Patrick Murray: Now is not the time to panic about the Warriors salary cap
Friend of DNHQ comes out of retirement to remind us not to worry about the finances
A renewed bout of handwringing about the Warriors salary cap appears to have gripped Dub Nation after an article in the San Francisco Chronicle highlighting the latest upcoming crunch. At the heart of the matter is that both Jordan Poole and Andrew Wiggins will be eligible for new contracts which would kick in in the 2023-24 season, with the Warriors deep in the luxury tax.
I’m here to tell you not to panic. Not yet, at least. Yes the Warriors salary cap looks hideous for years in the future, not least due to the dreaded repeater tax which has hit for the first time this season. But I’ve written (some might say obsessively) about the Warriors salary cap for the best part of five years, and the one thing I can say with some authority is that they are a smart front office who always seem to manage to figure something out.
The biggest example of this was Draymond Green’s contract. There was no way they could pay all of Steph Curry, Klay Thompson, and Draymond Green, max deals right? Especially with another max deal (Kevin Durant/ D’Angelo Russell/ subsequently Andrew Wiggins) on the books? And it’s true, Green could have been eligible for an enormous new contract in free agency in 2020. But in the summer of 2019 the Warriors signed him to an extension on his current deal, averaging $25m per year rather than $35 million. Problem avoided.
Or perhaps you’ll recall when Durant decided to leave and rather than pocketing the savings the Warriors purposefully traded for another max deal in full knowledge of the long-term financial consequences of the looming repeater tax?
Perhaps you remember when they first turned down Kevon Looney’s rookie option? Plenty of ink was spilt about how they’d never re-sign him. Or when they got draft “steals” in the second round in Patrick McCaw and Jordan Bell? At various points in their brief tenures they were both expected to get the early bird max, which would have caused the Warriors some salary cap grief. Both are on the fringes of the league now.
I must admit I do find it amusing that figures such as $35m per year being touted for Andrew Wiggins’ next deal. Not so long ago his current, smaller, deal was widely viewed as literally the worst contract in the league. No doubt he’s redeemed some value, especially this season where imho he deserved his All-Star nod (even if he had a healthy assist from a pretty dubious vote-rigging effort). But the idea the rest of the league are queueing up to throw big money at Wiggins is pretty funny to me. Unless some team employs Daniel Hardee and Dr. Tom as joint GMs I can’t quite see it.
Would Wiggins really want to leave the franchise that has rehabilitated his value anyway when he’s earned so much already and he’s so clearly found a home here? Call it the Warriors culture discount, but I bet when push comes to shove he’ll sign for less than his max, Draymond-style. It’s not like they’ll be asking him to take the vet min, after all.
As for Jordan Poole, he’s had a great breakout season. He’ll command a decent contract no doubt, but $20 plus million for a streaky shooter who averages about 33% from three? Not so sure about that one. Go back to the lesson from Looney, McCaw, and Bell. Turns out teams around the league generally aren’t quite as high on Warriors role players as us armchair GMs.
There’s no doubt the Warriors will face some choices in their future. Here was my best guess in the preseason about what that might look like this coming offseason (you can probably go ahead and swap JTA and GP2’s contract numbers - Danny Leroux had a great piece on Payton’s contract situation recently - but it doesn’t feel far off to me). It seems highly unlikely they’ll be able to re-sign Otto Porter this summer, for example, and they won’t be using the taxpayer MLE. You’ll note that vaults them over that magical $400m mark which Bob Myers told me they wouldn’t do last summer.
While I don’t doubt that’s a level they still won’t want to go above it’s worth pointing out that answer was in the context of a team that had missed the playoffs and they had no real idea how good they would be. And don’t forget, Joe Lacob’s on record as saying they actually lost money last year because Chase Center was closed for so long.
The current iteration is a title contender, and in my book probably the favourite if Draymond Green comes back healthy. If they make the Finals, or win the whole thing, is Lacob really going to break that up? Especially with Chase back open and the dollars rolling in. Remember, despite those losses last season, the Warriors retained the second spot on Forbes’ most valuable franchise list which they wrestled from the Los Angeles Lakers after opening Chase Center for only about 6 months.
Moreover, since the time of writing, the salary cap and luxury tax for next season has been reportedly bumped up to $121m and $147m respectively as the NBA bounces back. With the repeater tax multiples being so high, the effect that will actually have is it will drop the Warriors under that $400m for next season.
So what we’re really worrying about here is the summer after that. If they’re $45m over the cap, that’s a repeater tax bill of $208.25m, on a salary bill of around $200m. As an illustration of how they could get there, pencil Wiggins in for $25m as a starting salary on top to the table in that linked piece (while perhaps bumping Poole up to closer to $15m), remove one or two of those mid-sized contracts (maybe GPII/ JTA doesn’t get that full c.$6m assumed or Wiseman is good enough to move on from Looney), perhaps use one of the late first rounders they’ll have over the next couple of seasons on an overseas prospect to draft-and-stash thereby removing that salary from the books, and/ or allow for a bit more inflation in the salary cap and you’re not too far off dropping below that $400m figure.
What’s more, the Warriors might get a bit cheaper after that as Klay and Dray come off the books. Klay in particular might be persuaded to sign a less astronomical deal on the back end of his career. Wiseman will be up for his rookie extension, but even if he has a good season next year they may well be able to get him to sign for less than the c$30m max he’d be eligible for given his career to date. And by that point anyway you’ll be approaching a new TV deal and a new CBA which could make all these numbers look like peanuts.
All that’s to say that given the history around a financial apocalypse looming over the Warriors for half a decade, yet never actually materializing to the point they have to sacrifice core players, I’m certainly not panicking yet.
Dub Nation HQ is an ad-free, reader-supported publication. To help us create more awesome content like this, consider becoming a free or paid subscriber.
Late to the party, but great stuff as always, Patrick!
Also, I’m guessing you were the only one rooting for Toppin to beat JTA in the dunk contest 😁
Would be very sorry to lose OPJ and possibly GPII, but keep JP.