| Frontloading The Cs Past The Garnett Era Authored by Elrod Enchilada - January 31, 2008 - 6:17 pm
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In this article I will take the principle of frontloading and assess how is applies to the Boston Celtics, the team I follow most closely and that I write about for RealGM.
The situation for the Celtics is this: Until then end of the 2009-10 season, the Cs will have Kevin Garnett, Paul Pierce and Ray Allen all under contract. The team will be well over the salary cap until then and probably have to pay the luxury tax in each of those three seasons. The only deadweight contract on the books is Brian Scalabrine, and it is relatively puny and expires in 2010. In 2010, Ray Allen comes off the books. In 2011, Paul Pierce comes off the books. And in 2012 Kevin Garnett comes off the books. If any of these three are re-signed, it is likely that they will take significant reductions in their salaries.
The best presentation of the Celtics salary situation going forward can be seen here
During this season and for the four subsequent seasons, until Garnett’s contract is over, the Celtics are in full-throttle contender mode. They have a superstar, an inner circle of Paul Pierce and Ray Allen, and a nice group of complementary players, including youngsters Rajon Rondo, Kendrick Perkins and Tony Allen. The first order of business for Danny Ainge is to get the pieces to give this team the best chance to win a title right now. Building for the future, planning for a post-Garnett future, is a low priority.
Technically, the Celtics might be able to get under the salary cap in 2011, when Paul Pierce comes off the books, but I suspect doing so might interfere with keeping the team contender during the Garnett era. Plus I think Paul might stick around for another year. I think it is wiser to plan for being significantly under the cap in 2012, and play to win all the marbles every year before then.
But there are steps Danny Ainge and the Celtics can take right now that will leave the team in a much better position to field a contender in the years following 2012, steps that will not undermine the competitive position of the team this year or for the four subsequent seasons. That is what I want to discuss and demonstrate in this article.
There are two crucial strategic steps Ainge and the Celtics need to deploy to accomplish the goals of bolstering a contender while simultaneously setting the team up to be in the best possible position post-Garnett.
First, although the Celtics are well over the cap, they can use the mid-level exception which runs in the $5-6 million range every year. It can be used for a single player, or divided among many. In 2008 the Celtics are eligible to use the lower-level bi-annual exception, valued at roughly $2 million; it can be used every second year. It too can be used for one player or divided up.
Ainge used the MLE in 2007 to corral James Posey and Eddie House, signing both to short-term deals. Ainge should continue to use these exceptions to bring in veteran players for short-term deals, generally one or two years. A fringe benefit is that these become highly tradable contracts if they are for only a year and Ainge wants to affect a mid-season trade. As the team plays well it is going to be easier over the next four seasons to bring in quality veterans at reduced rates for one or two year deals to take a final fling as a role player on a contender.
The key point is that Ainge does not want to use these exceptions to sign journeymen veterans to long deals with guaranteed annual salary increases. These sorts of five-year, guaranteed-annual-raise signings, like the deals for Jared Jeffries, Vladimir Radmanovic, Stromile Swift and Jerome James, are real cap killers. Ideally all of Ainge’s free agents are off the books by 2012. The worst possible world is a roster in 2012-13 filled with three or four players with MLE-based $8 million contracts, who are all probably overpaid and mediocre and difficult to trade. Danny wants to enter 2012 with a clean a slate as possible in terms of good contracts. It is paramount that Ainge create cap space for the post-Garnett era.
This is considerable free agent space to bring in the Poseys and Houses of the world to supplement the team core and fill areas of immediate need. I doubt Danny will need to use anywhere near all of it. Accordingly, it would be ideal if Danny traded no additional no. 1 picks beyond the 2009 no. 1 going to the Wolves; the draft is where he can locate young talent to be the foundation of the post-Garnett era
Second, Ainge should attempt to frontload all long-term contracts between now and 2012. The idea should be to pay more now – even if it means luxury tax penalties – so as to be able to have a young core in place by 2012 and significant cap space for acquiring expense all-star caliber veteran talent. The actual amount the team pays is not different by frontloading, it is just put up front. I explained how frontloading works in part one, so I will not repeat it here. Danny has already used frontloading in the case of Kendrick Perkins, though only having a decrease going from the first to the second year of his five year deal.
What the following exercise will demonstrate is that by using frontloading and avoiding long-term free agent deals for role players, Danny can keep the current young core intact, add four no. 1 draft picks, a fifth number 1 in the 2013 draft, and still be well under the cap in 2012 and 2013. Danny can get the Celtics well under the cap in both 2012 and 2013 without having to throw valuable players overboard. That will give him a two year window to sign stud free agents all the while keeping a solid veteran core together. Without frontloading, the Cs can still get under the cap, but nowhere near as much, especially in 2013. It could make all the difference in the world.
For the sake of our discussion, let us assume:
1. KG retires in 2012 at age 36. If Ray and Paul play past their current contracts, they retire in 2012 as well. Ray turns 37 that year and Paul 35. With frontloading, as I will demonstrate, it may be possible to bring KG or Paul Pierce back at a reduced rate and still sign a major free agent.
2. Danny signs all of the young players on the Cs currently to long-term deals when their current contracts end. This means Rondo, Tony Allen, Pruitt, Powe and Davis. He extends Kendrick Perkins. I will estimate the player’s value, probably erring on the high side. This is of course almost impossible to do accurately, especially for Pruitt and Davis.
3. Danny signs his no. 1 picks in 2008, 2010, 2011and 2012 and they all remain in the team. All four picks are in the bottom half of the first round. I assume the 2008 no. 1 pick pans out and gets a large raise in 2013.
4. I will assume than none of the Cs 2nd rounders make the team. In reality, it is likely that at least one second rounder will become a legit player and at least one number one pick will flop. But they will not be paid very much if they do make the team.
The entire key for this approach to work is that the Celtic owners have to be willing to assume more salary over the next four years. Not Knicks type spending; it will pale compared to the money squandered on Vin Baker. But it will mean much more luxury tax spending. For some teams this would be unthinkable. But Wyc Grousbeck, bless his soul, by signing off on the Ray Allen and Kevin Garnett deals, has made it clear he will not shy away from the luxury tax if the money is spent well. Frontloading is exhibit A in spending money well. If the owners agree to pay greater luxury tax, it will put Ainge and the Celtics in a position to be a very strong franchise past the Garnett era. In the long run, it will probably payoff for ownership and definitely pay off for fans.
What I will demonstrate in the following is that using frontloading and avoiding giving grizzled veteran free agents long deals past 2012, Danny can get the Celtics well under the cap in both 2012 and 2013 without having to throw valuable players overboard. That will give him a two year window to sign stud free agents all the while keeping a solid veteran core together. If a few of the ten players I have on the 2012 roster are stars, the team will be in excellent shape. Given Danny’s drafting skills, I like our chances. Throw in a max-contract superstar, and maybe another quality free agent in 2012 and/or 2013, and we are off to the races. The players he will have on hand in 2012 will all be relatively underpaid and have significantly greater trade value as a result. With luck the Celtics will regroup in short order for another run to contender status.
I understand that this is not going to be the roster we have then. Kendrick Perkins might be out of the league and Gabe Pruitt could be in Malaysia B League with Justin Reed, Orien Greene and Brandon Hunter. Big Baby might be a max contract player. Also, Danny is going to make many trades between now and 2012. But if he trades for similar type contracts, or gives the players he trades for similar type contracts, my point will hold. In fact, I have probably overestimated salary below. Since some of these players will not make it, there may even be more cap room in 2012 and 2013 than I project.
The point of the exercise is to demonstrate the value of frontloading long-term contracts, especially for a team in the Celtics current position.
So here goes. In the appendix to the piece, I present the actual conventional and frontloaded contracts for each of the players.
So here are the Celtic payrolls using these numbers:
The values of all the contracts for the players are the same. In the first case, they are standard contracts with maximum annual raises. In the second case, they are frontloaded contracts. I present the actual year-by-year salaries in the appendix.
2012-13
Conventional:
Tony Allen-- $6,240,000
Rajon Rondo--$10,520,000
Glen Davis-- $5,140,000
Kendrick Perkins--$8,730,000
Leon Powe-- $4,350,000
Gabe Pruitt-- $4,600,000
2008 no. 1 pick--$3,000,000
2010 no. 1 pick--$2,500,000
2011 no. 1 pick--$2,000,000
2012 no. 1 pick--$1,500,000
Grand Total: $49,560,000
Projected salary cap: $68 million
Frontloaded:
Tony Allen-- $4,070,000
Rajon Rondo--$9,480,000
Glen Davis-- $3,836,000
Kendrick Perkins--$8,950,000
Leon Powe-- $3,425,500
Gabe Pruitt-- $3,950,000
2008 no. 1 pick--$3,000,000
2010 no. 1 pick--$2,500,000
2011 no. 1 pick--$2,000,000
2012 no. 1 pick--$1,500,000
Grand Total: $42,661,500
Projected salary cap: $68 million
***********************************
2013-14
Conventional:
Tony Allen-- $6,700,000
Rajon Rondo--$11,630,000
Glen Davis-- $5,550,000
Kendrick Perkins--$9,560,000
Leon Powe-- $4,700,000
Gabe Pruitt-- $5,000,000
2008 no. 1 pick--$8,000,000
2010 no. 1 pick--$3,500,000
2011 no. 1 pick--$3,000,000
2012 no. 1 pick--$2,000,000
2013 no. 1 pick--$2,000,000
Grand Total: $61,640,000
Projected salary cap: $70 million
Frontloaded:
Tony Allen-- $3,335,000
Rajon Rondo--$8,220,000
Glen Davis-- $3,248,000
Kendrick Perkins--$7,900,000
Leon Powe-- $2,900,000
Gabe Pruitt-- $3,425,000
2008 no. 1 pick--$8,000,000
2010 no. 1 pick--$3,500,000
2011 no. 1 pick--$3,000,000
2012 no. 1 pick--$2,000,000
2013 no. 1 pick--$2,000,000
Grand Total: $47,408,000
Projected salary cap: $70 million
NOTES: The difference in cap space by using frontloading rather than conventional contracts in 2012 is $7 million, and it jumps to $14 million in 2013. The cap room to play with thanks to frontloading is $25 million in 2012 and $23 million in 2013.
The frontloading years could even be better because it will be easier to get players to let teams have their final season non-guaranteed if the contracts are frontloaded. Hence, above, the Cs might be able to then simply drop Powe, Allen and Davis in 2013 and get the cap total drops below $40 million.
With this sort of cap space, the Cs can easily make a max contract offer to a player if they wish to do so. Or they can even bring back Kevin Garnett at $10 million per year and pull this off if they so desire. If a good enough player is not available for max contract attention they can wait another year.
The long and short of it is that the Cs would have a good two years to locate a max contract superstar to join what would be a seasoned and (if they are still together) talented core. It all starts with frontloading contracts, and being judicious in bringing in veteran free agents to supplement Garnett and Pierce for the next four or five years. That takes a smart head of basketball operations and a visionary ownership team. With Ainge and Grousbeck we have the right people at the steering wheel.
And note one other point: the Chicago Bulls have already started frontloading with their recent long-term deals with Ben Wallace, Kirk Hinrich and Andres Nocioni. The benefits of frontloading are enormous when a team is signing several players to long-term deals for salaries between the MLE level and the maximum contract. In the example above, the Cs barely get any benefits from those sorts of contract, except for Rondo and a taste of Perkins. Let one or two more teams get hip to frontloading and it may not be optional for anyone. Get on the bus, Danny and Wyc.
APPENDIX:
Note: the numbers do not equate exactly, because frontloaded deals pay slightly less to factor in that the players receive more money early. I also round off.
Tony Allen: 6 years, $33 million.
Conventional:
08-09: $4,400,000
09-10: $4,860,000
10-11: $5,320,000
11-12: $5,780,000
12-13: $6,240,000
13-14: $6,700,000
Frontloaded:
08-09: $7,000,000
09-10: $6,625,000
10-11: $5,535,000
11-12: $4,805,000
12-13: $4,070,000
13-14: $3,335,000
**********************************************
Rajon Rondo: 5 years, $52 million.
Conventional:
10-11: $ 8,700,000
11-12: $ 9,610,000
12-13: $10,520,000
13-14: $11,630,000
14-15: $12,540,000
Frontloaded: (After the two year “window,” the salary increases in the final year, 2014-15)
10-11: $12,000,000
11-12: $10,740,000
12-13: $ 9,480,000
13-14: $ 8,220,000
14-15: $ 9,480,000
**********************************************
Leon Powe: 5 Years, $20 million.
Conventional:
09-10: $3,300,000
10-11: $3,650,000
11-12: $4,000,000
12-13: $4,350,000
13-14: $4,700,000
Frontloaded:
09-10: $5,000,000
10-11: $4,475,000
11-12: $3,950,000
12-13: $3,425,500
13:14: $2,900,000
**********************************************
Glen “Big Baby” Davis: 5 years, $24 million.
Conventional:
09-10: $3,900,000
10-11: $4,310,000
11-12: $4,730,000
12-13: $5,140,000
13-14: $5,550,000
Frontloaded:
09-10: $5,600,000
10-11: $5,012,000
11-12: $4,424,000
12-13: $3,836,000
13-14: $3,248,000
*********************************************
Gabe Pruitt: 5 years, $23 million.
Conventional:
10-11: $3,800,000
11-12: $4,200,000
12-13: $4,600,000
13-14: $5,000,000
14-15: $5,400,000
Frontloaded: (After the two year “window,” the salary increase in the final year, 2014-15.)
10-11: $5,000,000
11-12: $4,475,000
12-13: $3,950,000
13-14: $3,425,000
14-15: $3,950,000
**************************************************
Kendrick Perkins: 5 years, $48 million
Conventional:
11-12: $ 7,900,000
12-13: $ 8,730,000
13-14: $ 9,560,000
14-15: $10,390,000
15-16: $11,220,000
Frontloaded: (After the two year “window,” the salary increases in the final two years.)
11-12: $10,000,000
12-13: $ 8,950,000
13-14: $ 7,900,000
14-15: $ 8,950,000
15-16: $10,000,000 |
