Rare is the day that giving a player $23.5 million opens up cap room. But that is exactly what has just happened with Kobe Bryant and the Lakers.
Last week, the Lakers had only four players under contract beyond this season, only two of which were guaranteed. Steve Nash was the only one above the minimum salary, with a guaranteed final season salary of $9,701,000, whilst Robert Sacre is signed to the third year player minimum of $915,243, also guaranteed. Elias Harris' second year player minimum salary of $816,482 meanwhile is fully unguaranteed, whilst Nick Young has a second season on his minimum salary contract at $1,227,985, on which he holds a player option. That, then, was it - the Lakers had only $12,660,710 in committed salary, of which only $10,616,243 was certain to be given.
However, what they also had was an upcoming $91,884,640 in cap holds.
A cap hold is an amount of money that is charged to a team's salary cap number, even though the player concerned is not under contract. These cap holds are either for free agents or unsigned first round draft picks. The science of cap holds is a deliberate ploy that exists to close a loophole; if cap holds did not exist, it is theoretically possible for a team to have its entire roster become free agents at the same time, have their entire cap to spend on other team's free agents, and then use Bird rights to re-sign their own ones afterwards. That would be disingenuous, and even though this is something Miami almost did in 2010, their need to juggle the cap holds of Dwyane Wade and Udonis Haslem with all their external signings ensured they did not become an even more super team. Because of cap holds, your free agents eat into your cap room, forcing you to prioritize better.
If you waive a player, they are automatically renounced, and so will not have a cap hold. If a player signs with another NBA team, they also no longer have a cap hold to their former team. And if a player officially retires, then their free agent amount is removed too. However, players often do not formally retire until they are eligible for their NBA pension. Normally, when players "retire," they simply mean they are no longer looking for (or expecting unsolicited) offers of work. It does not mean they have filed retirement papers with the league. Very rarely does this happen until the player is pension-eligible - one recent example of when it did happen, Jason Williams with the Clippers, is a testament to why players do not do this. When he changed his mind and wanted to return, he had to wait. 'Retired' players, then, can still be cap holds.
Cap holds can stick around for years if the team remains over the salary cap in that time. Free agents are not automatically renounced after a certain period of time, and as such, cap holds can sit around for many a year. The Lakers' cap holds situation reflect this, with names like Ron Harper, John Salley and Karl Malone being on there - these players have long since left, but, as none of the aforementioned three methods for cap hold expugnation have applied to them, they remain to this day. In addition to these relics of a bygone era, all players currently on the roster who will become free agents will also have a cap hold. In short, then, the Lakers will have a lot of cap holds, a lot of money on their salary cap which is not being paid as salary but which impacts upon cap space ideations nonetheless.
The cap hold amounts that these free agents have varies, depending on a couple factors. It is calculated based on how much the salary in the final year of their last NBA contract was; the cap hold is a percentage of that salary, and is also dependent on what kind of free agent rights the team has on that player. Having Bird rights on a player, for example, makes their cap hold much higher than non-Bird rights does. An exact breakdown of how they are calculated is not needed here, but can be calculated via the relevant information at Larry Coon's CBA FAQ.
Whilst it is important to reaffirm that these are merely cap holds, not salaries actually paid to these players, the sheer amount of them nevertheless impresses upon us their importance. There follows last week's projection, including Kobe, of the Lakers's cap holds this upcoming summer.
Kobe Bryant - $31,976,495
Pau Gasol - $20,250,143
Steve Blake - $7,600,000
Jordan Hill - $6,650,000
Chris Kaman - $3,819,600
Jodie Meeks - $2,015,000
Jordan Farmar - $915,243
Xavier Henry - $915,243
Wesley Johnson - $915,243
Shawne Williams - $915,243
Nick Young (if he opts out) - $915,243
Ron Harper * - $2,860,000
Shammond Williams * - $2,100,000
Karl Malone * - $1,800,000
Andrew Goudelock * - $915,243
Horace Grant * - $915,243
Jim Jackson * - $915,243
Ira Newble * - $915,243
Theo Ratliff * - $915,243
Mitch Richmond * - $915,243
John Salley * - $915,243
Brian Shaw * - $915,243
Joe Smith * - $915,243
(* = not on the 2013/14 roster)
Kobe's cap hold of $31,976,495 is what his maximum salary would have been, equal to 105% of his salary this season. Regardless of the salary cap and a team's personal salary cap situation, a player's first season maximum salary in a new deal is never less than that. Signing him, however, negates any cap hold. Bryant will not be a free agent, and thus he will not have a cap hold. And with the $23.5 million he has signed for being less than the $32 million cap hold, signing him actually opens up a potential $8.5 million in cap room.
This is only of value if the Lakers choose to go that way. Irrespective of the pros and cons of giving Kobe the player $23.5 million (an important discussion outside of the remit of this piece but entirely within the remit of most other Kobe-extension piece), the fact that Kobe the entity received it is only important to cap space machinations if having cap room is the plan here.
It might be. There is plenty of scope to do it. Renouncing all the players not on this year's roster is not in any way problematic, and Chris Kaman was brought in on only a one year deal for a reason. Useful though they are, Blake and Hill need not be obstructions to the potential targeting of stars via free agency, and are expendable on this basis, and most of the others are too inexpensive to be burdensome. This then leaves Pau as the one final hinderance to this plan. And given that Pau is not the future, his sacrifice is entirely foreseeable. For the first time in a generation, the Lakers might be cap space players.
And therefore, as odd as it sounds, re-signing an old, injured and extremely expensive Kobe Bryant has therefore helped the future.