Last July proved one of the splashiest in Bucks' franchise history, as Milwaukee beat out the bright lights and open check books in New York and Los Angeles for the services of Greg Monroe. But unfortunately a splash sometimes leaves you all wet; though Monroe was essentially the same productive guy he had been Detroit, he couldn't help a Bucks defense that seemed lost without Jared Dudley and Zaza Pachulia, and his ability to become a free agent in 2017 only further limits the Bucks' ability to be patient.
Twelve months and no playoffs later, the Bucks once again enter a summer with cash to spend -- as much as $27 million, perhaps more realistically around $18 million. Of course, as we laid out in part I of our summer preview, they'll have plenty of company in that regard. So how might they spend it? In keeping with our FAQ theme, today we'll look at the possibility of signing a big name and how it might affect the Bucks' long-term flexibility.
So can the Bucks sign a max free agent in July?
Depending on the age of the the guy we're talking about, the quick answer is most likely yes. To start, remember that max salaries are dependent on both the cap level and a player's years of experience in the NBA, so not all max deals are created equal. The table below shows the maximum salaries for players this past season and then estimates them for future years based on the NBA's most recent cap projections from April:
Note that while the three max salary levels are usually referred to as equaling 25%, 30% and 35% of the total cap, the cap figure used for calculating max deals is slightly different (and lower) than the cap level used for team payrolls (confusing, I know). As a result, the value of a max deal for each of those slots is actually a bit lower in percentage terms than the nominal values usually quoted. This past year, the 25% level was actually just over 23%, the 30% level was just over 28% and the 35% level was closer to 32%. What you, thought this would be straight forward?
As outlined in part I of our summer preview, a $92 million cap level could mean the Bucks could have as much as $27 million in cap space at their disposal, slightly more than the projected max salary of a 6-9 year veteran but around $3 million less than that of a 10+ year veteran. Still, keep in mind that the Bucks could open up further room if they deal Greg Monroe, John Henson, Michael Carter-Williams or any other player and take back less money in return (note: this isn't far-fetched since so many teams will have cap space to absorb salary). That's important, because maxing out their cap space would also require renouncing the Bird rights to free agents Jerryd Bayless and Miles Plumlee, so it could well require sacrificing other guys that they'd prefer to keep. That's especially true in Plumlee's case, since renouncing him would mean losing matching rights on any deal he might receive as a restricted free agent.
So should the Bucks try to sign a max free agent in July?
That's probably the better question, and my general answer is probably not.
The more diplomatic answer is that it depends a lot on the player (duh) and how long of a max deal we're talking about; if Kevin Durant or LeBron James feel like making Lake Michigan a bigger part of their lives, the Bucks probably pick up the phone, because...well, obviously. But like many teams, the Bucks may struggle to find productive ways to spend all their cap room this summer and next. Good but non-superstars like Mike Conley and Al Horford (both eligible for deals starting at $27 million) are all but assured to sign four-year, $100+ million deals, the kind of money that wouldn't be a problem for the Bucks to stomach over the next two seasons but could be problematic down the road. Long story short: while they could certainly use some veteran help, I'd be surprised if the Bucks seriously pursue any max free agents.
To see why, let's take another look at the Bucks' cap picture assuming Giannis and Jabari get maxed out, Monroe and MCW depart (without factoring in their replacements), and Ennis and Vaughn (or whoever ultimately replaces them) sign for $8 million annually once their rookie deals expire in 2018 and 2019, respectively. Note: if $8 million per year sounds like a lot for Ennis or Vaughn, keep in mind that the salaries of middle class players are going to spike sharply in the coming years, with $10+ million likely becoming a normal "decent rotation guy" salary. In green are projected new deals to give you an idea of how much the Bucks' cap could swell over the coming years:
There are a bunch of simplifying assumptions here, including a) that the next CBA doesn't change the current revenue split between players and owners b) the Bucks end up with mid/late first round picks each year and c) the young guys currently on the roster see out their contracts. But the key takeaway is that the Bucks' cap flexibility will likely diminish dramatically in 2018 and 2019 due to two key factors. First, the influx of TV money will drive major cap surges over the next two summers, but then it levels off thereafter. Secondly, and perhaps more importantly, the Bucks' two youngest stars won't be on their rookie deals forever.
While there's no guarantee that both Giannis Antetokounmpo and Jabari Parker sign max extensions, for practical purposes I think that's how the Bucks have to be approaching things for cap planning purposes. Giannis is a virtual certainty to get maxed either this summer or when he hits restricted free agency in 2017, which would entitle him to just under 25% of whatever the cap is in the 2017/18 season with raises up to 7.5% of that amount -- currently projected at around $144 million over five years. Jabari's potential max would actually be slightly less due to the cap projecting to go down slightly in 2018 (more on why that is later), but overall these are huge numbers we're talking about.
Assuming those guys get paid, the 2019 situation becomes especially acute when you consider that Khris Middleton can opt out of his laughably cheap $13 million player option and likely double his salary as a 27-year-old free agent three summers from now. That's obviously still a ways off, but any four-year deals signed by the Bucks this summer could limit their flexibility at that point, especially if it's a guy who may be on the downside of their career (and thus harder to trade) at that point.
Bottom line: assuming the Bucks want to build and maintain a contender around their current core, they'll almost certainly have to spend well over the cap starting in 2018 and could threaten the tax level in 2019. By 2019, huge deals for Giannis, Jabari, and Khris and a fairly young roster around them would leave just $12 million under the projected tax. It's not to say Bucks ownership would refuse to go over the tax -- especially if the team is contending -- but there are both strategic and financial reasons for avoiding it.
It's also not to say a huge signing is a complete non-starter: three years is a long time, especially considering that rosters change quickly and the cap and tax could expand even more rapidly than projected. But it's a "tread with caution" type situation for sure, and based on the NBA's current projections there's basically no way for the Bucks to add another max deal to the mix without putting themselves over the projected tax level in 2019 and possibly 2018. Thus, signing a veteran this summer to a four-year max should be significantly less appealing than signing a two- or even three-year deal.
What about rookie scale contracts? Are those also going up?
Among the other key takeaways is the importance of the Bucks' drafting well going forward. Because rookie scale contracts aren't increasing nearly as quickly as the overall cap, the relative value offered by young players on cheap rookie deals is only going to increase. Moreover, a team built around two 21-year-olds can ill afford to be planning just for the next couple years; it's not to say the Bucks don't need to improve and add some veteran savvy, because they certainly do. But selling out first round picks for guys in their late 20s is a dicey proposition given the projected primes of Giannis and Jabari are still probably a couple years away.
On top of that, first round picks remain the team's best chance at unearthing another potential long-term star, and getting another top talent on a cheap deal might be crucial to putting them over the top three or four years from now. Put more simply: it's essential that a team like the Bucks continue to find rotation-worthy (or better) players in the draft, because there simply isn't going to be enough money to fill out the four through ten spots in the rotation entirely with well-paid veterans.
All that is why I think the Bucks should be very wary of trading this year's pick for a veteran: it's virtually impossible to build a title-worthy team under the tax unless you're getting huge contributions from one or two guys on rookie or otherwise artificially cheap deals, and right now it's not obvious there's anyone that fits the bill on the current roster once Giannis and Jabari sign their extensions (unless you count Middleton). Especially in light of Rashad Vaughn's struggles, this year's lottery pick may be their best chance at finding a guy who could be contributing major minutes for minor dollars in the playoffs a couple years from now, and for all we know that player could ultimately be as good or better than even a guy like Parker, too. So while keeping picks and playing the long game might not be as sexy as loading up on veterans to accelerate the Bucks' path to contention, in this case the patient strategy may well take them further in the long run.
In Part III coming soon: Assessing the value of Jerryd Bayless and Miles Plumlee, and how the Bucks can get better without breaking the bank.