Home News The Celtics luxury tax problem: Projecting the future payroll

The Celtics luxury tax problem: Projecting the future payroll

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Now that we’ve gotten a clearer picture of the repeater tax, let’s project how the Celtics’ cap sheet will look in the next few years so we can better understand some of the decisions the ownership will take. Remember, these numbers are not set in stone and can drastically change based on a lot of factors. In order to avoid a 10,000 word story of all these factors, we took the liberty of making some assumptions on the future.

What are the assumptions?

Cap Projections

In 2019-20 and 2020-21, the league’s own cap projections from earlier this year of $109M and $116M respectively were used. Personally, I (Sam) think these numbers are high, based on previous years of league growth, so I used $119M and $121M as the Salary caps for 2021-2022 and 2022-2023. These could be significantly higher, but given the big leaps projected in the next two years, I think there’s going to be more stabilization.

The legalization of gambling is a big wild card here, it will give the cap another boost once the NBA incorporates it into its economy, but it’s still unclear when and how much the league will benefit from it. With that being said, Brian Windhorst has already speculated that it’s unlikely we’ll see a 2016 cap spike from the infusion of gambling so for now at least, predicting a more stable cap feels like the safe bet.

Kyrie Irving will receive a max contract

Depending on who you ask, there seems to litany of people who think that Kyrie Irving is a threat to leave the Boston Celtics next year. I’m extremely skeptical of this, because Irving currently finds himself in a basketball situation where he is the defacto team alpha dog, has a relatively straightforward path to The Finals for the foreseeable future, and the Celtics can give Irving the most money and years of any team.

Perhaps, counter to nearly ever report that has detailed his injury, Irving’s knee will continue to be a problem and the Celtics won’t offer a maximum contract. Should he play similar to last year, however, Irving is a no-brainer max player even if you expect him to regress a bit in his early 30’s. Therefor, It’s reasonable expect the Celtics to offer it and for Kyrie to take it.

Both Jaylen Brown and Jayson Tatum will receive full rookie maximum extensions

I genuinely believe that right now if they were free agents, both Jaylen Brown and Jayson Tatum would receive maximum contacts. Even in a depressed, “buyer’s market” this of-fseason, Zach Lavine commanded $19.5M per year contract, just $6M per year off of a player maximum for his experience level. Both Brown and Tatum play on the wing, a more scarce position than LaVine’s guard spot, and given the young age and superior production thus far of both players, I think it would be a slam dunk that a team would offer them a maximum contract.

Barring (heaven forbid and knocking on all wood available) an injury, or a massive regression that seems pretty unlikely, both players project comfortably to be maximum players in their fourth year, even if they don’t markedly improve between now and then. As the Celtics, getting them both on extensions, even if it is a slight overpay, would seem to be smart, as that extra year would be likely cheaper given the experience bucket (similar to how Kyrie Irving is currently wildly underpaid this year). I feel comfortable making this assumption.

The Designated Player rule and Designated Rookie Extension

Both Jaylen or Tatum could possibly qualify for a higher player maximum under the Designated Player extension rules should they hit certain performance goals. The most likely of these is if they were to make an All-NBA team in the last year of their deal. While this is possible, I wouldn’t describe it as ‘likely’ right now, so I left the player maximums at the standard 25% of the cap.

Joel Embiid got a conditional Designated Rookie max extension last year which would have posted the contracts value to $178 from $148 million if he won the Defensive Player of the Year, MVP, or was on one of the All-NBA teams. Embiid made the All-NBA second team this season.

The Kings and Memphis picks will convey next year at #4 and #11, The Celtics own pick will be #29, and the Clippers first round pick won’t convey.

This is probably the most spurious of the projections made, because it requires not only projecting a team record, but also needs to account for the fact that there is a draft lottery. The Celtics will lose the Kings pick if it is #1 and be saddled with the almost certainly much worse Sixers pick. Luckily, due to lottery reform, the chances of this happening when a team is one of the worst in the league (like I expect the Kings to be) is now significantly lower.

NBA

Recent projections have the Kings being as low as the second worst team in the league. However, lottery luck will ultimately determine where the pick lands regardless of regular season record. Given the strength of the Western conference, we ultimately projected the Kings with the worst record and the median outcome for having that worst record, which is the fourth pick. However, there’s still a 47% chance (with the new lottery odds) that the Kings would pick 5th even if they were the worst team in the NBA. Fourth is an optimistic projection, that accounts for a reasonable amount of salary for the pick.

The Projections

With all this in mind, here’s a look at the Celtics projections going forward. As detailed above, there are a ton of variables, however, any large move like a trade would effectively scuttle most of this. The point of these projections is more to demonstrate how large the numbers are and the level of “getting rid of guy x” it will take for the Celtics to even tread water financially.


Note: These numbers were run before the Abdel Nader Trade

In these projections, the Celtics don’t make any more moves this season and finish above the tax. Terry Rozier walks, as do Brad Wanamaker and Daniel Theis. Al Horford opts in after next year, but then walks the year after. I did the same with Gordon Hayward, given his injury, but there’s a good chance he actually opts out. Either way neither return after their contracts are up and the Celtics are still decidedly over the cap for the forseeable future.

You can see how thin the roster gets after a certain amount of time, and how valuable a player like Semi Ojeleye or Robert Williams developing into a rotation piece would be for the Celtics. Should they hold onto the Kings and Memphis picks, they would be heavily counted on. Wherever the minutes end up coming from, the Celtics will probably lose some of their high end talent and will need development of young stars or trades to fill that. Even then, there will be stiff bills for the Celtics, as none of these projections account for free agent signings using exceptions. In the end, the Celtics will need to make a decision on one or more of their top free agents.

Bringing back the vet(s)

To give an example of what that might look like, I’ve included an identical chart but one where Al opts out and re-signs on a 3-year $75 deal. Given the caliber of Al’s play and what other players have gotten, I actually think this would be low for Al, even given his age, but that’s just me.


Note: These numbers were compiled before the Abdel Nader Trade.

As you can see, this slightly cuts down the Celtics bill in 2019-2020 but gives them an over quarter billion dollar payroll in 2020-21. Even with Hayward opting in then walking (again, this is improbable if he’s healthy), the repeater comes home to roost in 2021-2022 and the Celtics still have a near quarter billion dollar roster, just without Gordon Hayward.

If the Celtics think there’s even a slight likelihood that they want Al Horford after next year, they have to be willing to offer him a contract that entices him. That likely means multiple years and in my opinion, Al is worth it.

A similar circumstance follows with Hayward even though he’s a little harder to predict. It’s possible that at 32, Hayward will still have a few good years left in his prime (like Horford did when he first came to Boston), but may opt to take a little less than the max if it comes with the stability of years. Like Horford, Hayward is worth it. He plays the most important position in the league and has no weakness in his game. Even if guys like Tatum and Brown surpass him he’ll still be one one of the complete players on the team.

In that instance, is paying the tax this year worth the possibility of the roster costing more than $25 million dollars in the future?

That’s not really a rhetorical question. It’s hard to answer and will vary from person to person depending on how much you like certain players, think the Celtics front office likes this squad, and how much of a risk taker you are. The Celtics’ front office is keenly aware of these looming troubles, and will be exploring all their options.

Source:celticsblog.com

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