The Washington Wizards' salary-cap situation is tricky

Chip Somodevilla

Here's an overview of the Washington Wizards' salary-cap situation this summer. How can they improve? What limitations will they have?

This post has been updated to reflect the Wizards' two picks in the 2013 NBA Draft.

The Washington Wizards enter an interesting summer where further upgrades are likely needed to rise to the next level, but the means to make them are not quite so clear. They are right at the salary-cap level and are faced with a unique decision on Martell Webster that threatens to further inhibit their flexibility. A quiet offseason would not surprise me in any way.

But before we get on to discussing this summer, it's important to be on the same page with what the Wizards can do. Here's a rundown of the team's salary-cap space, exceptions available, free agents and the like.

2013-14 TEAM SALARY COMMITTED

(Numbers taken from publicly-available websites such as HoopsHype and others. Some salaries may be underreported. Rounded to the nearest hundred thousandth).

  1. Emeka Okafor: $14.5 million.
  2. Nene: $13 million.
  3. Trevor Ariza: $7.7 million.
  4. John Wall: $7.5 million.
  5. Bradley Beal: $4.3 million.
  6. Otto Porter: $3.6 million.*
  7. Jan Vesely: $3.5 million.
  8. Kevin Seraphin: $2.8 million.
  9. Trevor Booker: $2.4 million.
  10. Chris Singleton: $1.7 million.
  11. Glen Rice Jr: $850,000**
  12. TOTAL: $61.85 million for 11 players. (Four open roster spots)
Next year's figures will not officially come in until midnight on July 1, but the latest projections have the salary cap at $58.5 million and the luxury tax only slightly higher than last year's $70.307 million. As a reminder: teams can exceed the salary cap using only a few different exceptions, which we'll detail below. The Wizards can only add free-agent talent using these exceptions.

Once the total team salary goes over the luxury tax, they must pay additional money at the following rate:
  • $5 million or less: $1.50 for every dollar over.
  • Between $5 and $10 million: $1.75 for every dollar.
  • Between $10 and $15 million: $2.50 for every dollar.
  • Between $15 and $20 million: $3.25 for every dollar.
If a team has been over the luxury tax in four of the previous five seasons, they are subject to the "repeater" penalty and must pay an additional dollar on top of the fees listed above. The Wizards are not in danger of this.

*: The projected salary for the third pick according to the rookie scale, via HoopsWorld.
**: The salary of Draymond Green, last year's No. 35 pick. Rice Jr's may be a little higher or lower depending on the negotiation.


WHAT EXCEPTIONS CAN THE WIZARDS USE?

Here's a quick list of the salary-cap exceptions at the Wizards' disposal. A note: the specific dollar figures will likely be slightly higher depending on where the final cap number comes in.

Mid-level exception: The Wizards can sign any free agent to a contract starting at $5.15 million, with 4.5 percent raises. They may also split this up on multiple players using the same percentage raises. Such contracts can be no longer than four years. (Previous Wizards MLE signings: Antonio Daniels, Darius Songaila).

Bi-annual exception: This is available to teams every other year, and the Wizards did not use it last season, so they can use it this year. This allows them to sign any free agent to a contract starting at $2.06 million, with 4.5 percent raises. They may also split this up on multiple players using the same percentage raises. Such contracts can be no longer than two years. (Previous Wizards BAE signings: Fabricio Oberto).

Room exception: If the Wizards offload players without taking salary back and end up under the cap, they lose the previous two exceptions because you can't have both cap room and them. However, they'd gain the "room exception," which allows them to sign a free agent to a contract starting at $2.65 million, with 4.5 percent raises. This can be split up on multiple players, and such contracts can be no longer than two years. It's unlikely the Wizards will be in this position, though.

Minimum exception: The Wizards can sign any number of players to the minimum salary exception. Salaries can be no longer than two years in length, and the second year is always whatever the minimum salary figure is for that season. Specific salaries depend on years of service in the league. (Previous veteran's minimum signings: A.J. Price).

Trade exceptions: The Wizards have one small trade exception that can be used to acquire a single player without matching salary, so long as the player makes less than the trade exception. These can be used within one calendar year of gaining them. It is a $1.3 million one from February's Jordan Crawford deal. It is unlikely that the team will use these because they are so small, but it has happened elsewhere around the league. Reggie Evans was acquired by the Nets using part of a $3 million trade exception last summer.

The Wizards also had a $1.8 million exception from last year's Hornets deal that recently expired without being used.

Sign and trade: The Wizards can arrange to sign a player and immediately trade pieces for his new salary in order to get around some of these rules, but this requires the other team to accept such an arrangement. It also must be a trade where salaries are matched like any other trade. This is not like the situation with the New Orleans Hornets last year where they had some leftover cap room and could only send back Gustavo Ayon in a deal for Ryan Anderson.

The Wizards possess a number of young players, three draft picks and expiring contracts for Emeka Okafor and Trevor Ariza, so they have some assets, but we tend to overrate the impact of these kinds of things. Jan Vesely and Trevor Booker in particular at their salaries are arguably closer to liabilities than assets.

WHO ARE THE WIZARDS' FREE AGENTS?

Martell Webster: We'll talk about his unique situation in a second.

Garrett Temple: Temple started a lot of games and emerged as a decent rotation piece later in the season. His qualifying offer is just over $1.1 million. The Wizards have Non-Bird Rights on him and he made a pro-rated $573,000 last year, meaning the maximum salary they can use to keep him without dipping into one of their exceptions must start at no more than 120 percent of his current salary. The veteran's minimum seems most likely for him if the Wizards want to keep him around, though the Wizards could use the bi-annual exception if a bidding war ensues. The drafting of Rice Jr., though, does make Temple more expendable.

A.J. Price: Price did a decent job as a backup point guard considering his salary, but showed he was no better than a second-line player when Wall was out. A lot of the same concepts with Temple also apply to him. If the Wizards want to keep both, they'll probably have to hope one accepts the veteran's minimum.

Leandro Barbosa and Jason Collins: Pretty much the same deal as Temple and Price. I'd be very surprised if either were here next year.

Cartier Martin: Martin's situation is unique, but to the best of my knowledge, the Wizards have full Bird Rights on him. Bird Rights come after a player signs a three-year contract or at least three one-year contracts. Said player can be waived during the one-year deals, and if he doesn't sign with another team, the clock is not restarted.

Martin signed a one-year deal at the end of the 2009-10 season. He then signed a one-year deal that summer and played a full season with the club in 2010-11. He then went over to China for most of 2011-12 before signing with the Wizards at the end of the year. Last summer, he signed a fourth one-year deal and played a full season with the club this year. To my knowledge, that means he has full Larry Bird rights, and the team can go over the cap to keep him without using any of the above exceptions.

Of course, there's little reason to keep Martin with Rice Jr. now here.

THE MARTELL WEBSTER DILEMMA

Ernie Grunfeld signed Webster to a one-year contract worth $1.75 million (it's been under-reported as $1.6 million elsewhere) last September as a flyer. It worked out so well that Grunfeld has created a tricky situation for himself if he wants to keep Webster.

Because Webster signed a one-year contract, he is a Non-Bird Free Agent. As noted above, a team can only sign a Non-Bird Free Agent to a first-year salary starting at 120 percent of the final year of his old contract. That would give Webster a first-year salary of $2.1 million.

It would be awesome for the Wizards if Webster went for that, but I wouldn't count on it. Almost every similar player that signed new deals over the past few offseasons made more than $2.1 million in the first year of their contract. (Some specific examples: Courtney Lee, C.J. Miles, Brandon Rush, Carlos Delfino, Gerald Green, Steve Novak, Shannon Brown, Danny Green, Randy Foye, Landry Fields). Webster shouldn't sell himself short, and I doubt he will.

That means the Wizards will likely have to use a good portion of the mid-level exception to keep Webster. It's possible they'll need to use the whole thing, or it's possible they will need to use half of it, but that's really the only other mechanism they can use to keep him. (If the Wizards drop below the salary cap by offloading other pieces, they can avoid this problem, but as noted above, they must trade the standard mid-level for the room exception). If a team with cap room really loves Webster, they could offer him more than the mid-level, leaving the Wizards unable to match.

That's why a decision on Webster is trickier than it looks. Re-signing him could potentially mean losing out on other free agents. While the Wizards certainly need his perimeter shooting, they could also look for a cheaper option that would allow them to also sign an additional player. Or, they could decide another need is greater, particularly after selecting Porter and Rice Jr.

(To put this into real life: would you rather have Webster at $5 million and hope someone better than Price will play for the bi-annual exception, or would you rather just sign Chris Copeland to be a Stretch 4 and C.J. Watson to be a backup point guard, splitting the total Webster would have received? Would you rather have Webster at $5 million or Devin Harris at $5 million? These are just examples of players and they may price themselves out of the Wizards' range, but I use them as a thought exercise).

I think the Wizards will choose to keep Webster anyway, and I generally support it, but I don't think it's a slam dunk for the reasons described above.

ONE LAST FACTOR

The Wizards do still need to pay Andray Blatche the difference between what his contract the Wizards amnestied last summer is ($7.8 million this year, $8.5 next year) and his new contract. While this cost does not count on the salary cap, it does come out of Ted Leonsis' pocket. It remains to be seen how close Leonsis goes to the luxury-tax line considering this additional expense.

****

Hopefully, this guide helps inform us as we enter free agency.

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

Join Bullets Forever

You must be a member of Bullets Forever to participate.

We have our own Community Guidelines at Bullets Forever. You should read them.

Join Bullets Forever

You must be a member of Bullets Forever to participate.

We have our own Community Guidelines at Bullets Forever. You should read them.

Spinner

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.

tracking_pixel_9347_tracker