The Financial State of the Wolves

I present this FAQ to everyone who finds themselves wondering about the state of the Timberwolves team salary, and just where exactly this club currently stands.  I’m not talking about just "right now"… but also over the next few seasons.  This is a snapshot and analyzation of the roster and salary breakdown that I hope many of you will find helpful.  Do you find yourself asking any of the following questions: "How much money do we have to spend?" or "How does the luxury tax work?" or "Are we over the luxury tax?" or "What is the status of certain contracts on our team?"  Perhaps you are just tired of going over to Hoopshype.com every time you want to check a certain T-Wolf’s contract status.  If so, this may be the resource for you.

 For those of you that are tired of constantly combing the internet and various resources for accurate Minnesota Timberwolves Salary information, I have re-created the Hoopshype.com table below.  This table was also created with the help of Larry Coon’s NBA Salary Cap FAQ.  I believe it to be accurate to the best of my ability.

Below are our current salary obligations for the next five NBA seasons.  I have included the projected contract to rookie Chris Richard (it is the rookie minimum, which is on par with the other second round draft picks that have already signed.)  However, since we are over the legal maximum roster size, I did not include Richard’s salary in our total for this season.

As you can probably infer from the KEY, the text appearing in Blue is for "player options;" the text in Red is for "team options;" the text in Green is for a "qualifying offer;" and the ugly Purplish text is Troy Hudson’s buyout amount.  For the "TOTAL" figure, I did not account for team options or qualifying offers.  If we were under the maximum roster size, I would have added those figures in.  However, being that we currently have 16 bodies for a 15 man squad, there is no guarantee that all options will be picked up for every player.  Perhaps if the roster is reduced, that will be true… but not at this moment in time.  Also, as I said, Richard is not added to the "TOTAL," nor are any projected amounts for future draft picks. 

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Helpful Resources:

TWolves Team Salary According to Hoopshype.com

Larry Coon’s NBA Salary Cap FAQ

 Minnesota Timberwolves Player Salaries:

 KEY:  PLAYER OPTION / TEAM OPTION / QUALIFYING OFFER / BUYOUT AMOUNT

Below I will be answering questions that are commonplace in regards to the NBA Salary Cap, our roster, and other miscellaneous items.  I did my best to provide these answers accurately, however I may not be 100% correct about every subject.  Let me just say that extensive research has been compiled from various factual and legitimate resources to arrive at these answers.

Frequently Asked Questions for The Wolves Roster/Players’ Contract Status/Salary and Luxury Caps/Miscellaneous Items:

1) What is the NBA Salary Cap for the 2007-2008 season?  What is the "Luxury Tax" and it’s amount?  Why are these numbers different?

 The new salary cap for the 2007-08 season of $55.63 million went into affect on July 11th, 2007.  The luxury tax level for the 2007-08 season has been set at $67.865 million. Any team whose team salary exceeds that figure will pay a $1 tax for each $1 by which it exceeds $67.865 million.

 The Salary Cap is a "soft" cap, which means the amount can be exceeded due to various exceptions.  This helps promote more players staying with their original teams, rather than having even more player movement.  Each July the league projects Basketball Related Income (BRI) and benefits for the upcoming season.  They take a defined percentage of projected BRI (51% each year through 2011-12), subtract projected benefits (about $112 million in 2005-06), and make adjustments based on whether the previous season’s BRI was above or below projections.  They then divide by the number of NBA teams (except expansion teams in their first two seasons) to arrive at the cap.  The salary cap adjusts each year on the first day following the July Moratorium.

 The Luxury Cap is the bane of Isiah Thomas’s existence… err, a mechanism that helps control team spending.  As I said above, teams pay a "dollar for dollar" tax over the listed amount.  Like the Salary Cap, the Luxury Tax level is determined prior to the season, and is computed by taking 61% of projected BRI, subtracting projected benefits ($112 million in 2005-06), and adjusting for whether the previous season’s BRI was above or below projections.  They then divide by the number of teams (except expansion teams in their first two seasons) to arrive at the tax level. 

2) How much have the Wolves spent? How much do we have left to spend?

 The Wolves team salary is currently at $67,466,921.  None of the salary cap exceptions (see number 3) have been used as of September 12th, 2007 to reach this amount.  However, due to the Wolves being over the max roster size of 15 players, the chances of bringing in any free agents are severely hindered by the roster size, as well as our total cap figure.  Even though we are over the $55 million salary cap, we could still have added (and still can) players using the Mid Level Exception, the Bi-Annual Exception (aka the LLE), and/or the Minimum Player Exception.  This point is moot however, unless the Wolves are able to unload a few contracts before then signing any remaining free agents.

Glen Taylor is happy because the Wolves are almost $400,000 under the Luxury Tax.  This allows him to not have to pay the "dollar for dollar tax," as well as share in the tax money collected from the teams over the cap.  The tax money paid by teams over the cap is split equally amongst all the remaining teams still under the Luxury Tax.  It is perfectly acceptable to be over the Salary Cap (but under the Luxury Cap) and still receive the equal share of the tax payments.  According to HoopsHype.com, the total amount of luxury tax paid by 8 teams for this season (as of today) is: $63,409,851 Million.  This number divided equally by the 22 remaining teams equals $2,882,266 Million for Glen Taylor’s pocket. This number is subject to change if teams drop below, or climb above the tax threshold.

3) What are the "exceptions" to the Salary Cap?

The various "exceptions" as outlined below, allow teams to spend above the Salary Cap.  Currently, 24 of the 30 NBA teams are above the Salary Cap.  I have listed the popular and well-known exceptions, however other minor ones exist as well.

LARRY BIRD EXCEPTION: This is the best known exception, also known as a team having a player’s "Bird Rights."  This exception allows teams to exceed the salary cap to re-sign their own free agents, up to the player’s maximum salary. The player must have played for three seasons without being waived or changing teams as a free agent.

MID-LEVEL SALARY EXCEPTION (MLE):  This exception can be used annually for teams that are OVER the Salary Cap only. It can be used entirely on one player, or split among several players.  The MLE can be used to sign players to contracts for a maximum of five years, with 8% annual raises each year.  For the 2007-08 season, the MLE can be used to give free agents contracts starting at $5.356 million.  You can thank this exception for providing the Wolves with such stunningly mind-blowing players such as Troy Hudson, Marko Jaric, and Mike James.  (Amazingly, they are all guards.)  One player this exception did not provide us was Chauncey Billups… although I tend to think Kevin McHale is more to blame than an intangible concept.

BI-ANNUAL EXCEPTION (aka the "Million Dollar Exception" or LLE):  This exception can only be used bi-annually for teams that are OVER the Salary Cap. It can be used entirely on one player, or split among several players.  The LLE can be used to sign players to contracts for a maximum of two years, with up to an 8% raise in the second season.   This exception was previously named the "$1 Million exception" (since it was only valued at $1 million in 1998-99).  For the 2007-08 season, the LLE is set at $1.83 million.  For the 2007-08 season, the LLE will be $1.91 million.

ROOKIE EXCEPTION:  Teams may sign their first round draft picks to rookie "scale" contracts even if they will be over the cap as a result.  Thank God, becaus I like our rookies the past few drafts and would prefer that we keep them.

MINIMUM PLAYER SALARY EXCEPTION:  Teams can offer two year minimum salary contracts to an unlimited number of players (as long as the roster remains at a max of 15), even if they are over the Salary Cap.  These contracts may only be two years in length and cannot contain a signing bonus. The "Minimum Contract Amount" varies based upon a player’s service time.  For a rookie, the minimum salary for 2007-08 is $427,163.  For a player with ten or more years worth of service time, the minimum is $1,219,590.  This is how I have calculated Chris Richard’s salary in the table above, assuming we jettison another player to offer him a contract.  Due to the Wolves being over the maximum roster size, this exception should not apply to the Wolves this season… or more aptly, ever.

TRADED PLAYER EXCEPTION:  This exception is used for trades, and cannot be used to sign free agents.  It allows teams to acquire more salary in a trade than they send away.  These exceptions are acquired There are two types of "trade exceptions": Simultaneous and non-simultaneous.  These things are ghastly creatures, and I’d prefer to direct you towards Larry Coon.  One thing to know is that one cannot combine any players or other exceptions along with a trade exception in a future trade.  Many people are not aware of this.  Just know that we don’t have any of these exceptions at our disposal in the upcoming year… but if we did, I’m sure we’d use them rather than just let them expire after one year. Ha. 

4) How many players are we still responsible for paying this season?   How many players do we have under contract on our roster this season?  What is the maximum roster size?  What is the minimum roster size?

Currently, the Wolves are paying actual monies to 16 players and 1 estate.  However, our roster size is currently at 15 players under contract for the upcoming season.  We are still paying two players that were here last year, but are no longer on our squad: Troy Hudson (see number 6) and Eddie Griffin (see number 7.)  Also, the Wolves hold the draft rights to Chris Richard, our second round draft pick this past draft. He is currently un-signed.

Rosters must be finalized on or before October 31, 2007.  At this point, teams may have a maximum of 15 players on their roster.  Teams must have a minimum of 13 players on their roster.  Each game up to 12 players can be "active," with at least one player being "inactive."  Teams must also suit up a minimum of 8 players per game.

5.) What is the NBA Developmental League (NBADL)?  Do those players from our team count against our roster size of 15?

The NBADL is a seperate league in which crappy players slug it out affiliated with the NBA.  Teams may assign up to two players with fewer than two years of experience to their NBADL affiliate.  Each player can be assigned no more than three times per season.

Players assigned to the NBA Developmental League DO count towards the roster limit of 15, and are automatically placed on their team’s Inactive List.

6) What happened to Troy Hudson?  What is a Buy-out?

Troy and the Wolves Front Office amiciably (ha!) reached a contract "buy-out" agreement this past season.  At any time before January 10th, a team and a player can agree to buy-out the remaining salary obligation to a player.  This must be done before January 10th each season, because on that day all contracts automatically become fully guaranteed for the remainder of the season, due to a 1999-00 provision to the Collective Bargaining Agreement (CBA.)  A buy-out results in the player being waived, and the team paying that player a sum of money less than the full amount remaining on his contract.  The player becomes an unrestricted free agent (after he clears waivers) and is free to sign with any team he chooses (unless you are Troy Hudson… then you stay home and make chart topping rap cds.)

It would be awesome if the Wolves could buy-out Mark Blount, but I won’t push my luck.  Regardless, something needs to be done if the Wolves are planning on adding Chris Richard to the roster.

One team that wishes it could buy-out a player is the Boston Red Sox.  The player in question is J.D. Drew and his $70 million dollar contract.  In hindsight, they probably just shouldn’t have signed him this past off-season.  Oops.

6 b) So, how much was Troy’s buy-out and how does he affect our overall salary picture?

The team executing the buy-out is responsible for the agreed upon sum.  If the player had more than one season left on his contract, then the buy-out money is distributed among those seasons in proportion to the original salary. 

In Hudson’s deal, he had two years left on his contract (plus a team option year which is NOT taken into account) and he agreed to a $9,804,800 million buyout.  This is then charged over the next two seasons in proportion to his original deal.  Being that his original two years were for a total of $12,256,000 million, the Wolves saved $2,451,200 Million, or approximately 20% on the buy-out.

6 c) Where will Troy Hudson play next season?

If the other 29 teams are smart, nowhere.

7)  R.I.P Eddie Griffin.  Is he still under contract on our roster?  What happens to the salary we owe him?

No, Eddie is not on our 15 man roster.  The Wolves simply cut him last season.  They did not reach a buy-out agreement, and thusly still owed him the full remainder of his contract.  So, we still have to pay Eddie, but we were able to replace his roster spot with someone else. 

Any money paid to a player is included in team salary, even if the player has retired or passed away while under contract.  According to Larry Coon, the DISABLED PLAYER EXCEPTION could apply to the Wolves in this instance.  Here is what he has to say:

"This exception allows a team which is over the cap to acquire a replacement for a disabled player who will be out for the remainder of that season (if the player is disabled between July 1 and November 30) or the following season (if the player is disabled after November 30). This exception can also be granted in the event of a player’s death.  This exception can only be used to acquire one player.  The maximum salary for the replacement player is 50% of the injured player’s salary, or the average salary, whichever is less.  Approval from the league (based on a determination by an NBA-designated physician) is required for this exception to be used."

I highly doubt the Wolves "brain trust" is aware of this provision… even if they are aware, they can’t apply it towards a replacement player because Griffin was cut from our team last season.  The only real benefit remaining from this exception would be to not have his salary count against the cap, but the Wolves are under the Luxury Tax at the moment, so I doubt they will be applying for this provision.  The bottom line is that they have to pay the full $2.9 million remaining on the contract to Griffin’s estate, but it luckily won’t be taxed "dollar for dollar" due to the luxury tax threshold.

7 b) That’s not fair, why does his contract still count against our salary cap even though he died?

Life’s not fair, get used to it.

8) Why haven’t we signed Chris Richard yet?  Is it uncommon to not sign your own draft picks, or to wait this long to sign them?

The overwhelmingly problematic reason that we have not signed Chris Richard is because our roster currently stands at 15 players, which is the league maximum.  We cannot sign Richard to a contract unless we cut/buy-out/or trade an extra player at some point before October 31st, 2007.

It is not uncommon at all to not sign a team’s own second round draft picks.  Often the players are not very good, picked based on potential that doesn’t pan out, or picked due to just plain lazy scouting.  The Wolves had a glorious little run for quite a few seasons in which the majority of our second round picks did not make the team because they flat out sucked.  (Keep in mind, our roster wasn’t at full capacity either.)  Many teams are very close to a full capacity roster, which is another reason why some picks are not signed.

It is also not uncommon for teams in the NBA to wait this long while signing second round picks.  Some second round picks are still unsigned as of today, while some (such as the Celtics Pruitt and Davis) just signed in the past few weeks. I’ve read that Richard is participating in team workouts and activities, which means he’s got to think they will sign him at some point.  The question is, where will the roster spot come from?

 8 b) What if Chris Richard doesn’t sign?

All is not totally lost.  I assume that if an offer is extended to him, he will take it.  The offer would almost undoubtably be the rookie minimum of $427,163.  So long as the team extends the player a qualifying tender (which is essentially a one-year contract offer for the rookie minimum) the Wolves will retain his rights.  If the player signs a contract with a non-NBA team, we own his rights until one year after that contractual obligation ends.  If the player doesn’t sign a contract with another team, we retain his rights until the day of next year’s draft, when the player can be drafted again by any team.

 9) Don’t we have tons of Salary Cap space available now that KG is gone?

Yes and No.  The next three seasons our cap numbers appear to be very low.  However, they are deceptively low.  The reason is that KG was traded for mostly minimum salaried players and one huge expiring contract (Theo’s Corpse – to make the dollar amounts work under the provisions of the CBA.)  Our Cap numbers are so low because there are no contract extensions factored in for any of the players we received, or any of our own players.  The Wolves have at least 8 young "core" players who’s contracts will either need to be extended, or let go, within the next three seasons.  These are all young players that we have either drafted or received from Boston in the KG trade.  Extending the majority of them could easily double our salary cap figure. 

Al Jefferson alone could command a max dollar contract any day now.  The dollar amounts calculated and rules governing signing players to maximum contracts is extremely complicated, and many things are taken into consideration.  Big Al has said he would like a max entension at some point before or during this upcoming season.  He is scheduled to make $2.48 million this season.  Al can sign a six year extension, however it is this season plus five additional years.  A true "max contract" would pay him approximately $13 million in 2008-09, with a total of around $80-85 million throughout the course of the contract. 

9 b) How come he would go from $2.48 million to $13 million?  That is ridiculous! 

Because he is only 22 years old, and he’s that damn good.

9 c) What do I think is a good deal for Big Al?

If we could sign him for an average of around $10 million per year, that would be an absolute steal and should have happened 10 minutes ago.

10) Is our roster going to change before the season starts?

I have to believe it will.  Like I said earlier, Chris Richard has been working out with the team and has been active in the community already, so I’ve got to believe they will sign him.  The big question is who leaves the roster to make this possible?  We need to clear up one space to have a roster size of 15 counting Chris Richard.  The most likely way for this to happen is a 2 for 1 trade involving some combination of the following players: Ricky Davis, Trenton Hassell, Marko Jaric, Sebastion Telfair, Juwan Howard, and Rashad McCants. 

Ricky Davis is enticing because he has probably the most "cap-friendly" contract on our roster for the type of production that he can bring to a team.

Trenton Hassell is enticing because he’s a veteran that knows his role and is capable of playing above average perimeter defense, a huge demand in this league.

Marko Jaric is not very enticing "contract-wise" at all.  He is a versatile guard that can play all three positions, and could maybe help a veteran team in need of a guard off the bench.  I would consider it a miracle if we were able to trade him for anything of value.

Sebastion Telfair is not enticing.  In fact, he’s probably -35% enticing.  He’s operating under his absolutely last chance to stay in the NBA.  If he messes up off the court like he did in Portland and Boston, you can expect to see him in one of the foreign leagues… Or not see him, because honestly, who watches that?

Juwan Howard is semi-enticing.  He’s a veteran post player that can still play decent minutes off the bench.  He’s also known as a great character guy on and off the court.  He has asked for a trade out of Minnesota, but he’s got a valid reason and hasn’t been a distraction.  He thought he was coming here to play with KG, and I don’t blame him.  He would be a decent mentor for our young post players, but it wouldn’t kill me if we got rid of him and replaced him with Chris Richard.  Plus, he’s got a pretty huge contract, which would be nice to dump elsewhere.

Rashad McCants is probably somewhat enticing to some teams.  I don’t see it, but whatever.  Personally, I’d take three ball point pens and a box of paperclips for his contract.  There just isn’t room for McCants, Ricky Davis, and Gerald Green on this team.  One of those three has to go.  I think some teams still think McCants has potential, plus his contract is cheap.  I would think he could be movable in a 2 for 1 trade.

Mark Blount is NOT enticing.  He’s less enticing than buying someone’s used and sullied tighty whities off eBay.  Good luck moving this contract anytime soon.  I didn’t even list him above because I know we’re stuck with him for the time being.

Kevin McHale is the least enticing GM ever.  After he finally leaves us all alone with his gigantic mess of a lineup, he will never work in the NBA again.  That gives me a little piece of mind at least.

I don’t think our roster will change just to accomodate Richard.  It’s because we simply have too many like minded players  that need to be evaluated, so that we know who to keep going forward.  According to rumors, there are still a few bad apples on this team as well (cough cough Mark Blount and Marko Jaric cough cough.)  Ok, so maybe our roster won’t change too much before this season… but there will be some major changes after this season, which could turn out to be instrumental towards the success or failure of our team’s future.

11) What else am I missing? Any questions or comments from you readers?

Maybe I will be updating this in the future, perhaps not.  In the meatime it is up to date as of September 12, 2007.   If you have any additional questions or comments, feel free to ask in the comments section of this article, or in the TWolvesblog Forums. 

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