Not long before the NBA season was suspended, there was a report about the Spurs and one of their players that made headlines: DeMar DeRozan intends to opt out of the last year of his contract to test free agency if he doesn’t agree to an extension with the Spurs.
The report is not earth-shattering, since even if it’s correct it only takes away the possibility of DeRozan playing out his current contract but doesn’t rule out the possibility of him staying in San Antonio on a new one. The Spurs could still retain their top scorer.
For now, however, let’s take a look at what DeRozan actually walking from San Antonio in free agency would entail, because the Spurs would face some interesting challenges.
The Spurs likely won’t have the money to replace DeRozan
Many fans probably think that if DeRozan opts out and leaves, the Spurs would be getting the cap space to replace him by purging their books of his almost $28 million contract. Unfortunately, it’s not that easy.
The Spurs are currently over the cap by almost $15 million. They got there by re-signing Rudy Gay and using part of their mid-level exception. They will also carry into next offseason the cap holds for their free agents Jakob Poeltl, Marco Belinelli and Bryn Forbes, totaling over $24 million, plus what will likely be the fully guaranteed salary of Trey Lyles. That means that getting only DeRozan’s deal off the books barely gets the Spurs under the cap. Even if the Spurs immediately renounce Belinelli’s cap hold and waive Chimezie Metu, they would still only have around $7 million in cap space, which is less that they’d have to spend by acting as an over-the-cap team using the mid-level exception and the bi-annual exception.
In other words, losing DeRozan for nothing simply doesn’t put the Spurs in a good position to get a replacement or an upgrade elsewhere, salary cap-wise. They would need to make some tough decisions to get there.
Getting significant cap space would involve some sacrifices
The easiest way for the Spurs to carve out significant cap space without involving other teams would be to not only part ways with Belinelli and Metu, but also renounce Poeltl and Forbes and waive Lyles. In that situation, the over $11 million cap hold that Poeltl has would disappear, along with Forbes’ $5.4 million cap hold and $4.5 million in guaranteed salary for Lyles. That scenario, however, has clear downsides.
Losing Poeltl and potentially Lyles would leave the Spurs extremely thin up front with a significant amount of money to spend but no obvious targets. The list of quality veterans who will enter the market (Anthony Davis is not going anywhere) and command a big salary next offseason is short and unimpressive. DeRozan might be the best of the bunch, while front court targets don’t get much better than Montrezl Harrell and Danilo Gallinari. The group of restricted players is more interesting, as it includes players like Brandon Ingram and Bogdan Bogdanovic, but it might be hard to pry them away from their incumbent teams.
Losing Poeltl and two other rotation pieces for the opportunity to spend on someone else is risky. Unfortunately, it seems like the best option for the Spurs if the idea is to actually make a meaningful addition without trading any significant pieces.
Guaranteeing LaMarcus Aldridge’s contract might have been a mistake
There was a way for the Spurs to give themselves the chance to have significant cap space without renouncing the rights to Poeltl. Had they simply not guaranteed LaMarcus Aldridge’s contract for next season months before they had to, they could have gone into the offseason with the possibility of keeping him if DeRozan decided to return or simply waive him and only be on the hook for $7 million of his contract instead of $24 million if they decoded to go full rebuild.
The franchise decided against maintaining that flexibility, and they surely had their reasons. Guaranteeing Aldridge’s contract certainly eliminated a potential distraction, as not only the star big man got his money but also became harder to trade at the deadline. The weak free agency class maybe played a part too, as the front office might have not been interested in any potentially available pieces, making the need for cap space unnecessary.
(It’s worth noting that as of now, Dejounte Murray is the only player on the books after the 2020-21 season, so depending on what moves they make this summer, the Spurs should have much more cap space to work with next summer, which could have been one of their reasons for guaranteeing Aldridge’s contract. Not to mention, if DeRozan walks and they decide to rebuild, they can still trade Aldridge, who’ll be in the last year of his contract, making him a low-risk/high-reward target for contenders.)
Guaranteeing Aldridge’s contract wasn’t the worst thing in the world — the Spurs are a better team with him than without, and odds are slim they get a better player this summer — but their margin of error in free agency is much smaller now because of it. If an interesting young piece that could help accelerate the rebuilding effort becomes available in free agency, they might not have the ability to pursue him without hoping other teams are willing to get involved simply because they rushed to that commitment.
This offseason will be an important one for the Spurs, as they might lose the major piece they got in the Kawhi Leonard trade to free agency. It’s probably not a bad thing to let DeRozan walk instead of fully committing to him, but it would put San Antonio in a tough position partially of their own making.
How they navigate a potential DeRozan departure could tell us a lot about how we can expect them to handle the challenges ahead.