Trevor Ariza seeking 4 years, $48 million, but Wizards unwilling to go that high

Michael Lee of the Washington Post provides important details on the Trevor Ariza situation in his latest story. The gist: Ariza is seeking a deal comparable to Andre Iguodala's four-year, $48 million deal from last summer, but the Wizards, while willing to give him a raise on his $7.7 million salary from last season, aren't going to go that high because they worry they can't fill out their team while staying under the luxury tax. In addition, Lee reports the Wizards aren't willing to give Ariza the fifth year that would be their trump card over all other suitors.

Later, NBA.com's David Aldridge reported that the Wizards aren't planning to budge off their $9 million/year line.

Meanwhile, Trevor Ariza seems to be everyone's backup plan. Wizards want to re-sign him but SF $ is exploding & WAS won't go past $9M/yr.

— David Aldridge (@daldridgetnt) July 10, 2014

Ariza has therefore explored the market, as we all know from following this saga. The latest team in the picture: the Houston Rockets, who just saw Chandler Parsons sign a big offer sheet in Dallas. Daryl Morey was on the phone with Ariza's agent today in case Parsons isn't matched, according to Yahoo! Sports' Adrian Wojnarowski.

No clear answer yet on Rockets matching sheet, but GM Morey had been on phone w/ agents for Ariza, Deng and Pierce today, sources tell Y.

— Adrian Wojnarowski (@WojYahooNBA) July 9, 2014

Houston weighing whether to match Parsons or go for Ariza at lower price. Wash, ATL, LAL, LAC, CHI also interested in Ariza

— Chris Broussard (@Chris_Broussard) July 10, 2014

The Wizards too have been exploring alternatives, with Luol Deng's name mentioned again. But signing Deng is unlikely because the Wizards won't have the cap space to give him a competitive offer, leaving a sign and trade as the only viable scenario. Remember: you can exceed the salary cap (now set officially at $63.065 million) to re-sign your own free agents, but not to sign someone else's. Washington would need to send Cleveland some salary to fit Deng in.

The whole situation puts the Wizards in a bit of a bind. This is the Wizards' current cap situation for next year, not including cap holds for their own free agents, Kevin Seraphin's $3.9 million qualifying offer or the $500,000 roster charges that are applied for every vacated spot under 13 players.

That number includes Wall's raised maximum contract (up to $14.7 million based on the new cap) and a rough estimate of Gortat's first year if his contract escalates over the five years (as is typical) rather than declines or stay flat (as is less typical).

That looks like it gives the Wizards a bit of cap space should Ariza leave, but that's also misleading for a couple reasons. For one, there is no way for the Wizards to use both cap space and the full non-taxpayer mid-level exception, which begins at $5.305 million with 4.5 percent raises each year for a maximum of four years. Once you release all holds and dip under the cap, you are considered under the cap for good. That means you are awarded the Room Mid-Level Exception, which is for just $2.732 million in Year 1 with a maximum of two years. Barring an unlikely sign and trade, you must choose between having cap space and the full non-taxpayer mid-level exception. You cannot have both.

(To anticipate a question: you cannot use that space to trade for a player on another team without matching salary and maintain the full non-taxpayer mid-level exception. That is not a remedy. To even make that trade, you must release all cap holds, and thus you are considered under the cap.)

The other reason: because the Wizards are charged $500,000 for each roster spot that's open under the minimum, the cap space that looks like it's there is much less than it appears. It's likely an immaterial amount regardless.

Therefore, the Wizards really don't gain any additional roster mechanisms to improve the roster this year by letting Ariza walk. They instead gain two things: future flexibility (which matters) and significant breathing room under the luxury tax, set at $76.829 million. That will not be exceeded under any circumstances, not by Ted Leonsis and not by most owners in this league. Whether Ariza walks or not, the Wizards will likely have the full non-taxpayer mid-level exception, two trade exceptions for $2.016 million and $1.254 million that can be used to acquire players on other teams that make that amount or less in trades without matching salary and the minimum to fill out their roster.

Why not just re-sign Ariza to what he wants, then? As Lee noted, the luxury tax could come into play if Ariza's contract is too big. If the Wizards were to pay Ariza $10 million in year 1 of his contract, they'd already be within $10 million of the tax line with at least four roster spots to fill. Using the full mid-level exception (on one or multiple players) and filling out the roster while staying under the luxury tax would be very difficult. Every dollar counts, which is why no deal has been signed.

These are the stakes for the Wizards as they negotiate with Ariza. It's complicated, which is why it's taking a while.