Dissecting The Golden State Warriors’ Salary Cap Space Situation

With free agency looming near, the Golden State Warriors have been linked with a number of high-profile players (Kevin Love, Jeremy Lin, LeBron James, Chandler Parsons).

However, just before Warriors’ fans start dreaming about a fantasy lineup involving LeBron, Curry and Love, we should all probably have a look at the Warriors’ cap space situation to see who they can realistically sign.

The 2014-2015 NBA cap space will only be officially announced in July (after the NBA conducts its audit), but this report claims that the salary cap is projected to rise by $5M to $63.2M, with the luxury tax threshold being $77M. These are all very important numbers, and affect the ability of each team to sign or trade players, as:

• Teams above the salary cap cannot sign free agents outright, and
• Teams above the luxury tax threshold cannot conduct sign-and-trades.

The Warriors’ 2014-2015 roster salaries (as of 26 June 2014) add up to $65.1M. This does not include the $3.2M qualifying offer being extended to Jordan Crawford (making him an unrestricted free agent). The roster looks like this: Andrew Bogut, David Lee, Andre Igoudala, Stephen Curry, Marreese Speights, Klay Thompson, Harrison Barnes, Festus Ezeli, Nemanja Nedovic, Draymond Green, Ognjen Kuzmic.

That roster salary leaves the Warriors over the soft salary cap, which means they are unable to sign free agents outright. However, they can still sign free agents through three other methods: the mid-level exception, bi-annual Exception and the minimum salary exception.

The mid-level exception allows teams to sign free agents to a contract for a specified amount. There are three different tiers: teams that paid the luxury tax last season, teams under the salary cap last season, and teams over the salary cap but under the luxury tax last season. The Warriors fall under the last category, and as such, their MLE is worth $5.3 million annually over four years. The MLE can be split between one or more players.

The bi-annual Exception can be used to sign any free agent to a contract starting at $1.67 million. This can be split among more than one player and can only be used by teams under the luxury tax. The Warriors, can use this to sign free agents.

Finally, the minimum salary exception can be used by any team, regardless of their salary status. This allows for any free agent to be signed for the minimum salary. A player’s minimum salary is determined by how long the player has been in the league. Here is a table of the minimum salaries.

Furthermore, as the Warriors are under the luxury tax apron, they can acquire players via trade and sign-and-trade. Now, this is where all the fun and tinkering with ESPN’s Trade Machine begins. Trading and receiving players is simple; as the Warriors are over the salary cap, the salaries the Warriors receive must not be more than 125 percent plus $100k of what they trade away. However, they still have trade exceptions acquired from previous trades sent out ($788k from Kent Bazemore, $1.2 million from MarShon Brooks, $9.8 million from Richard Jefferson), that they can use to balance the surplus in incoming trade salaries. The last caveat in a sign-and-trade is that teams over the luxury tax apron cannot sign-and-trade for a player, nor if that sign-and-trade pushes that team over the luxury tax threshold.

In summary, the Warriors cap space situation looks like this:

• $65.1M in guaranteed salaries (with $12M available to use on free agents/traded players before reaching $77M tax apron)
• $5.3M midlevel exception (can be spread out or used on one free agent);
• $1.67M biannual exception (can be spread out or use on one free agent);
• Any free agents signed to the minimum salary;
• Traded players that don’t exceed 125% plus $100k of the outgoing salaries;
• Sign-and-trades (provided the trade doesn’t push Warriors over the luxury tax threshold);
• Trade exceptions that can be used to match salaries in trades.

And now that you’re all the wiser, let the fantasy trades and signings begin!