'll be one of the most financially flexible teams next year, with about $35 million committed in salary.

    Follow the link for the rest - it's worth the time

  • #2
    Re: A (seemingly) exhaustive review of the value of expiring contracts

    Dandy article, Count.

    Comment


    • #3
      Re: A (seemingly) exhaustive review of the value of expiring contracts

      as I was reading and thinking about this. I wonder if the Pacers have decided that they don't want cap space on July 1st. Who knows what the new CBA will bring, there could be huge changes to free agency, to the cap, there could be a hard cap, more revenue sharing. Maybe the Pacers have decided, they will trade all their expirings between now and June 30th 2011, so they have a team set ready to go when the lockout ends.

      Also if I remember the last lockout several of the players (Vin Baker, Shaun Kemp to name two weren't the same after the lockout. if you reach a certain age and stop working out, you might not be able to regain what you had. Plus free agents not signed have no incentive to stay in shape, what if they get injured. Teams won't be able to check up on free agents if the lockout is like last time

      So I think by June 30th the pacers will have traded each of their expirings, or almost all.

      I'm sure there is a valid argument to my theory, but this is what I think today.

      If i were Bird and Morway I wouldn't wait for July 1st because it may never come in the form it has been for the past 11 years.
      Last edited by Unclebuck; 08-13-2010, 02:43 PM.

      Comment


      • #4
        Re: A (seemingly) exhaustive review of the value of expiring contracts

        I have always thought it would be very advantageous to be able to rebuild most of our salary structure under the new CBA rules.

        Comment


        • #5
          Re: A (seemingly) exhaustive review of the value of expiring contracts

          Originally posted by Unclebuck View Post
          as I was reading and thinking about this. I wonder if the Pacers have decided that they don't want cap space on July 1st. Who knows what the new CBA will bring, there could be huge changes to free agency, to the cap, there could be a hard cap, more revenue sharing. Maybe the Pacers have decided, they will trade all their expirings between now and June 30th 2011, so they have a team set ready to go when the lockout ends.

          Also if I remember the last lockout several of the players (Vin Baker, Shaun Kemp to name two weren't the same after the lockout. if you reach a certain age and stop working out, you might not be able to regain what you had. Plus free agents not signed have no incentive to stay in shape, what if they get injured. Teams won't be able to check up on free agents if the lockout is like last time

          So I think by June 30th the pacers will have traded each of their expirings, or almost all.

          I'm sure there is a valid argument to my theory, but this is what I think today.

          If i were Bird and Morway I wouldn't wait for July 1st because it may never come in the form it has been for the past 11 years.
          I remember on an NBA today podcast, the host said that Danny Ainge thought cap space to sign Free Agents was way overated. He'd rather trade for guys. He said you over paid with FAs, had longer/full contracts. With Trades, you pretty much knew what you were getting.

          Makes sense to me.

          If you think FA players won't flock to Indy, this is the way to go, I think.

          Plus there's not as big a worry that a guy just got paid and is guaranteed his salary, so he starts to phone it in.

          Comment


          • #6
            Re: A (seemingly) exhaustive review of the value of expiring contracts

            Originally posted by Larry Staverman View Post
            I have always thought it would be very advantageous to be able to rebuild most of our salary structure under the new CBA rules.
            My guess is maybe it would be advantageous to the Simons pocketbook to wait and rebuild the roster under whatever the new system will be, but I think it will be easier to build a really good team under the current rules then to wait for the new rules.

            Assuming the owners get a good percentage of what they want in the next CBA, teams won't be able to spend as much money, so the teams that are built and set using the current rules should be ahead from an on the court competitiveness standpoint than those teams that wait until after the new CBA.

            Comment


            • #7
              Re: A (seemingly) exhaustive review of the value of expiring contracts

              I serously doubt the Pacers will trade all or nearly all of their expirings. It took a hellacious long time to get one off the books, and Murph was our best expiring. Dun and Foster are dead until proven otherwise, TJ is nearly dead.

              Besides, 20M or more in room is useful. Not saying a star comes in the door immediately -- as the Bulls can testify -- but it will eventually come into play. They're at least in the free agent playfield.

              And finally, in the real world, I'm sure the owners would not mind a year or two with less than 50M or 60M payroll.

              Comment


              • #8
                Re: A (seemingly) exhaustive review of the value of expiring contracts

                Originally posted by Unclebuck View Post
                as I was reading and thinking about this. I wonder if the Pacers have decided that they don't want cap space on July 1st. Who knows what the new CBA will bring, there could be huge changes to free agency, to the cap, there could be a hard cap, more revenue sharing. Maybe the Pacers have decided, they will trade all their expirings between now and June 30th 2011, so they have a team set ready to go when the lockout ends.

                Also if I remember the last lockout several of the players (Vin Baker, Shaun Kemp to name two weren't the same after the lockout. if you reach a certain age and stop working out, you might not be able to regain what you had. Plus free agents not signed have no incentive to stay in shape, what if they get injured. Teams won't be able to check up on free agents if the lockout is like last time

                So I think by June 30th the pacers will have traded each of their expirings, or almost all.

                I'm sure there is a valid argument to my theory, but this is what I think today.

                If i were Bird and Morway I wouldn't wait for July 1st because it may never come in the form it has been for the past 11 years.
                The Pacers have about $33mm coming off their books next summer, of which only about $28mm is "trade-able."

                If you operate under the basic assumption that trading any or all of these contracts equates to effectively taking on contracts going forward, then you must assume that the Pacers will allow some of these to simply expire and take the savings themselves.

                Obviously, Tinsley's $5.5mm will be taken as savings, and, personally, I expect them to allow another $10-15mm to simply expire. This would theoretically mean that they would only trade about half of their remaining contracts.

                The Pacers will not and cannot trade all of their contracts, because they can't afford to rebuild their payroll to where it has been. Besides the fact that it is not survivable for a small market franchise, it also would be foolish to go into the lockout with a payroll that large - without knowing what would happen.

                Additionally, it would be foolish to "spend" all of their money in trades this summer or this year or in free agency next summer, because it will create limitations down the road. This is not a good idea, because they will have to address the long term, post rookie contract status of Roy Hibbert and Brandon Rush almost immediately following the lock out. Rush, as I mentioned in another thread, I expect to be cheap, but Roy probably won't be.

                This is why I see no sense at all in keeping Ford around until the deadline in hopes of trading him. He offers no real cachet in terms of skill sets, and we have plenty of other expiring contracts to deal later if we want. If I can't trade him this summer, I take him as cost savings for next season (meaning I cut him).

                Comment


                • #9
                  Re: A (seemingly) exhaustive review of the value of expiring contracts

                  Originally posted by Unclebuck View Post
                  My guess is maybe it would be advantageous to the Simons pocketbook to wait and rebuild the roster under whatever the new system will be, but I think it will be easier to build a really good team under the current rules then to wait for the new rules.

                  Assuming the owners get a good percentage of what they want in the next CBA, teams won't be able to spend as much money, so the teams that are built and set using the current rules should be ahead from an on the court competitiveness standpoint than those teams that wait until after the new CBA.
                  It all depends on what the CBA looks like. There's a very real possibility that a team built under the old CBA rules could be handcuffed and at a significant disadvantage under the new CBA.

                  Comment


                  • #10
                    Re: A (seemingly) exhaustive review of the value of expiring contracts

                    Originally posted by count55 View Post
                    It all depends on what the CBA looks like. There's a very real possibility that a team built under the old CBA rules could be handcuffed and at a significant disadvantage under the new CBA.
                    True, and I don't want to repeat myself. Maybe it depends how good of a team you are on June 30th. If you are the Lakers or the Heat, you don't care if you are handcuffed because you have a team set to win.

                    I would think if the system is changed drastically - lets say a hard cap that a team that is over the hard cap will be grandfathered in - in other words they won't have to slash salary for the sake of the new hard cap. It will have to put in over a a 3 or 4 years period.

                    if they put a hard cap at $60M for example and force teams to terminate current contracts to get under the hard cap. The players will never agree to that and I doubt the owners would hold out for that because teams like the lakers, Heat, Celtics won't want it.

                    Yeah, I know Tinsley is not tradeable. But if Foster shows he can play 10 - 15 minutes a night he will have a lot of trade value in February, same with Dunleavy if he can show he can play 25 - 30 minutes a night.

                    Ford is a different story, pacers want him off the roster now.

                    I'm not suggesting the Pacers will or should trade the expirings just for the sake of trading them before July 1st, only if they get a deal they like. But I also don't think they will or should not trade them just to have cap space on July 1st.
                    Last edited by Unclebuck; 08-13-2010, 03:26 PM.

                    Comment


                    • #11
                      Re: A (seemingly) exhaustive review of the value of expiring contracts

                      Originally posted by count55 View Post
                      Additionally, it would be foolish to "spend" all of their money in trades this summer or this year or in free agency next summer, because it will create limitations down the road. This is not a good idea, because they will have to address the long term, post rookie contract status of Roy Hibbert and Brandon Rush almost immediately following the lock out. Rush, as I mentioned in another thread, I expect to be cheap, but Roy probably won't be.
                      Yep!

                      This is why its a limited time that you can keep the flexibility. Eventually you have to start retaining the young pieces at a higher price. Eventually OKC will have to pay their key guys and the flexibility dwindles.

                      I'm not for being up against the luxury tax and not being financialy viable, but you have to be willing to maybe spend for value if it presents itself.

                      If you don't sign a key piece or trade for one in the next 3 years, you won't be able to, or might not, cuz you'll have spent that money on keeping your guys.

                      As for the new CBA, it could be a hard cap, but I'd guess they'll either grandfather it in or make is a hockey type across the board type reduction. I don't think it will ever come to them saying look in the 2012/2013 you have to cut down to 60 million by getting rid of guys, right now. Mainly I say this because you'd have to say to LA and Miami you have to dismantle. I can't see them accepting that.

                      Ya, under the new CBA you should be able to not have such a high max player and should be able to reduce the number of years.

                      I guess, I'm rambling, but my main point is, it could be advantageous to teams to load up under the old rules or it could be advantageous to load up under the new rules, it really depends on how the CBA is configured.

                      Comment


                      • #12
                        Re: A (seemingly) exhaustive review of the value of expiring contracts

                        It is possible that they will prorate the salaries to fit under the cap. Allowing the players to still make their full contract, but have the cap hit be relative to percentage of pay roll currently(or something similar).

                        Comment


                        • #13
                          Re: A (seemingly) exhaustive review of the value of expiring contracts

                          I'm just saying that if there's a deal that Bird really likes, he should make it, but he shouldn't feel the need to deal the expirings if there isn't one.

                          Comment


                          • #14
                            Re: A (seemingly) exhaustive review of the value of expiring contracts

                            Originally posted by count55 View Post
                            I'm just saying that if there's a deal that Bird really likes, he should make it, but he shouldn't feel the need to deal the expirings if there isn't one.
                            Thanks for the article.

                            I know this has been said before but "if" you are under the cap then the players salary's don't have to match in a trade, Right?

                            If thats the case then I want atleast half of the expiring's coming off the books so we can deal with the 9 teams over the luxury tax next year.

                            I predict that teams like Boston, Dallas (maybe), Denver and Houston will come back to earth and want to be closer to the LT threshold after they see that its not working out for them.

                            This isn't even mentioning other teams that believe that the CBA will go south and want to be even lower in player salary then they are now.

                            Its all hard to know how the CBA will go but you have definitely sold me on cap flexibility.

                            Comment


                            • #15
                              Re: A (seemingly) exhaustive review of the value of expiring contracts

                              Originally posted by Speed View Post
                              I remember on an NBA today podcast, the host said that Danny Ainge thought cap space to sign Free Agents was way overated. He'd rather trade for guys. He said you over paid with FAs, had longer/full contracts. With Trades, you pretty much knew what you were getting.
                              I recall that, too. But cap space gives you trade flexibility as well, especially with the numbers the Pacers anticipate next year.
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