Cap & Trade

With the addition of Luther Head today and the signing of rookie second rounder AJ Price earlier this month, the Pacers have filled their allotted 15-man roster — at least for the moment.

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.

{ 0 comments }

Though basketball is a game, the NBA is a business. As much as we would like all of the decisions of the Indiana Pacers to be dictated by their needs on the basketball court, the reality is that financial concerns and limitations play a very large role.

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.

Cap & Trade: The Luther Head/AJ Price Edition

Cap & Trade

Recent Posts