It’s the same story again for the Thunder and free agency. The roster is virtually filled out, and with little money to spend, the only thing potentially to be done would be adding a few peripheral pieces.
Essentially, Sam Presti’s master plan is working well, but not perfectly. The real backfire to the plan is that Russell Westbrook, Serge Ibaka and James Harden were actually too good, at least too good too soon, and it meant the roster had to be broken up.
Still: The Thunder have a young, sustainable roster that is maintaining core consistency year over year and there’s not much to be done on the open market in terms of filling out the team. That frustrates some as they see other contending teams take a shot at a veteran player or a big name, but every year it illustrates that some still don’t understand the vision behind the construction of this roster. The Thunder were designed with the intention to avoid that.
Look at Sam Presti’s free agency history in terms of new signings:
- Signed C.J. Miles to an offer sheet, Utah matched (2008)
- Signed Nenad Krstic, in December, mind you (2008)
- Signed Kevin Ollie (2009)
- Signed Royal Ivey (2010)
- Signed Derek Fisher (2012)
- Signed Derek Fisher (2013)
The Thunder have drafted, cultivated and developed their players, spending virtually their entire budget on locking up players produced in house. It’s always been the plan since Presti took over. Draft, develop and sustain.
What that means is the money the team has is almost exclusively used to re-sign those players. If you feel like griping because the Thunder never sign anyone, don’t forget they’ve shelled out two max deals, a large extension to Serge Ibaka and contracts for Kendrick Perkins, Thabo Sefolosha and Nick Collison. The Thunder spend; they just spend it on players they already have.
So as free agency begins today, a few days after what some perceived as a disappointing draft, questions about possible solutions and help are circling. What can the Thunder realistically do in free agency?
What is the Thunder’s current salary situation?
2013-14 committed salary: $67,461,070, not including three non-guaranteed contracts (Hasheem Thabeet, DeAndre Liggins, Daniel Orton); if you include them, it’s $70,462,170.
Relevant, important note: The luxury tax is expected to be set at about $71.6 million next season.
Assuming the Thunder sign their two first round picks, they’ll have 14 players under contract for next season, leaving one spot open.
What kind of money can the Thunder spend?
Because the Thunder are over the salary cap, they only have two ways to sign a free agent. The first is through the mid-level exception and here’s how that works: Teams that did not pay the tax the previous season are eligible for the full MLE (about $5 million a year for four years) while teams that paid the tax get the mini-mid-level (about $3 million a year for three years). The Thunder can use the full mid-level, but it of course would make them a taxpayer next season.
The other way OKC can sign free agents is through the minimum salary exception. You sign a player to the veteran minimum (salary is based on a scale of years played) for a maximum of two years.
(There’s a third way, but it only applies to Kevin Martin, who has Bird Rights, which is an exception where teams can re-sign their own players while exceeding the cap, as long as the player hasn’t switched teams as a free agent in the previous three seasons.)
So let’s say the Thunder splurge and use the mid-level to sign J.J. Redick for $5 million a year. That would put their total payroll at $75,462,170, which is $3,862,170 above the tax line. What’s important about that number is that in order to use the full non-taxpayer MLE, you have to be below the luxury tax “apron,” even after you use the exception, which is set at $4 million above the tax line. So it works. That contract would put the Thunder in the lowest tax bracket, and would have them paying $1.50 for every dollar they’re over, which is a $5,793,255 tax bill. Essentially, Redick becomes an $10.7 million a year player. (Of course, those numbers are different if the Thunder waive those non-guaranteed players. They’d still break over the tax, but just slightly — about $900,000 or so.)
Sam Presti has never said the organization is philosophically opposed to paying the tax, but it certainly doesn’t seem like they’re that interested in it. At least not in a situation like this. The Thunder were willing to head into tax territory with James Harden, but Presti recently labeled that a special circumstance.
(Note: Had Harden accepted the four-year, $55 million offer from the Thunder, OKC’s total payroll would’ve been about $78.5 million next season, assuming they only carried 13 players, forcing them to pay about $12.25 million into the luxury tax. And it was only going to get worse.)
I think in the right situation, the Thunder would break into the tax. If they loved Redick — I’m using him as the example because I do love Redick — and saw him as a potential missing piece, they might just bite the bullet and take on the tax hit and maybe try and shop some players for picks, or waive the non-guaranteed guys. Some act as if the tax line is a hard cap. It’s scary, it’s ugly, it’s bad. But teams are paying the tax — hello, Brooklyn — and while most are hesitant to go deep into it, just dipping a toe isn’t so bad. The Spurs have paid the tax, granted the previous, less punitive one, but they have paid it.
So why don’t they just amnesty Perk, right?
All of this is one big reason why amnestying Kendrick Perkins made zero sense whatsoever. The general thinking by many was, amnesty Perk, use that $9 million in new cap space to go sign a new free agent big man. Well, wiping Perk’s contract off the books still wouldn’t put OKC under the cap meaning the only money they could spend on a free agent replacement would be the mid-level exception. And who are they going to get for that? Not Al Jefferson, not Nikola Pekovic, not likely anyone all that good.
A big addendum: The way to sort of skirt around this for teams is by using a sign-and-trade. However, in the new collective bargaining agreement, teams cannot be above that pesky tax apron — $4 million over the threshold — after the trade is completed. (This was a huge point of contention during the lockout two years ago.) So in the Thunder’s case, they could really only sign-and-trade a player worth about the MLE anyway. Let’s say the Thunder used the amnesty on Perk trimming $9 million, with a sign-and-trade the Thunder could spend up to around $15 million on a replacement. Sounds all well and good, except since the Thunder are over the cap, they’ve got to match up salaries on a deal, meaning good players would have to be traded to another team to complete it. Which really doesn’t make any sense.
Will/can they re-sign Kevin Martin?
Sure they can. There are two ways it could happen: 1) Martin decides he has unfinished business in OKC and wants one more run at a championship. He agrees to a mega-discounted deal of one-year, $3.5 million which barely scratches the luxury tax and does minimal financial damage or 2) the Thunder decide Martin is worth dipping a deeper toe into the luxury tax and give him the three years, $21 million he’s likely looking for.
A person close to the Martin talks says the chances of him return are “very unlikely.” With serious interest surrounding him throughout the league, there’s just little to no way the Thunder are going to put together a competitive offer to match the Pistons, Hawks, Mavericks, Pelicans or whoever.
Is using the mid-level exception actually a realistic possibility?
Look at it this way: Thabo Sefolosha is about to turn 30 and will be on an expiring deal this season. While the Thunder have another shooting guard ready and waiting in Jeremy Lamb, and a possible future Thabo in DeAndre Liggins, the depth at 2-guard could be thin in the future.
With Thabo’s $3.9 million coming off the books next season, there’s a chance the Thunder could bit the tax bullet for one season to add a little depth, let Thabo expire and have the new player for the next few years.
Complications: The Thunder probably would like to be able to re-sign Reggie Jackson in the coming years, so every penny saved now goes towards aiding that, and there’s also the issue of Durant and Westbrook’s deals have percentage raises each season. So Durant and Westbrook are actually going to make about a million more in 2014-15 than they did this season, and more than that the year after. Perk’s $9.6 million comes off the books then, so that helps, which is why having a possible contributor like Steven Adams on a rookie contract would be so important.
So in conclusions, the likely scenario: Nothing happens, Thabo is re-signed next season.
What are some options for the Thunder?
I don’t see the Thunder actually splurging — though it does feel a little dicey to really be relying on Jeremy Lamb this much — so if there’s a player to be signed, it’ll likely come at the veteran minimum. The Thunder could sign one vet and pretty much still avoid the tax. A couple candidates would be Stephen Jackson, Francisco Garcia, Derek Fisher (gasp), Ronnie Brewer, Martell Webster (wishful thinking), Terence Williams, Xavier Henry, Alan Anderson, Sam Young, Tracy McGrady and Willie Green.
Some of those players might get an offer better than the minimum, but it’s hard to really know right now. There is a feeling within the team more veterans are needed, though. And while the Thunder can’t really open up the checkbook and go get a big name free agent, a guy like Jackson — while damaged goods — is a playoff tested vet that would have the support of a lot of Thunder players. He’s friends with Perk, he’s tight with KD. There was that whole Serg Abaka thing, but I’m sure bygones could be teammates.
What are the Thunder probably going to do?
Nothing. Deal with it.
The Thunder will probably hold on to the open roster spot, stay under the tax and press on with the existing team, one that if I may remind you, is already pretty damn good.