The 2010 Outlook

This is going to be a topic of conversation for another 365 days so let's get the facts straight here and use this as a foundation of all future discussions involving the Knicks salary cap situation for next summer. The current contracts on the payroll for 2010-11: Eddy Curry $11.2M Jared Jeffries $6.8M Danilo Gallinari $3.3M Wilson Chandler $2.1M Jordan Hill $2M Toney Douglas $830K Total: $26.2M With only six players under contract, and no first round pick (Utah has the rights to it) that leaves six "cap hold" slots at $1.2M each and brings the total to $33.4M. Now, keep in mind, that is just in the current condition as we blog today. If the Knicks add any players -- such as Grant Hill, or sign David Lee to an extension -- the numbers obviously change. But we're working off the current state of the payroll right now. We'll use this as our base as the situation changes. Keep in mind that the Knicks would have to renounce the Bird Rights rights to the unrestricted free agents who expire after this coming season (Chris Duhon, Al Harrington, Darko Milicic, etc.) to clear their cap hold from the cap. Bu if Lee and Robinson take their QOs, those numbers ($2.9M for Nate, $2.7M for Lee) would be the "holds" in their spots, unless their Bird Rights, too, were renounced. Now, if the early prognostications are accurate, the NBA salary cap could be as low as $50M in 2010-11. Let's use that as our doomsday formula here. Keep in mind the projections could be wrong and the cap number could be higher, which would change everything. But if we believe the doomsday prophecies, that would leave -- not counting Lee, Robinson or any other UFA's Bird Rights -- just $17M in cap space for the Knicks to spend in free agency in the big summer of 2010. Sounds devastating, especially considering the hope to lure LeBron James to New York. Before the economic downfall, the Knicks' original plan was to clear enough space to land TWO high-end free agents in 2010. But in the current state, they may only have enough space to get one in free agency. OK, then consider this: The CBA gives power to the "home" team for free agents. They have the ability to sign their own player to a maximum of six years with 10.5 percent raises each year. All other teams can only go five years at length and 8 percent. In LeBron's case -- and that of Dwyane Wade, Chris Bosh, Joe Johson, Amare Stoudemire, et al -- the plummeting NBA salary cap could actually result in taking a loss in the first season. Consider that LeBron's option year of 2010-11 pays him $17.1M. If he opts out and the cap drops to $50M, the max LeBron would make in 2010-11, the first year of any new deal with any team, including Cleveland, is $15M. The Cavs can go six years at 10.5 percent raises, which would make their maximum deal total about $116.5M, with an average of roughly $19.4M per. A team such as the Knicks can only do five years, with 8 percent raises, which would make their maximum offer total about $88M, and an average of $17.6M per. Now the Knicks could be creative and perhaps give LeBron an opt-out after the third year (2013), when he will be 28 years old and still very much in his prime. The NBA has to certainly hope they have, by then, to have a new CBA in place and, God willing, the economy could be in a recovery, which would send the salary cap limits upward. The Knicks would have James' Bird Rights and then could open the Cablevision vault. Those are big ifs, of course. But there are big ifs in Cleveland, too. Such as, how long can Dan Gilbert sustain such a high payroll while getting middle-market revenue? Can Danny Ferry continue to build a high-caliber team around James while also paying him a max salary? Will high-end free agents want to go to Cleveland to play second-fiddle in salary and in touches? With New Yok comes so many other variables and other potential sweeteners, such as the impact that choosing New York would have on the new deal LeBron inks with Nike, which, coincidentally, also expires in 2010. If LeBron goes to New York, there's little doubt his marketing value skyrockets to even greater heights than it has already. Nike has never had a basketball megastar in New York. They already have Kobe Bryant in L.A. OK, here goes the cold water again. If LeBron signs an extension this summer (July 18th is the date he can) with the Cavs, with the salary cap set at $57.7M, by the max contract formula (30 percent) he would get $17.3M in the first year (slightly more than the option year on the current deal) and the total package to stay in Cleveland would bring him a six-year deal worth about $134.9M, with $22.4M per annum. Biiiiiig difference. So is it worth it to him to potentially leave $2.1M on the table to step into free agency one year before his deal officially expires? Or, considering the economic climate, does LeBron go for the money up front and perhaps work in an early termintion option midway through the deal to give himself some flexibility? This is something all of the opt-out FAs in 2010 will need to consider. And it could result in the Knicks' rebuilding plan taking a little more time than originally thought. Of course the Knicks could always change the course and pursue high-end players via trades and sign-and-trade deals next summer. While every team in the NBA will feel the hit caused by the economy, the Knicks are one of the few teams that will maintain the resources to carry big contracts and willingly pay out luxury tax. OK, Fixers, so there you have it. The situation in a nutshell, from as best as I can explain it after research, number crunching and some guidance from CBA expert Larry Coon. (Please feel free to correct any arithmatic or factual errors that might have slipped by me here at 1:35 am.) Again, this situation is expected to change over the course of the next 11 months. The Knicks could find a way to move the Curry or Jeffries contracts for expiring deals to clear more cap space in 2010, but, as we detailed above, the limitations on what they can offer LeBron as compared to the Cavs this summer make his decision in 2009 very curious. If LeBron chooses not to sign an extension this summer to give up free agency in 2010, it's an obvious sign that his decision is clearly not about salary.