The uncertainty about the future of the league is over. The players’ association and the league have agreed to start the NBA season on Dec. 22 and play 72 games.
The salary cap and luxury tax line will be set at $109 million and the tax line at $132 million, which is the same level as they were last season. Teams paying luxury tax could pay less if the league’s revenue decreases beyond expectations, while players could see the amount of their salary that goes into escrow rise in the next few years. There will be a shortened free agency period that will start on Nov. 20 before training camp opens on Dec. 1
It’s a good thing that both players and governors are making sacrifices to salvage the next season in hopes to return to normalcy as soon as possible, but even with this agreement in place the league will be different in the short term. Let’s see how it all affects the Spurs.
DeMar DeRozan will probably opt in
It’s been safe for a while to assume DeRozan would opt in on the last year of his contract, considering the circumstances, but now it seems certain. The salary cap will remain flat, which means there won’t be many teams that can offer him star money this offseason, so it makes sense for DeRozan to stay on a contract that will still compensate him handsomely in a season of tremendous uncertainty and to potentially seek a new deal next offseason, when the cap is assured to rise by at least three percent, and maybe more.
Whether DeRozan finishes the season with the Spurs is up in the air, as a potential trade should be on the table and could be beneficial for both parties, but he’s likely to be around when it starts, since the window to trade move him before then is extremely small. Which means that...
The Spurs might struggle to stay under the luxury tax while keeping Jakob Poeltl
We now know that the cap is not rising and that, barring something completely unforeseen, DeMar DeRozan will stick around. Under those circumstances the Spurs will be an above the cap team going into the short free agency period that will begin on Nov. 20, as they will have over $110 million in guaranteed salary along with several cap holds. A bigger problem than the cap, however, is the $132 million tax line.
If the Spurs decide to keep their draft pick and to guarantee Trey Lyles’ contract, they will have around $118 million in committed salary for 11 players and would have only $14 million with which to re-sign Jakob Poeltl and round out the roster. The margin is thin. It’s possible that Poeltl simply takes his qualifying offer to play out this season with the Spurs and become an unrestricted free agency in 2021, but it’s not likely. Even assuming the market for Poeltl is deflated as teams try to conserve cap space, he’ll at least make mid-level exception money, which is about $9 million. Any other addition would likely put the team in tax territory.
The Spurs could simply pay the tax and hope the league’s revenue decreases to be on the hook for only a fraction of it, but venturing that far over the cap for a team that might not make the playoffs doesn’t seem like a good idea.
The front office will have to get creative to make improvements without crossing the tax line, but it’s not all bad news.
Continuity could work in the Spurs’ favor early on
As mentioned, the Spurs will likely have as many as 11 players returning if not more, along with the same coaching staff. Continuity like that could allow them to thrive early on, while teams with more turnover both in their rosters or sidelines try to figure themselves out on the fly after a shortened offseason.
According to research by ESPN’s Kevin Pelton, teams with continuity on their side did better over the first 10 games of the season after the 2011 lockout. That edge eventually faded away when other squads find their stride, but in a 72-game season those first 10 games could be very meaningful. The Spurs might not make a big enough push early to really put themselves on the playoff race unless the young players take a big leap forward, but at worst a good record at the beginning of the season should increase the perceived value of the veterans. If some contenders start slow, they might be looking to make moves, and San Antonio could have some appealing targets after a strong start.
The news about the league’s new reality has some silver linings for the Spurs regarding the upcoming season. But it could really help them in the one after as well.
The Spurs’ 2021 cap space has become even more valuable
The salary cap will reportedly increase by at least three percent in the next two years but not by more than 10 percent. It’s a move designed to guarantee a level of certainty to both teams and players, because going by traditional calculations and mechanism, the cap would have likely dropped in the near future otherwise. But that modest uptick in the cap is a far cry from the estimates made before the pandemic, which forecast massive spikes.
What it means for the Spurs is that unless they add a lot of long term salary this year, which is unlikely beyond an extension to Derrick White and signing Poeltl to a new contract, they will have abundant cap space at a time in which not many teams will. San Antonio could easily have around $60 million to spare, if not more, next offseason while having a cheap, young core in place. The obvious use for that money would be to get a star in free agency, but if that doesn’t seem to be in the cards the Spurs could just ask for assets to rent out that room for teams desperate to clear their books. That type of financial flexibility could be a massive advantage now that the cap is expected to increase marginally, and the Spurs will surely look to exploit it.
We’ll have to see how the rest of the league reacts to this new reality. The fixes in place are definitely not ideal, but they should at least restore some level of predictability to free agency market, if nothing more.
Luckily for the Spurs, they will find themselves in a good position going forward, as long as they don’t make any mistakes this offseason. It might not be a good time for the NBA as a whole, but San Antonio seems to have the flexibility to navigate this treacherous stretch better than most.