Sunday Musings: Salary cap jump adds intrigue to Sacramento Kings’ wild summer

Rudy Gay and Isaiah Thomas as the Sacramento Kings get blown out by the Philadelphia 76ers. (Photo: Tobin Halsey)

Sacramento Kings fans have become accustomed to crazy offseasons.  Failed relocation attempts, arena negotiations and ownership changes have overshadowed an otherwise poor product on the floor.  But this summer is different.  This summer is filled with actual basketball-related drama, and things are going to get really interesting.

A 28-win team needs help – more help than a single draft pick can provide, and that might be all that Pete D’Alessandro and his staff have at their disposal.  That is, unless they lose Isaiah Thomas and/or Rudy Gay to free agency.

D’Alessandro received a bit of good news on Friday when salary cap guru Larry Coon announced that the NBA salary cap and luxury tax figure is primed to make a major jump.  Whether you are a cap aficionado of not, the dollars and cents this season are worth analyzing closely.

Last season, the NBA salary cap was $58.679 million, and the luxury tax sat at $71.748 million.  According to Coon, those figures are projected to jump to $63.2 million for the salary cap and $77.0 million for the luxury tax for the 2014-15 season and $66.5 million cap and $81.0 million luxury for 2015-16, respectively.

The figure to focus on for Sacramento is the luxury tax number, unless Gay opts out and leaves in free agency.  With DeMarcus Cousins set to make approximately $13.7 million next season and the remaining eight players under guaranteed deals making close to $33.3 million, the Kings have around $47 million locked in.

That figure goes sideways when you add in Gay’s player option at $19.3 million.  If Gay stays under his current deal, the Kings are already at $66.3 million without Isaiah Thomas, Quincy Acy’s option ($947K) and roughly $3 million slated for the seventh overall selection in the NBA Draft.  With Gay and the seventh pick added in, Sacramento would only have $7.7 million to possibly sign Thomas and one or two more players.

$7.7 million might not be enough for Thomas by himself, let alone to fill out the remaining roster spots.  Barring trades, that would leave D’Alessandro with virtually the same 28-win team from last season with only the seventh pick added.

If Gay walks, then the Kings have around $15.2 million in cap space to spend, minus a couple of cap holds and a qualifying offer of approximately $1.7 million for Thomas, who reached “starter criteria” this season.  While this is confusing, we are talking about cap space here, not luxury tax.

The third option for Gay is to opt out and lock into a long-term deal with Sacramento.  The Kings own Gay’s “Larry Bird rights” and can sign him to a new deal for up to five years, without regards to the salary cap.  Any other team looking to sign Gay as a free agent is limited to a four-year deal and must stay within the constraints of the $63.2 million cap figure.  With Gay turning 28 years old on Aug. 17, that fifth year may make all the difference in negotiations.

If Gay accepted less than his current $19.3 million in salary for next season in a new long-term deal, the Kings would automatically free up more space to either pay Thomas more and/or add other free-agent acquisitions.  Thomas is a restricted free agent, meaning he can shop himself on the open market, but Sacramento will have the right to match any offer.

For Kings fans, Gay opting out and re-signing long-term is probably the perfect situation.  If Gay voids the final season of his deal and signs something in the neighborhood of a 5-year/$60-70 million deal with a starting salary around $12 million a year, that would give D’Alessandro roughly $14.7 million to play with under the luxury tax , not salary cap.

Under this situation, D’Alessandro could add veteran help to fill in the voids and continue to build on of the current roster. He would be limited to how he used the funds, especially if he decided not to retain Thomas, but at least he would have breathing room under the tax.

Possibly the biggest variable for Sacramento going forward is how does D’Alessandro, coach Michael Malone and owner Vivek Ranadivé see this team.  Do they see it as a work in progress with a solid core or do they want more wholesale changes?

Is Thomas in their long-term plans?  Can they convince Gay to stay?  Can the seventh pick, along with veterans Carl Landry and Jason Terry fill the team’s biggest voids?  Can D’Alessandro make another move or two that changes the look and feel of this roster?

There are more questions than answers, as there should be when a team is drafting in the NBA lottery for the eighth consecutive season.

Adding to the intrigue is the fact that the Kings are actually in solid salary position moving forward.  Derrick Williams ($6.3M), Jason Terry ($5.9M), Travis Outlaw ($3M) and Reggie Evans ($1.8M) are all expiring contracts after next season.  If Sacramento is in contention at the deadline next season, D’Alessandro is going to be a flat-out gunslinger at the deadline with more bullets in his gun than almost any other GM.  If these players aren’t moved between now and the February deadline, D’Alessandro will clear $17 million off the books next summer, when the tax jumps to $81 million.

This means that if Sacramento goes for broke during free agency this season and pushes above the $77 million luxury tax, they would owe tax money, but it is unlikely that they would be repeat offenders, especially with a potential new CBA negotiations almost a certainty before the 2016-17 season.

There are so many nuances to the NBA salary cap.  This is a brief overview of what can happen, but regardless of what fans would like, D’Alessandro and his group have their own vision in mind for this team.  They will make tough decisions that not everyone will agree with and to a certain extent, they are at the mercy of Rudy Gay, Isaiah Thomas and the teams around the league that have circled these players as potential targets.

Is this team a piece or two away from making a tremendous jump like the Portland Trail Blazers, Charlotte Bobcats and Phoenix Suns did this past season?  How important are Thomas and Gay to the overall picture?  Do you pay luxury tax-type money for a team that could once again miss the playoffs?

These are just a few of the questions that will have to be answered sooner rather than later.    If the Kings want to compete for a playoff spot, they are going to have to spend, and they know that.  Welcome to the realities of the NBA.

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About: James Ham

James Ham is co-owner and senior editor of Cowbell Kingdom, providing extensive Kings coverage through news analysis, in-depth interviews with players and staff and daily coverage of breaking news. Along with providing original content for the site, including the Cowbell Kingdom Podcast and his weekly Sunday Musings column, James also is one of the producers behind the award-winning, independent documentary film "Small Market, Big Heart".