Also just wanted to throw this out there: Backup point guard TJ Ford ($8.5 million) and backup power Forward James Posey  ($7.1 million) …

… are allowing fewer than 91 points per 100 possessions in the 216 minutes the two have been on the floor together.

Well, it may not be priceless, but it might be worth a playoff spot.

First off, I think Dan must have erroneously included Jamaal Tinsley’s salary into his calculation that Indy, with $39.7 million tied up in non-starters, leads the league in bench spending. Obviously, Jamaal is no longer on the “bench,” and while his salary remains a burden on the team’s salary cap, he shouldn’t be included here. Practically, this doesn’t change much, however. Even once we remove the $5.4 million that ShamSports says Tinsley is making this year, the Pacers have $34.1 million tied up in its bench — still good for third-highest in the NBA after Detroit and Dallas.

This is too much for a team in Indiana’s financial position.

If you look at the squads who spend the most of their bench (click through … there’s a nice little chart), it isn’t necessarily a list of bad teams. We have the Mavs, Magic and Lakers all in the top ten, for example. But we have to remember that the NBA has a soft salary cap that allows those with deep pockets to continue to dump money into salary as long as they are prepared to pay the luxury tax.

Indiana is decidedly not a team with deep pockets.

So rather than just looking at total bench salary commitments, let’s look at bench salary commitments as a percentage of total team salary. Here’s that chart. (Again, Dan’s number is slightly off for the Pacers but not so much to change the main point I will get to.)

If you start from the right side, you will notice that a lot of very good teams have the lion’s share of their payrolls allocated for their starters. San Antonio, Utah, Boston, Denver, Los Angeles, Miami, Phoenix, Orlando and Atlanta are the top nine teams in terms of giving the bulk of their payroll to starters. Aside from Phoenix and perhaps Denver, we’re talking about seven of the best 10 teams in the league.

Another good team, Chicago (who is 14th in terms of spending payroll on starters), spends a little more on its bench, but the Bulls, like Dallas (who ranks 18th), don’t really care how much they spend given their market and current ambitions to compete with Boston, Orlando and Miami for the Eastern Conference title. The only other rather good team that proportionally spends a lot on its bench is Oklahoma City. But that has less to do with a reserve spending spree than the fact that Kevin Durant, Russell Westbrook and Jeff Green are all starters who are still on their cheap rookie contracts. The Thunder simply have found inexpensive, young players to start for them — and play incredible basketball. Must be nice.

Most of the other franchises that disproportionally dole out salary for guys not good enough to start simply aren’t that good. The roster becomes a collection of good-not-great players who all make middling salaries. The winning formula in the NBA generally requires that a team has a few very-high-salaried stars that start. Aside from the Pistons in 2004 (who weren’t exactly thrifty with their starters), we have teams like the Kobe/Shaq Lakers, Timmy/Manu/Tony Spurs, Big 3 Celtics and Kobe/Pau Lakers winning titles over the past decade.

Fortunately, the Pacers have a ton of expensive middling players coming off their books at the end of the year. Whether or not they chose to trade the expiring deals of some or any of Mike Dunleavy (who makes $10.6 million), TJ Ford ($8.5 million) or Jeff Foster ($6.7 million) remains the largest off-the-court issue of the season.

We shall see.

Regardless, the team’s ratio of starter salary to bench salary will likely look a lot better next year than it does this season. And that probably means they will be better.

Most recently projected to be about $56 million, the final tally is actually $58.044 million.

Indiana is already well above the cap, but this means the luxury tax threshold (the number that is essentially a hard ceiling for a cash-strapped team like the Pacers) is also higher — which, at $70.307 million, gives the Pacers a few more options this Summer to add talent.

It doesn’t allow them to be real players in the free agent market, but they now have at least $2.35 million to mess around with, according to ShamSports. Now, this number does include the rookie deal for Paul George, but does not account for the Pacers’ looking-more-and-more-like-a-steal, second-round pick Lance Stephenson or looking-like-he-could-make-the-team-maybe, second-round pick Magnum Rolle. Second-round pick contracts can be negotiated individually so it’s tough to tell exactly how much more those two, if signed, will account for, but we can expect them to each make well under $1 million. (For reference, Spurs 2009 #37 pick Dejuan Blair reportedly made $850,000 last year, Hornets 2009 #43 pick Marcus Thornton reportedly made $457,588 and Rockets 2009 #44 pick Chase Budinger reportedly made $725,000.) This number also does include some non-fully-guaranteed money for Josh McRoberts and AJ Price, however — although cutting both players tomorrow would only save Indiana about $1.1 million combined, so I wouldn’t expect Larry Bird to axe two fan favorites for such measly savings (unless AJ’s injury isn’t progressing at all by opening night).

If you do all that math (seriously, don’t bother) basically, what this all means is that the Pacers are free to use as much of the mid-level exception (worth $5.765 million) as they choose to sign new players. This is no different than before, but if they can pull off a trade or two in the next few weeks that has them shedding a few million dollars and inching further and further away from the dreaded luxury tax, they might now actually be able to use most of that figure instead of less than half of it.

If they make, I dunno, the completely hypothetical and terrible deal of, say, Troy Murphy and Jeff Foster for Elton Brand, the Pacers would free up another $2.3 million in cap room. Add this to the, say, $1.4 million left over after signing the rookies and the Pacers would have $4 million to try to entice Ray Felton, JJ Redick, Anthony Morrow or Nate Robinson. Trade TJ Ford for someone else who makes a little less than he does and Indy could even get up to around $5 million to play with. Obviously, it would also free them up to make any trade where they took back a little salary rather than just sign someone outright as well.

In short — and I’m completely burying the lede here — this higher-than-expected cap number gives the Pacers a little bit more flexibility to improve this Summer in free agency, if they start getting creative, but it doesn’t really do all that much.

Still, it’s a good thing.

As my pappy always used to say, having an additional few million dollars of salary cap flexibility is better than not having it.

Don’t get too excited — the Pacers are still highly hamstrung by the salary cap. But, still, putting some houses on Baltic is better than owning the Water Works.

The New York Knicks and other teams hoarding salary-cap space for this summer’s free-agent market received surprisingly good news Friday when they were told at the league’s board of governors meeting that the 2010-11 cap is projected to be $56.1 million.

That figure was $2 million to $3 million more than most teams had been expecting and $5.7 million more than the league forecast last July as a worst-case scenario.

This is somewhat exciting news for some teams, including the New York Knicks, and it will make for a more interesting summer for NBA fans in general.   Larry Coon gives his view of what it means to the much anticipated Free Agent Summer of 2010 over on ESPN.

For the Pacers, this news could be considered more relieving than exciting.  This new cap figure means that the Luxury Tax threshold will be at $68 million, instead of the the previously projected $65 million.  If you include the $5.5 million cap hit remaining for Jamaal Tinsley, Indiana has a cap figure for the 2010-2011 season of about $65.7 million before signing any of their draft picks.

Though the Pacers final draft position is yet to be determined, it is safe to assume that they will be picking 10th (87% chance).  The rookie salary scale for the #10 pick this year is about $1.9mm, but the player can be signed for anywhere between 80 and 120% of that number.  The overwhelmingly standard practice is to sign for 120%, so this will add about $2.2 million.

The Pacers have their own 2nd round draft pick, and it is possible that they will get Dallas’ 2nd round pick (from the Shawne Williams trade).  Dallas has until June 1st to decide whether to give us their pick from this year or next.  Since this year’s pick would be #57, I believe it’s safe to assume that they’ll go ahead and give us the pick.

If we assume that the Pacers sign their #10 pick, and both 2nd round picks at the league minimum of just under $0.5mm each ($0.9mm combined), that would put their total committed salary of $68.9 million, or about $0.9 million over the tax threshold.

Fortunately for the Pacers, the teams actual salary is based on their payroll as of the last day of the season, so they can go into the season over the threshold, and still avoid the tax.  The good news about the higher cap is that the Pacers should be able to use the 125% + 100k exception to reduce their payroll by the $1.0mm or so necessary.  That rule says that they could send out up to 125% + $100k more in salary in a trade than they take back.  They could also strike a deal with a team under the salary cap to trade a player and take no salary back.

Had the cap stayed at the lower projections, the Pacers would have been forced to make a deal similar to the Harping trade Utah made earlier that season.  In that trade, Utah was forced to package rookie guard Eric Maynor to get Oklahoma City to take on Harpring’s salary.  It did save Utah $10 million, but it cost them a promising young prospect.

At the higher cap/tax number, the Pacers are no longer facing sending out a future 1st or a Roy Hibbert to get someone to take one of our big expiring contracts to get under the tax.  They can either use the 125% exception, as noted above, or they could make a smaller deal.  For example, they could trade Solomon Jones and his $1.5mm contract, along with a future 2nd rounder to some team under the cap (the $56.1 million cap, not the $68.0 million tax) for cash considerations or the rights to some International Player who will likely never play in the NBA.

Of course, should the Pacers end up in the top three (a scant 4% chance), then that would increase their cap/tax issue by anywhere between $1.9 and $2.9 million.  Of course, that’s what we call one o’ them there “good” problems to have.

For more detail, please visit our Salary Central.

Like the Pacers, we at 8pts9secs wanted to avoid this luxury tax.  I would have put up a picture of a cap, but I didn’t want to piss anybody off.

This season’s NBA ticket revenues have not dropped as much as the league office projected over the summer. The league expected a 6% to 7% drop in ticket sales but there has been only a 1.7% drop to date.

Attendance is flat or ahead of last season’s pace in the majority of NBA arenas. The Nets and Pistons account for most of the small overall decline.

“The fact that we’re only down roughly 1.7% going into tonight’s games, I’m pleased about,” said NBA executive Chris Granger.

This doesn’t mean that the NBA is out of the woods yet, but if tickets keep selling ahead of the league’s preseason projected pace then next year’s salary cap, which was expected to drop significantly, will likely not fall to such a degree that the Pacers will forced to make salary dumping moves that they wouldn’t otherwise make.

The background here is that, given the ongoing economic downturn, the NBA expected its revenue to plummet across the league this year. Not only was attendance expected to dwindle, but this in addition to other sluggish returns had league execs projecting a significant drop in the all-important “basketball-related income” figure, which is what defines what the following year’s salary cap (and, thus, the luxury tax threshold) will be.

The 2009-10 salary cap had already gone backwards (from $58.7 million per team in 2008-09 to $57.7 per team this year), but that drop was not nearly as large as what the NBA was projecting for 2010-11. (See chart on right, courtesy of ESPN, for recent cap history.)

As ESPN’s Marc Stein put it:

The official league memorandum, obtained by ESPN.com, forecasts a dip in basketball-related income in the 2009-10 season of 2.5 percent to 5 percent, which threatens to take the 2010-11 cap down some $5 million to $8 million from last season’s $58.7 million salary cap.

A significant drop for the luxury-tax threshold is also projected going into the summer of 2010. If basketball-related income drops by 2.5 percent in 2009-10, league officials are projecting a 2010-11 salary cap of $53.6 million and a luxury-tax line of $65 million.

If BRI, as it is referred to in the NBA, decreases by 5 percent, teams would be looking at a $50.4 million salary cap and a luxury-tax line of $61.2 million in 2010-11.

“Teams should be aware of this projected BRI decrease,” reads the memo, “and plan accordingly.”

That “plan accordingly” aspect is what many small-market fans have been fearing. If the 2010-11 luxury tax was set at $61.2 million, the Pacers would already be over that line by around $4 million. Being over by that much would require owner Herb Simon to not only hand over $8 million to the league but would hit him with the proverbial “double-whammy,” as he would also be forfeiting the end-of-the-year payout that all the teams below the luxury tax receive — a check that equaled nearly $3 million last year.

So if next year’s luxury tax was set as low as the worst-case league projection of $61.2 million, Herb and Larry Bird would either (a) have to find a way to shave more than $4 million off of next year’s payroll (something easier said than done), or (b) bite the bullet and lose roughly $11 million (the $8 million in tax Herb would have to pay in tax plus an estimated $3 million he would not get back from the league.) For a guy who has been hemorrhaging untold tens of millions over the past decade on this team, asking him to lose another #11 million — on top of the $65 million for next year’s projected salary and whatever other enormous costs it takes to run an NBA team — would be asking quite a bit.

Fortunately, however, that mini-doomsday scenario looks a little less likely in lieu of recent news.

And that’s a good thing

A very, very good thing.

In related news, the Pacers are one of the teams whose attendance has dropped — so things aren’t all peaches and cream in Conseco. Last year, Indy averaged a lowly 14,182 fans per home game, which was worse than every other franchise except for Memphis (12,745) and Sacramento (12,571) . This year, reported attendance is down to 13,578 (which is, again, “worsted” by only Memphis and Sacto). The difference of 600 people per night isn’t going to make or break the team’s bank account, but any drop is obviously a negative and if the team gets worse — a definite possibility — than so might the attendance numbers.

So while today’s leaguewide ticket sale numbers are good — and the more important — news, let’s also be sure to keep an eye on the team’s ticket sales.

She’s still here at least. (Photo: Sam Riche)

It’s early, but league officials estimate the NBA salary cap will dip from $53 million to $50 million.

Yet another piece of bad news to the beleaguered franchises around the league, most notably, your Indiana Pacers. John Hollinger first noted this back in January, and Marc Stein echoed those sentiments in July.

The passage most germane to the Pacers is this:

If BRI [basketball related income], as it is referred to in the NBA, decreases by 5 percent, teams would be looking at a $50.4 million salary cap and a luxury-tax line of $61.2 million in 2010-11.

As I had noted in my column about dumping Droopy McTinsleberry, the Pacers were already perilously close to the luxury tax threshold when it was projected at $65 million. Now, despite all of their wrangling the last two years, they are back in cap hell.

According to Shamsports.com, the Pacers already have $60.2 million tied up in contracts for only 12 players next year. Two of those contracts are partially unguaranteed (McRoberts & Price), but they’re minimum level contracts and would have to be replaced by other mininimum level contracts. Adding to the Pacers’ misery is the fact that they have to pay Jamaal Tinsley another $5.5 million on top of that number.

So, all told, they’re basically committed to roughly $65.7 million in payroll next year at this point. Add in another roughly $2.5 to $3.0 million for their draft picks next year, and the Pacers are sitting between $7 and $8 million over the tax threshold. Once you factor in the distribution that they won’t receive for being under the tax (an average of about $3.0 million), this news could cost the floundering Pacers $10 to $11 million next season.

Ouch.

In order to avoid this, the Pacers would have to find someone willing to take one of their large contracts in exchange for an expiring. Jeff Foster was a likely candidate, but his $6.7 million may not be big enough. Unless you want to throw Danny on the table, that leaves the Pacers going around, hat in hand, trying to find a taker for T.J. Ford ($8.5 million), Mike Dunleavy ($10.6 million) or Troy Murphy ($12.0 million).  Unfortunately, they’ll be jostling with several other teams trying to do the same thing — possibly with even better players being offered for peanuts — and knocking on the doors of teams who won’t be anxious to take on salary — even for good players. Plus, let’s admit that the players they’ll be offering, at those prices, aren’t exactly enticing even in a healthy fiscal environment.

It seems the best of the very, very long shots might be working out a deal with Cleveland, trading Murphy for Big Z. This has been floated around the internet, but there’s really no reason to believe there’s any substance to it.  However, Murphy would make a nice complement to both Shaq and LeBron, and if Cleveland continues to unimpress, it might be do-able. Then again, Cleveland has already been mentioned as interested in trading for Stephen Jackson with the Warriors, but some reporters have noted the Cavs reluctance to give up Big Z due to both him being a big expiring deal ($11.5 million) they could use for something else later and “Shaq insurance,” meaning a back-up plan for the team in case Shaq gets hurt/doesn’t work out.

Ultimately, the Pacers can see the shore of cap relief ahead in the Summer of 2011, but the seas are getting rougher — and it is getting harder for the Pacers not to drown, financially, in sight of it.

The 2010-11 Salary Cap: Here Thar Be Monsters.

The Pacers have turned in the paperwork to pick up the third-year option on Rush and Hibbert’s contracts.

This is no surprise, and I had noted their contract amounts in an earlier Cap & Trade.

Hibbert has shown some improvement over last year, averaging 7 points and just over 7 boards in his first two games.  However, he’s only shooting 44% and has looked very slow.  Fouling continues to limit his minutes and effectiveness, as he’s getting whistled for just under 7 fouls every 36 minutes.

Brandon Rush has started the first two games, or at least that’s the rumor.  I guess “non-existent” would be the polite way to describe his performance.

In any case, it’s far too early to know for sure what kind of players either of these guys will be, so the Pacers made the no-brainer move of picking up their options.

Teams have until the October 31 preceding the player’s second season to exercise their option for the player’s third season. Likewise, they have until the October 31 preceding the player’s third season to exercise their option for the player’s fourth season (see question number 50 for more information on options). If the team invokes both options (keeping the player for all four seasons) then the player becomes a restricted free agents following his fourth season (see question number 36 for more information on restricted free agency). If the team declines either option, then the player enters free agency as an unrestricted free agent.

So, as Pacer faithful, you should keep an eye out for the announcements on the disposition of the options for both Brandon Rush and Roy Hibbert.  According to ShamSports.com, Rush’s option is for $2,069,040, while Hibbert’s is for $1,685,280.  It is an almost foregone conclusion that these options will be picked up, but it’s pretty much the only suspense we have left going this preseason.

Luther Head

Head, a 6’3″ Illinois product, comes to the Pacers after spending the bulk of his four-year career as a Houston Rocket. The combo guard (code for short shooting guard) is a career 39% shooter from beyond the arc, something that should be put to good use under Jim O’Brien. He’s not a big scorer, but he could provide a little quick offense…particularly during the wasteland of the third.

Mike Wells tweeted that he’s signed a one-year contract at the minimum salary, only partially guaranteed. As a four-year veteran, he would be paid about $885,000 for a full season.

AJ Price

Drafted 52nd out of Connecticut, AJ Price showed some promise in the Orlando Summer League, averaging 8 points and 3 assists and generally looking like a nice pairing with 2nd year Center, Roy Hibbert. Jim O’Brien has said he could be the “steal of the draft,” but judging from the contract, the Pacers are hedging their bets.

Price was signed to a three-year contract totaling about $458,000 this season, and $2.1 million over its length.  However, there are very few guarantees. As usual, Sham at Shamsports.com has the most complete and accurate salary info and tidbits.

A.J. Price: Signed a three year minimum salary contract in September 2009. First year is $175,000 guaranteed, becoming $300,000 guaranteed if Price is not waived on or before December 1st, and becoming fully guaranteed if not waived on or before January 1st 2010. Second year is fully unguaranteed, becoming $175,000 guaranteed if not waived before August 1st 2010, becoming $380,000 guaranteed if not waived on or before 2010 opening night, becoming $531,000 guaranteed if not waived or on before 1st December 2010, and becoming fully guaranteed if ntow aived on or before January 5th 2011. Last year is also fully unguaranteed, becoming $200,000 guaranteed if not waived on or before July 29th 2011, and becoming fully guaranteed if not waived on or before opening night 2011. Phewph.

Translation: Rent, AJ, don’t buy.

Cap Ramifications

Both of these deals are very small and easy to exit for the Pacers. Should both stay with the team for the full season, they will be paid a little over $1.3 million, or about what Troy Murphy makes every 10 games. The cap hit would be about $50,000 less than their total salaries, because the league actually reimburses the team for part of his salary – any amount above the minimum salary level for a two-year veteran.

The Pacers’ cap figure after these two signings is approximately $66.7 million, leaving them with about $3.2 million below the luxury tax threshold. They have effectively used up both their Mid-Level and Bi-Annual Exceptions, so the only contracts they could offer free agents at this point are Minimum Level contract.

Nudge, Nudge.  Wink, Wink.

It’s at this point that I suggest you go ahead and get all of the jokes and bad puns out of your system, because they’re going to get very tired by the time the season starts. For variety, I suggest you work in some of the fine Mike Meyers work from So I Married an Axe Murderer.

With any luck, it will distract you from the realization that we are almost certain to see a lineup of TJ Ford, Luther Head, Dahntay Jones, Danny Granger and Troy Murphy at some point this season.

To help those interested in the Pacers find some clarity between these two inextricable worlds of basketball and finance, Eight Points, Nine Seconds is introducing a new feature called “Cap & Trade.” It’s purpose is to help explain the salary cap and luxury tax implications of any personnel moves made by Pacers, and occasionally explain why certain moves were not made. This will generally appear as a companion piece to the more important (and more entertaining) basketball analysis, but there will also be periodic updates at key points, such as the start of the season, and the beginning of the summer free-agency period.

We will also have a resource page called “Salary Central” (coming soon) that will show player salaries by year, along with information on cap and tax positions, player/team options, trade and other exceptions available to the Pacers.

For our sources, we will use Shamsports, Hoopshype and the ESPN Trade Machine. For CBA questions, we will rely on the fine work of Larry Coon’s Salary Cap FAQ. Other sources, such as the NBA Players’ Association Website, will be noted when used.

Here’s an update on where the Pacers currently stand on a few notable fronts.

Payroll
The Pacers current payroll for the 2010 season is about $65.4 million, including the Jamaal Tinsley payout. They are over the $57.7 million salary cap, but they are still about $4.5 million below the luxury tax.

Exceptions
The Pacers had three types of exceptions available to them to use to sign free agents this summer, and they’ve used up two of them. They used their Mid-Level Exception (MLE) to sign Earl Watson and Dahntay Jones. They used their Bi-Annual Exception (BAE/LLE) to sign Solomon Jones. This leaves only Minimum Player Exceptions (MPE) available to them if they want to sign any free agents.

Roster Spots
The Pacers currently have 13 of their 15 allowable roster spots filled. They are almost certain to add one more player before the season starts, but probably not two. Here is a breakdown:

• Bigs (6): Troy Murphy, Jeff Foster, Roy Hibbert, Tyler Hansbrough, Solomon Jones, Josh McRoberts
• Wings (4): Danny Granger, Mike Dunleavy, Brandon Rush, Dahntay Jones
• Points (3): T.J. Ford, Earl Watson, Travis Diener

Allen Iverson: AYFKM?
Rumors have circulated that the Pacers might be interested in adding The Answer at a one-year deal around the full MLE. Though these have been attributed to his agent, they are wholly unreliable. The Pacers, as noted above, no longer have their MLE. The only two ways they could get Iverson would be through a sign-and-trade with Detroit (very doubtful) or if AI were to accept the veteran minimum (to play in Indy???). This dog don’t hunt.

Marquis Daniels
The Pacers still hold the rights to Marquis Daniels, affording them the option of re-signing him without needing one of the exceptions listed above. This almost certainly will not happen. Instead, the Pacers are hoping to negotiate a sign-and-trade deal with the Celtics that will bring them back some asset, be it a promising young prospect, draft picks, cash or some combination of them. As of 8/8, it appeared that a deal with Boston would be unlikely. The Pacers have no interest in taking back either Brain Scalabrine or Tony Allen, and they have been unable to find a third team to broker the deal.

A.J. Price
The other player in limbo is second round draft pick A.J. Price from Connecticut. The Pacers hold his rights, as well, so they don’t need one of the exceptions to sign him. As the 52nd pick, he has little leverage, so he will probably have to wait for a resolution of the Daniels situation before getting a contract offer. If he signs, it will likely be at or slightly above the rookie minimum of about $450 thousand.

Will It Be 14 or 15?
Both Larry Bird and Jim O’Brien have expressed the desire to enter the season with only 14 players on the roster. This would provide flexibility in terms of adding players later in the year, either through free agency or taking back more players than they send out in a trade. It also makes sense not to spend a million or so dollars to pay someone to wear a suit on the end of the bench.

All in all, unless something can shake loose in the Daniels/Celtics situation, expect a quiet August and September from the Blue and Gold.