Transcript of Explain: Warriors Decisions on Klay, CP3, Looney, GP2 & Free Agency | with cap analyst Perks
A little present for paid subscribers
Discussion Thread
Where to discuss this video with all commenters.
Original Video
A list of all Explain One Play articles and videos is at The new Explain One Play Search Engine.
Eric Apricot and Perks from GSW Reddit dive deep into the Golden State Warriors' salary cap situation and potential free agent moves. They discuss the complexities of the NBA salary cap, the impact of new tax regulations on the Warriors, and key strategies to navigate out of the second apron. The conversation covers possible roster changes, including the fate of players like Chris Paul, Klay Thompson, Gary Payton II and Kevon Looney, and explores realistic free agent targets.
0:00 Intro
00:39 Review of the New NBA Salary Cap Penalties
02:30 Chris Paul's Magical Contract and Avoiding Penalties
11:43 Paying Klay 1
14:39 Gary Payton II
16:28 Kevon Looney
20:58 Paying Klay 2
25:11 What if Klay leaves?
29:36 Mid-Level Free Agents
39:07 Minimum Contract Candidates
43:18 Buying Another Draft Pick
Transcript
Note that the conversation makes more sense with the video, as we refer regularly to Perks’s spreadsheet. However, this will give you the idea, and you can watch the video if you want to understand something better.
Apricot: Hello everybody. This is Eric Apricot, and I have as a guest, Perks from GSW Reddit. Also on Twitter, he is @GSWCBA. Perks, do you have an official title at Reddit?
Perks: I used to do the GSW Reddit Twitter for a while. I'm just one of the moderators there and making some content now and then on the CBA account.
Apricot: It's becoming a tradition where you talk about what free agents the Warriors might be going after and what cap drama will be coming up. So this seemed like a good time, on June 14th, to check in before everything hits the fan.
Review of the New NBA Salary Cap Penalties
Apricot: The NBA has a pretty complicated salary cap. There's a salary cap which is estimated at $141 million coming up, and that is a very soft cap. You're allowed to go over it with lots of different exceptions, but once you hit about $172 million, you have to start paying taxes on it, which is some multiplier of the amount of money you're over this tax level. And then after that, they added this more punishing apron where if you're really over the tax, then in the new agreement, you have all kinds of different penalties:Â your salary matching in trades is harder, and you can't sign waived players who make above a certain amount of money and that kind of thing.
And then there's an even more punitive thing, which is the second apron, and that's a thing everyone's been talking about, and this has just been new in the collective bargaining agreement, basically to get the Warriors. So the Warriors didn't mind being over the tax line and didn't mind being over the apron. They just ate it, and they just paid out the money. The NBA decided, okay, the only way to get the Warriors to stop paying for a good team is to make it so you can't build a team anymore once you're above the second apron. And that's it. So now there are new penalties. It used to be that you'd have this mid-level exception, and then you'd get a lower one if you were over, I guess, the apron. Now, with the second apron, you can't even have any mid-level exception, which is pretty serious. That's how we got Donte DiVincenzo a couple of years ago.
Beyond that, things happen to your picks, like you can't trade picks seven years out. And then if you're in the second apron three out of the five, then you just more or less lose your first-round pick. It becomes, I think, number 30. So these are serious enough that even the Warriors had to pay attention to this. And so there's all this stuff about getting out of the second apron.
Chris Paul's Magical Contract and Avoiding Penalties
Apricot: Looking at your spreadsheet, Perks, it looks like as soon as you waive Chris Paul, are we pretty much out of the second apron?
Perks: Yeah. Obviously, you have to keep in mind all the cap holds and stuff, right, for guys like Klay, if you plan on bringing them back. But once you waive Chris Paul, the Warriors' salary will fall down to that $145 million. So at that point, you are not even a tax team, right?
Apricot: What we've got on the screen right now is that we've waived Chris Paul, and at the moment, Klay is not factored in.
Perks: Yes.
Apricot: But then we also have to factor in four loose roster spots. Probably minimums, which is probably something like 2 million dollars. There's about eight million eaten up there. This is actually a pretty fine line, isn't it? How much we could offer Klay and stay under the second apron.
Perks: It depends a lot on what their goals are going into the offseason. Lacob, I think it was like February and March, he was on a podcast with Kawakami where he talked about how one of their options is to try to get below the tax completely. And obviously, that's important because of the repeater rate.
So if you go over the luxury tax calculator, there's basically two different levels of tax that you pay based on how many years you've spent in the tax. So if you spent the last three out of four years in it, you pay the repeater rate. So the Warriors are currently a repeater rate team. So for them, financially, it would make sense to not be a tax team for the following two seasons, because then that whole cycle would basically reset itself.
So I think unless the Warriors can get a really monumental trade, we know they always love their Giannis and Embiid types, and there's been some Jimmy Butler noise, but I think it would take that level of player for them to be willing to be like, okay, we'll stay in the tax. We'll eat the repeater rate again. And we'll figure it out later on. Option one is to try to get someone of that level so they can be a top team in the league. If that doesn't happen, then I would very much expect them to be going into this offseason thinking, okay, let's be a team that's below the tax so we can escape the repeater. And we're going to try to just bring back Klay and then make use of the MLE, the minimums, and then obviously the draft pick that they have to fill out the rest of the roster.
Apricot: What would they have to do to get under the tax completely?
Perks: Obviously, it starts with waiving Chris Paul. We can have a larger discussion about what sort of optionality they have with that. His guarantee date is coming up on the 28th, so they have about two weeks to decide. There is no chance that Chris Paul is on the Warriors next season, especially not for 30 million. The only scenario I could see them guaranteeing that contract is if they already have a trade lined up where they're using that to get that bigger piece, but I just feel like that's such an unlikely scenario that we can basically just table in Chris being waived straight up.
Apricot: There have been a lot of questions about this magical Chris Paul contract. Owed 30 million or so on paper, but zero of it is guaranteed, right? So if they waive him, bam, he just gets nothing. But then there's all this talk about the Warriors could negotiate with Chris Paul to guarantee a smaller amount of it, and they could negotiate with Chris Paul to change the deadline after which they have to make the decision. If the Warriors wanted to trade Chris Paul for, say, a 15 million dollar person, then in theory, they could come to an agreement with Chris Paul to guarantee 15 million. Is that right?
Perks: Yeah. As of now, his contract is worth zero in trades. So in order for it to be used for any sort of salary matching, you have to guarantee a portion of that. So when Chris was traded last year from the Suns to the Wizards, I think at that point, his contract was either not guaranteed or it was only guaranteed for a smaller amount. So they had to bring up that guarantee to get to the salary matching that they needed for the Beale trade.
In the Warriors case, if you want that 15 million dollar player, you would need to guarantee, using Paul's salary, you need to guarantee an amount necessary in order for the salary matching to be able to work. And then the thing to keep in mind though, is until the end of this league year, so that's the 23-24 league year, the Warriors are currently operating as a second apron team, so that means that if you want to trade Chris Paul before the league year is over, you can't aggregate his salary. There's all the restrictions that are in place for the second apron team.
So what would be beneficial for the Warriors is if they could negotiate with Chris to move back that guarantee date from the 28th to July 6th or something of that realm. But obviously, for Chris, I feel like he, if he's not going to stay in Golden State, he obviously wants to have a better idea of what team he's going to go to. And usually, free agency opens up right on the 30th. So 30th, 1st, 2nd. Those are the days where all those big dominoes fall. So I don't know if he would be very open to pushing back that date because that would put him in a worse position to figure out what his team is next season.
Apricot: CP3 has to agree on how much gets guaranteed? Or is that not true?
Perks: That's a good question. He doesn't have a no-trade clause, so he can't veto any trade. I believe when it comes to guaranteeing the portion of salary required to move a non-guaranteed player, I don't believe the player has to agree to it, but I can't give you a firm answer on that. So I would say no, but let me circle back and figure out that for sure.
Apricot: Okay. That's homework for you.
Perks: Yes, it is.
Apricot: I hadn't thought about Chris Paul not wanting to move the date because I'd seen a report he was open to that. But what I hear you saying is that it might be better for him to do it before free agency because then there'll be more teams basically wanting someone like him.
Perks: If I look at it from his perspective, I would think that the Warriors, by the 28th, should have a good idea of whether or not there's a trade that they can use Chris Paul for. Obviously, they're not supposed to be negotiating, but I'm sure they're having conversations. And I think by that point, they should know whether or not it's going to happen. So if I'm Chris Paul, and if there isn't a trade lined up, I don't think I'm going to be willing to do that because I could tell them, look, just waive me straight up. I'm going to enter free agency.
I'm sure there's a team out there willing to give me at least a taxpayer mid-level, that's 13 million right there. Maybe that offer isn't there if I'm hitting free agency on July 6th, July 7th, right? When most of these guys have already been signed and a lot of that money, especially the cap space money dries up. From his perspective, I think he would want to control what situation he goes through, right? He obviously wants to play, ideally he would like to start, and ideally, he would like to make the most money possible, so I don't think he would be willing to push it back, but maybe I'm wrong, maybe they can figure out something, but I think it would have to be like, there's definitely a deal we can get done, because otherwise, there isn't really a reason for him to do that.
Apricot: This is a big digression because we were saying can the Warriors get completely out of the tax? And so let's just assume they just straight up waive Chris Paul, 30 million down, and then are they already under the...