Breaking down Raptors’ cap situation ahead of 2021 NBA Draft, free agency

Point guard Kyle Lowry. (Michael Dwyer/AP)

Similar to the way the last off-season played out in a truncated manner back in November, this year’s NBA off-season will also be flying by in rapid succession, with the NBA draft taking place Thursday and then the opening of free agency on Monday, Aug. 2 at 6:00 p.m. ET.

Because of the NBA off-season’s two tentpole events once again coming nearly back-to-back, the NBA’s rumour mill has been churning seemingly non-stop as teams, players and their agents attempt to convey messages to the parties they want to speak with while also sending out smokescreens in an effort to keep their rivals and enemies off their trails.

It’s glorious, beautiful chaos out there right now, and is a large reason why the NBA remains as popular a professional sports league as it is.

In the eye of this storm are the Toronto Raptors, who are armed with the No. 4 overall pick in the draft and have one of the marquee free agents this year in Kyle Lowry, to say nothing of the conundrum the team is in with president Masai Ujiri still not locked up for at least the next season.

Because this could prove to be such a transformational off-season for the Raptors, they have popped up a lot in day-to-day hotstove discussion, and they all align with one of the three main scenarios the team could go down: Running it back with this core as currently constructed (including Lowry) and adding the No. 4 pick as an additional piece, giving up on this core and looking to trade a player like Pascal Siakam while letting Lowry walk, or something in between those two extremes as the team tries to keep its competitive window slightly ajar while looking for an opportunity down the line to fully open it up.

This is a very important off-season for the Raptors. And so if you’re feeling a little nervous about what the team might do, that’s completely understandable because the number of ways it could go, branching off those three main paths outlined, looks infinite.

To better help you navigate the Nexus Event that is the Raptors’ off-season here’s a closer look at Toronto’s 2021-22 salary cap situation and how it pertains to key decisions that will need to be made heading into the draft and free agency for both the short- and long-term health of the club.

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

What will the NBA salary cap be this coming season?

Before diving into specifics, it’s important to know just what the cap and luxury tax threshold will be next season for the rest of the league as it will help us to better frame the Raptors’ outlook.

Salary cap: $112,000,000
Luxury tax: $136,600,000
Luxury tax apron: $138,409,950

Keep in mind that these figures are just projections. But after a season that saw the cap stay flat with the 2019-20 value, the expectation is that things will get back on track for the 2021-22 campaign, meaning the salary cap can, once again, increase.

The salary cap number is the most important one, but please also be mindful of the luxury tax and tax apron values, as they will also be important to keep in mind as we go along here.

The 2021-22 Raptors salary cap picture

Here’s a summary of the Raptors’ cap outlook for next season:

Looking at this graphic there are likely two things that jump out at you: Lowry isn’t on this list, and neither is Gary Trent Jr.

Don’t worry, this is by design as this is just a snapshot of the team’s salary situation for next season for players currently under contract. Lowry and Trent Jr. are free agents and we’ll address them separately in a section further below.

Another interesting aspect of the Raptors’ salary situation is the amount of non-guaranteed contracts they have.

Toronto has seven on the roster, with each featuring a deadline to make their deal for next season between Aug. 3-8, right in the thick of the free agency moratorium period, with the exception of Freddie Gillespie, whom the Raptors will have more time to make a decision on with a guarantee date of Aug. 20.

That most of these contracts won’t be guaranteed until after free agency begins seems to be quite purposeful for the Raptors, particularly when you consider the fact they pushed back Rodney Hood’s guarantee date from July 27 to Aug. 3.

This is an indication that Toronto is probably looking to use some of these non-guaranteed contracts in the trade market for salary-matching purposes, with Hood and Baynes’ deals looking like the best tools to try to go out and land a big fish.

Likely resources at the Raptors’ disposal

The Raptors won’t be able to use all of these, but here’s a general idea of what the Raptors can do to try to improve themselves.

The word “exception” will be tossed around a lot here and that’s because the only way a team can sign a player or make a trade that would leave it above the salary cap is to use one of the legal exceptions as outlined in the NBA’s CBA. It’s because of these exceptions that nearly every NBA team can -- and will -- operate above the league salary cap at all times, treating the luxury tax threshold as the real spending deterrent.

Non-tax-payer mid-level exception: There are different tiers of “mid-level exception” and this is the highest. Expected to be worth around $9.5 million in starting salary, this particular mid-level exception is also referred to as the “full mid-level exception” because in addition to being the most highly valued, it also allows teams to offer contracts in length of up to four years.

In order for a team to qualify for this exception, a team must be below the luxury-tax apron after making the deal. This rule holds true even if a team decides to split the mid-level exception between more than one player.

Given the amount of salary that could be shedding off their books, and with no guarantee of landing a high-price player in free agency, the full MLE could very well be something at the Raptors’ disposal.

Tax-payer mid-level exception: This functions almost exactly like its big brother, but comes with a much lower value (projected $5.8 million) and teams are only allowed to offer contracts up to three years in length.

Should Toronto manage to land expensive contracts in free agency, this is the more likely mid-level exception that it will have at its disposal as it’ll probably put the team above the apron. Like the non-tax-payer one, teams can split the value of it to sign multiple players.

When used, however, because a team will be over the apron, that club will be hard-capped to the apron’s value for the remainder of the season, meaning it can’t exceed the apron under any circumstance to make an additional move that year.

Traded Player Exceptions: Free agency isn’t the only way to improve a roster. There is, of course, still the avenue of the trade market. One way Toronto could help facilitate a potential deal would be through a “traded player exception.”

A traded player exception, or just trade exception, is a mechanism that can allow teams over the cap to complete trades as the money from a trade exception can be used to help match salaries and make a deal work.

In Toronto’s case, they hold two of them worth a total of $3.14 million. Unfortunately, you can’t just pool all of these individual trade exceptions into one transaction, you can use only one per trade.

Trade a player(s)/draft pick(s): Perhaps the simplest option for a Raptors team trying to get better would be to make a trade.

And, as mentioned before, with the No. 4 pick at their disposal, Lowry’s free agency situation (which would have to be a sign-and-trade) and all those non-guaranteed contracts on the roster, the Raptors look to have the ammunition needed to push a deal through if they see one that suits them.

Free agents

Here’s a quick glance at who the Raptors’ free agents are:

• Kyle Lowry (UFA)
• Khem Birch (UFA)
• Stanley Johnson (UFA)
• Gary Trent Jr. (RFA with qualifying offer of $4,736,102)

It’s not an extensive list, but because of the name at the top there, this might prove to be one of the most transformational free agency periods in Raptors franchise history.

Twice before over the span of his legendary run with the Raptors, Lowry has become and free agent and, in both instances, he opted to remain with the Raptors. But at 35 years old and with Toronto looking like a team in transition after it’s championship climax in 2019, this go-around seems different and there’s a very real possibility that he doesn’t return to Toronto next season.

Seeing Lowry walk away without getting anything in return would certainly hurt, which is why sign-and-trade scenarios for him are being discussed all over. But keep in mind that, should Lowry walk, the Raptors will have a fair bit of cap room to work with in free agency.

And some of that cap room can likely go to Trent Jr., who’s a restricted free agent and will certainly be in line for a raise to the tune of, according to Michael Scotto of HoopsHype, $18-20 million annually.

In 17 games played with the Raptors last season after coming over from the Portland Trail Blazers, via the trade deadline day transaction that saw Toronto ship out Norman Powell, Trent Jr. averaged 16.2 points per game, shot 35.5 per cent from three-point range and racked up a couple of signature moments. Notably, he hit a game-winner and even set a Raptors single-game record for plus/minus, finishing an incredible plus-54 in a record-setting 53-point victory over the Golden State Warriors last season.

Whether or not the Raptors believe Trent Jr. is worth that projected value will be interesting to see. Opposing teams can wave a big offer sheet in front of Trent Jr.’s face, but as a restricted free agent, the Raptors have final say on Trent Jr.’s foreseeable future.

The draft looks like the Raptors’ most important event

This year’s draft is expected to be loaded around the projected top five, and with the Raptors in possession of the No. 4 pick, seeing what they do with it on draft night Thursday could go a long way in predicting what they may be looking to do in free agency.

Should the Raptors take a guard like Jalen Suggs at No. 4, it would be a pretty good indicator that Lowry is moving on and Suggs will be able to step in as the heir apparent point guard of Toronto’s future.

On the other hand, if the pick is Evan Mobley, then Lowry’s future may yet still lie with the Raptors. Additionally, going after a player like Mobley (or even a Jalen Green) would likely mean the Raptors would have to trade up to get him, in which case, what are they giving up in addition to the No. 4 pick to do so?

Conversely, if it turns out the Raptors are taking a guy like Scottie Barnes or a Jonathan Kuminga, that probably means they’re trading down the board, but for who? Shai Gilgeous-Alexander’s name has popped up a lot recently and it would be a nice story to bring the Hamilton native home, so to speak, but, again, at what cost?

This is what we meant at the top about the many, many branching paths the Raptors can explore because of the value of that No. 4 pick.

What they do or don’t do with it will set the tone for their entire off-season, free agency included, and could very well set in motion the direction of the club for years to come.

An important off-season, but one that doesn’t have any obvious down sides

As foreboding as that last sentence above -- and the prospect of this entire off-season for the Raptors, in general -- may seem, it’s important to keep in mind that despite the overwhelming amount of options that appear to be in front of the team, very few of them are truly catastrophic.

The team’s core of Siakam, Fred VanVleet and OG Anunoby looks rock solid still, particularly if you were to add a star-level talent as this top-five of the draft projects to have.

And let’s say the Raptors were to trade down and go off the board a little, that would likely be in the name of acquiring an existing star, while still adding some young first-round talent in the draft.

This Raptors front office, led by Ujiri and Bobby Webster, heading into an important off-season like this -- full of much uncertainty and possibility -- has earned the faith of the fan base that they will, ultimately, make the right decision.

These are understandably nervous times with so much change that could be on the horizon, but the only reason why the decisions seem to be so difficult is because the vast majority of them all appear to be pretty good for the Raptors.

Things are going to be OK.

Probably different, but still OK.

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