Golden State Warriors Salary Cap FAQ

Free agency has officially started and many deals have been done in just the first day alone. The Golden State Warriors made a few moves of their own, but aren’t expected to be big players in the free agency market due to their salary cap situation and the overall strength of their roster. Not many organizations will break up a championship winning roster (unless you’re the 2011 Dallas Mavericks), so it’s safe to assume that we’ll be seeing the same core of Warriors return for the 2015-16 season.

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However, there are a few decisions that the Warriors have to make during free agency, and we could even see them add more players to their roster. Figuring out the salary cap can be quite daunting and tricky, so I’ve laid out a few frequently asked questions regarding the Warriors and their salary cap situation.

For reference, here’s what the Warriors’ salary cap situation looks like now (courtesy of Spotrac.com)

Golden State Warriors’ Salary Cap Table (courtesy of

Spotrac.com

)

Q: Didn’t Draymond Green just sign a contract extension? Why isn’t that showing up on the table?

Yes, Green signed a five year, $82 million contract extension on the first day of free agency. The details of the deal have not been reported yet, and NBA teams are prohibited from making public statements regarding successful or completed negotiations of terms with a player until July 8 (when the NBA free agency moratorium ends).

Of course, this doesn’t prohibit players from making public statements regarding their free agency status – Green heavily implied that he signed a hefty extension with an Instagram photo of him breaking the news to his mother.

Q: What is the moratorium?

The NBA free agency moratorium is when the NBA and NBPA conducts an audit that will determine how high the next season’s salary cap figure will be. This will affect max contracts which are calculated based on a percentage of the season’s salary cap.

Q: What was Green’s max salary figure?

Max contracts in the NBA are calculated based on a percentage of the season’s salary cap. Players are then categorized into tier groups based on their years of experience in the league: players with 0-6 years of experience can receive a max contract that constitutes 25 percent of the cap; players with 7-9 years of experience can receive a max of 30 percent of the cap; and players with 10 or more seasons can receive a max of 35 percent of the cap.

Green falls under the first category: 0-6 years and 25 percent. The salary cap figure for the 2015-16 season hasn’t been released, but it is expected to be around $67.1 million as per RealGM (but that figure could rise by $2 million). If so, Green was eligible for a max of $93.1 million over five years (the Warriors could offer Green an extra year and more money compared to other teams because they own his Bird Rights).

Draymond Green's deal with GSW is a fully-locked 5-year deal, sources say. No options either way. And it's 5-years, $82M.
— Zach Lowe (@ZachLowe_NBA) July 2, 2015

NBA source: Draymond Green's deal is worth $82M.
— Tim Kawakami (@timkawakami) July 2, 2015

If the figure that Zach Lowe and Tim Kawakami reported is right, Green left close to $11.1 million on the table. It doesn’t sound like much, since the cap is set to rise dramatically the following season, but it will help the Warriors with flexibility and staying under the luxury tax line. At $14.25 million next season, Draymond Green is now the Warriors’ third highest paid player (per season) on the roster.

Meanwhile, Stephen Curry, at $23 million over the next two seasons, is the sixth highest paid player.

Q: What does his contract mean for the Warriors’ payroll moving forward?

Note: this is where things get tricky. There are a lot of figures involved and a lot of the numbers used are correct at the time of publishing. People who hate math might want to skip ahead.

The Warriors’ current payroll (with Draymond Green’s updated figure) is now $99.8 million. If the salary cap for next season is $67.1 million, the Warriors will be way over the luxury tax line of $81.6 million.

The luxury cap is calculated in tiers:

NBA Luxury Cap Table (courtesy of

cbafaq.com

)

Currently, the Warriors fall under the $15 million – $19.9 million tier. Their luxury tax calculations will look like this: Incremental maximum for the previous three tiers + [(value over luxury tax line – $15 million) x $3.25]. (I’m having horrible flashbacks of math class at this point)

Simplified: $7.5 million + $8.75 million + $12.5 million + $10.4 million = $39.15 million

Granted, this value is only true if the payroll at the end of the regular season is identical to the one used above (the NBA only uses the payroll on the final day of the regular season for luxury tax calculations).

The extremely high luxury tax value is why the Warriors’ front office is looking for a way to dump David Lee’s contract. Lee and the Warriors have both agreed to part ways – Lee is looking for a more consistent role with a team, while the Warriors want to cut their luxury tax payments. By cutting Lee (and assuming they take on $0 in salaries in return), the Warriors can save up to $50.6 million ($15.5 million in Lee’s salary, and $4.05 million in luxury tax since their new payroll drops them to the first tier).

Q: What are the Warriors looking for in a David Lee trade?

It honestly depends on how you view the situation.

If you believe the Warriors’ front office will be trying to cut as much of his salary as possible, they could be looking to acquire zero salary (or an unguaranteed contract that they can waive before the end of the season) in return. Of course, this is close to impossible, unless the Warriors are willing to give up a ton of assets to a team with cap space.

On a more realistic front, the Warriors will have to receive some salary in return. If they can keep the salary to below $2.2 million, they will still remain in the first tier. Anything in between $2.2 million and $7.2 million, and they’ll be paying $1.75 for every dollar they are over the $5 million luxury tax line (plus the $7.5 million incremental maximum), and so on and so forth.

The best case scenario is that the Warriors receive an unguaranteed salary that can be waived before the end of the season.

Note: it is highly unlikely for the Warriors to remain in the first tier of luxury tax calculations as they will definitely be acquiring more salary with re-signing Leandro Barbosa and Justin Holiday (or signing their replacements).

Q: How much money do the Warriors have to spend on free agents this offseason?

The Warriors used their Non-Taxpayer Mid-Level Exception to sign Shaun Livingston to a three year, $16 million deal last offseason. They were able to do so because they were above the salary cap line, but were not above the luxury cap line when they signed Livingston to the deal.

This season, barring any big salary dump, the Warriors will be paying the luxury tax (yes, even if they manage to get rid of Lee’s contract without receiving anything in return). As a result, they can only use their Taxpayer Mid-Level Exception to sign free agents. As per RealGM, that figure is set to max out at $3.376 million for the 2015-16 season, with 4.5 percent raises up to three years.

Ie, the Warriors can only spend up to $3.376 million on free agents this season.

Q: What moves have the Warriors made so far?

The Warriors re-signed Draymond Green to an extension, and chose not to extend a qualifying offer to Justin Holiday, making him an unrestricted free agent. Ognjen Kuzmic received a qualifying offer of $0.82 million, making him a restricted free agent.

Brandon Rush and exercised his player options and opted in to another year with the Warriors. The Warriors also exercised their team option on Mareesse Speights, extending his contract by a year. Rush’s option was worth $1.27 million and Speight’s was worth $3.8 million.

The likeliest reason why the Warriors chose not to extend a qualifying offer to Holiday is because they didn’t want to have his cap hold count on their payroll. While his $0.82 million cap hold may seem insignificant, every penny pinched will help with the Warriors and their attempt to drop under the luxury tax line to qualify for the $5.46 million non-taxpayer mid-level exception (which is nearly impossible).

Judging from their actions, the Warriors probably confidently believe that they can re-sign Holiday.

Q: You made a mistake! Where can I direct my anger?

I did my due diligence with the facts and figures (and tried to find sources where applicable), but I am aware that I may have made mistakes along the way. If you have found one, please leave a comment or tweet me @gregchinfh and I will address the issue.

I apologize in advance for any mistakes I may have made – there’s a reason why I’m not a cap guru working for ESPN or an NBA team 🙁

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