How the Raptors’ cap situation could impact their deadline strategy

Toronto Raptors president Masai Ujiri. (Mark Blinch/CP)

The NBA’s trade deadline is next week – Feb. 6 at 3:00 p.m. ET, to be exact.

As usual rumours have been flying about potential buyers and sellers at the deadline, including those surrounding the Toronto Raptors.

It’s still unclear what the Raptors might be looking to do at the deadline – if anything at all, that is. But an important step in trying to forecast what they might do is understanding what their options are.

The best way to do that is to take measure of the team’s current and future salary-cap situations and how their finances might impact any decisions team president Masai Ujiri and GM Bobby Webster might want to make.

So let’s take a closer look.

Note: All salary-cap figures are via Basketball Insiders, while collective bargaining agreement details are sourced from Larry Coon’s CBA FAQ.

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Current cap outlook

Here’s a summary of the Raptors’ current cap outlook:

Player Cap Figure
Kyle Lowry $34,996,296
Marc Gasol $25,595,700
Serge Ibaka $23,271,604
Norman Powell $10,116,576
Fred VanVleet $9,346,153
Patrick McCaw $4,000,000
Stanley Johnson $3,623,000
Rondae Hollis-Jefferson $2,500,000
Pascal Siakam $2,351,839
OG Anunoby $2,281,800
Chris Boucher $1,588,231
Malcolm Miller $1,588,231
Justin Hamilton $1,000,000 (dead cap)
Matt Thomas $898,310
Terence Davis $898,310
Dewan Hernandez $898,310
Cameron Payne $150,000 (dead cap)
Isaiah Taylor $50,000 (dead cap)
  Total: $125,154,360

The key takeaway from this is the $125.15-million total figure, a number that still puts them about $16 million over the $109.14-million salary cap, but well below the $132.63-million luxury-tax threshold.

This means that while the Raptors are functioning above the salary cap, they aren’t a tax-paying team for the time being, which gives them flexibility to work with in a trade (more on this later).

What isn’t displayed above, however, is the Raptors’ situation beyond this season, another important factor to take into account at the deadline.

Toronto could have as many as seven free agents in the off-season, with possibly more roster space opened up as the contracts of Terence Davis, Dewan Hernandez and Matt Thomas are non-guaranteed for 2020–21. That’s a lot of money coming off the books as Raptors all-star Pascal Siakam’s max extension sets to kick in. [sidebar]

Looking even further out, the Raptors have four potential free agents in the summer of 2021, and then, virtually, a cleared deck after the 2021-22 season outside of Siakam.

This speaks to what appears to be a conscious decision by the Raptors to remain as flexible as possible, even while remaining competitive. It seems like, at any time, the Raptors could pull the plug or try to go all in again to chase another championship.

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Salary matching as a non-taxpaying team

Before diving into specifics about the Raptors and how any moves might affect their future outlook, it’s important to first know how they might be able to make deals and what restrictions they have on them.

As a taxpaying team last season, it was clearer just what the Raptors could do because, according to the CBA, taxpaying teams can only acquire a player (or players) with an incoming amount equivalent to 125 per cent of whatever the outgoing salary is plus and additional $100,000.

For non-taxpaying teams, as the Raptors are this season, there’s a lot more flexibility at hand, but also a lot more complication, as well.

The amount of salary the Raptors (and any other current non-taxpaying teams) can acquire is broken up into three tiers depending on how much salary is being sent out. It breaks down to, per CBA FAQ, the following:

Outgoing Salary Maximum Incoming Salary
$0-$6,533,333 175 per cent of the outgoing salary, plus $100,000
$6,533,3334-$19.6 million The outgoing salary, plus $5 million
$19.6 million and up 125% of the outgoing salary, plus $100,000

To break this down in practical terms for the Raptors, let’s create three tiers and look at where individual players fall:

• Tier 1: OG Anunoby, Chris Boucher, Terence Davis, Dewan Hernandez, Rondae Hollis-Jefferson, Stanley Johnson, Patrick McCaw, Malcolm Miller, Pascal Siakam, Matt Thomas

• Tier 2: Norman Powell, Fred VanVleet

• Tier 3: Marc Gasol, Serge Ibaka, Kyle Lowry

Of course, the tier of the transaction would change if the Raptors were to package multiple players together, but this is a basic outline of what they have to work with.

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The VanVleet situation

OK, now that we’ve got the nuts and bolts out of the way, we’ll now turn our attention to something grounded in reality and likely on the mind of many Raptors fans: the Fred VanVleet situation.

More specifically, how this trade deadline impacts the forthcoming free-agent decision Toronto will have to make in the summer.

Unlike veteran big men Marc Gasol and Serge Ibaka, who are 35 and 30 years old, respectively, the Raptors won’t need to debate how much VanVleet has left in the tank. He turning just 26 in February and looks like a key piece of Toronto’s future not only as a budding star, but also as the heir apparent to Kyle Lowry, whose deal expires in the summer of 2021.

It’s unknown how much, exactly, VanVleet could earn on his next contract, but based on comparables he’s probably worth $22 million a season, at least.

If we take that number as a hypothetical and combine it with the $28.75 million that Siakam will make next season – with his extension kicking in – we’ve suddenly got nearly $51 million tied up in just two players.

Granted, both Siakam and VanVleet are viewed as franchise cornerstones, so a long-term deal for the latter at whatever price will likely be money well spent. But with that much money potentially already being put away for the off-season to get a deal done for VanVleet, it would seem to limit what the Raptors can do at the trade deadline — especially if they want to maintain that flexibility we mentioned earlier.

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Eye towards the summer of 2021

Summer 2021 is going to be a big one in the NBA with many star-calibre players expected to hit free agency. The names on the list as it stands now include Bradley Beal, Rudy Gobert, Victor Oladipo, Paul George, LeBron James, Kawhi Leonard and, of course, Giannis Antetokounmpo.

The Raptors, like many other teams in the league, have financially positioned themselves to be big players in free agency at this time. If all goes the way things are set up for the Raptors, the only current key rotation players under long-term contract heading into the summer of 2021 will be Siakam and VanVleet with the additional possibility of Chris Boucher, who will likely seek an extension before the start of next season.

But if they maintain the possibility of a run at any of those big-time free agents mentioned above, they really can’t afford to acquire a player with term that goes beyond the end of next season.

Of course, if the Raptors were to swing a deal for a legitimate star locked under contract for a long period of time, that would be fine. But players like that are probably on their rookie-scale deals right now and likely untouchable anyway.


What do the Raptors have to offer in a trade?

Lastly, here’s a primer on some of the assets the Raptors have at their disposal to make a trade.

Players: Pretty self-explanatory, with some players being worth more in a trade than others because of how much money they make, their ability, etc. Also, be mindful that players on two-way contracts — Oshae Brissett and Paul Watson Jr., in the Raptors’ case — can be traded, but don’t count for salary-matching purposes.

Draft picks: The Raptors have all of their first-round draft picks at their disposal to use in a trade. It’s important to remember, however, that because of something called the “Ted Stepien Rule,” Toronto can’t trade consecutive first-rounders. So, if the Raptors were to deal their 2020 first-round pick and another, the second one would have to be from 2022 or beyond.

In terms of second-rounders available, the Raptors have their 2020 one free to use, but have already dealt their 2021, 2022 and 2024 second-round selections.

Cash: Though not as highly publicized an asset, straight cash is a tool at the Raptors’ disposal as well. Each team has something called a Maximum Annual Cash Limit, which is an allocation of money determined by the salary cap that a team can use throughout the year before it resets.

This season, the number is $5.62 million, and the Raptors have yet to use any of it.

Traded Player Exceptions: A Traded Player Exception, or just “trade exception,” comes about as a result of salary imbalances in trades. For example, a team trading away a $4 million player for a $2 million player would gain a $2 million trade exception.

That trade exception can be thought of as a credit on the team’s budget that allows them to complete trades over the salary cap that they would otherwise not be able to make due to salaries not matching up.

Toronto has three trade exceptions this season: One created from the Malachi Richardson trade with the 76ers is worth $1.56 million; another from Greg Monroe is worth $1.51 million; and another from Delon Wright at about $2.54 million.

The Monroe and Wright exceptions will expire on Feb. 7, while the Richardson one expires on deadline day itself.

These trade exceptions aren’t terribly valuable because of the small dollar figures. Remember, trade exceptions can’t be combined to create one bigger, more valuable asset to facilitate one single trade. They must be used in separate transactions.

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