‘Plan Powder' - our phrase so universally despised that even Mark Cuban himself tells us he hates it…
Mavs' Smart, Daring, Risky Option: Cut Dirk?!
With the Dallas Mavericks saying they are positioned to make a max offer to Dwight Howard, it leaves a question of where the last cap room might be coming from. Here's where they stand, and it's clear they're about $2.7M short.
*Guaranteed contracts (4) 36,007,049 … Nowitzki 22,721,381, Marion 9,316,796, Carter 3,180,000, Crowder 788,872 … B James and Akognon have non-guaranteed deals, so we haven't counted them. If needed they could be waived with no cap hit.
*Draft pick (1) 1,280,800
*Empty roster slots (7@490,180) 3,431,260
*TOTAL - 40,719,109
*EXPECTED CAP - $58,500,000
*CAP ROOM (58.5M cap) - 17,780,891
*MAX SALARY - Howard 20,513,178
*SHORTAGE – 2,732,287
There has been intermittent speculation that Shawn Marion might exercise his ability to opt out of his $9.3M final year, with an understanding that he would sign a new deal in July for a bigger total spread over several seasons (perhaps 3 years, $15-18M total). But his deadline to act is today, and there's been no indication he will do so. (Late Friday, Mavs sources told DB.com that they hadn't yet been informed of a decision. Our exclusive on Dallas' interest in trading for Rajon Rondo helps explain why options on Marion have remained open.) In addition, if the Mavs were to remove Marion from their salary list, it would make a sign-and-trade for Howard almost impossible if they were to land him, and it's better to leave the options open.
What else is possible? If the cap lands at $58.5M, to sign Howard to a max deal the Mavs would have to move one of the following (with no return salary): (a) Marion, (b) Carter and Crowder, or (c) Carter and Larkin. It's always possible they have a contingent swap lined up, if they need the space.
But there's another possibility that would clear way more room than they need, while leaving their talent base intact to build on. They could, in cooperation with Dirk, essentially "move" Dirk Nowitzki's free agency to 2013.
An actual internal "renegotiation" of his contract, to revise his pay somehow, is not allowed. But they could do almost the same thing, by doing it a different way. And the ideal time to do it is June 30.
Dirk's final season of his current contract is on the books for $22.7M, and his next deal will be much smaller. If we look at past deals for players in similar situations like Duncan, Garnett, etc., we can figure it might be a 2-year deal at about $10M per season. So the goal would be to take that total payout ahead and spread it evenly over the three seasons.
The process would begin with a "buyout" of Dirk's final season of his contract. Let's say they paid him $1M to tear up the deal. Then in July he would be a free agent, and they would sign him to a deal paying the remainder, say a 3-year deal paying $13.4M, $13.9M, and $14.4M. In doing that, his cap hit for 2013-14 would be reduced from $22.7M to $14.4M, freeing up an additional $8.3M in cap room this summer.
Such a move is possible under NBA rules, but there are risks. Presumably the relationship between Dallas and Dirk is so intertwined that both parties would feel sufficiently comfortable to tear up an existing contract and re-do it. The bigger risk, and one pointedly noted by the Mavs when we asked about this possibility, is in the buyout process.
In the NBA, a "buyout" actually consists of 3 steps: (1) team and player agree on compensation, in the event the player clears waivers, (2) the player is placed on waivers, available for any team to claim his contract if they have the cap freedom to do so, and (3) if he clears waivers, he receives the buyout compensation and becomes a free agent.
The Mavs' primary concern, and one that we're fairly certain will prevent them from attempting such a move, is that Dirk might get claimed on waivers in the process.
However, we think the odds of a waiver claim would be zero, if done on June 30.
In order to claim him, a team would have to have cap room for his $20.9M salary. The cap is about $58M, which means they would need to reduce their total salaries below $35M when we consider the charges for empty roster slots they would create in the process.
How close are teams to having that much cap room? The draft added about $50M more in cap charges to teams two days ago, and until we get to July 10 and enter a new cap year, almost every team is at or over the cap. Right now 20 teams (of 30) have salaries exceeding $64M.
Where could a team get that much room? They can't move players off their team to another that has cap room, since no one has cap room. They can't waive-and-stretch any 2012-13 salaries. They can't erase just-expired contracts from their 2012-13 cap no matter what they do. One avenue that might help would be to trade players to teams that have large Trade Exceptions (allowing them to take players without sending any back), but only 3 large ones exist: Orlando $17M, Memphis $9M, and Chicago $5M. And to ask one of those teams to take salary, it would be a request to add salary that they have been trying to subtract (which is why they have a TE).
But there's a more fundamental problem to such a quest. Any team wanting to get some other team to take a pile of contracts will need to send really talented players, or sweeten the deal with pick(s). The price will be considerable. But after giving up all that, what will they be getting for their trouble? They get a stripped down roster, plus Dirk for one season, after which he will be a free agent and presumably return to Dallas. Dirk is a great player, but the price is far greater than the prize.
In addition, we think the Mavs could change the chances from unlikely to impossible, by doing the buyout late in the day on June 30. When the waiver request is done on June 30, any team theoretically trying to find trade partners to make a massive number of trades to clear cap room would have less than a day to do so, since trades are not allowed on July 1-9. If they didn't already have the cap room (and no one does), they wouldn't have a chance to create it.
Are the Mavs planning such a move? While such a plan would be the answer to how they will have enough cap room to sign Howard to a max deal, all we know is that they see it as risky. In another day, we'll know if they'll use this daring, unlikely and dare-we-say clever move for their solution.
And then we'll file it away as an "NBA lab experiment'' -- but the sort of lab experiment we encourage the Mavs to continue to be aware of.