Let’s Talk About the Salary Situation

It isn’t uncommon to hear a fan lament Ernie Grunfeld’s roster decisions due to the inflexibility they always seem to bring. That inflexibility, coupled with complaints of owner Ted Leonsis and his cheap ways (not moving for Harden, not buying out Rashard) combine to create quite the groan-worthy management situation. At points, it seems like Ernie could trade AJ Price for LeBron James and still somehow catch flak. In the defense of those of that mindset, his record with the Wizards does speak for itself.

However, if you take a peek at the current cap situation with some perspective, you’ll find the direction of the franchise looks precisely designed. It’s hard to believe the Wizards could have lucked in to what they project to have. But I digress; we’ll get to that. Let’s talk about the current salaries.

Since the draft, the Wizards have added four valuable and affordable players. Otto Porter, the third pick, will likely cost 120% of the rookie scale, $4,278,000 this year, and should see big minutes at the three. Glen Rice, a super intriguing small forward with a sweet stroke will cost a relative peasant’s sum of around $850k. Eric Maynor, signed to a two-year deal worth around $4 million, will get third guard duties backing up John Wall. Martell Webster, last year’s surprise and this year’s DC darling just today signed for four years at the full Mid-Level Exception (MLE) (roughly $5m a year) and will likely start at Small Forward to begin the season.

With the addition of these four players, the Wizards are sitting at roughly $69.5 million in current payroll, only $2.5m away from the scary proposition of being a taxpayer. Since the Wizards used the MLE, they are hard-capped at $4 million above the luxury threshold and hamstrung when it comes to spending more money this year. (Just how Leonsis would like it, some would say). The current situation for the next five years is detailed below:

So, pretty bad-looking in 2014. There is no flexibility to bring anyone else in aside from a minimum player (likely Garrett Temple) and, again, they cannot take salary on due to the hard-cap at $4 million above the tax threshold due to using the MLE. The Wizards are $10 million over the salary cap and will fight for a playoff spot… Not exactly what you want from such an expensive roster.

But alas, the future appears to be… dare I say… rosy. A quick look just one year ahead sees the cap hits from Emeka Okafor and Trevor Ariza, who have both proven to be serviceable players, come off the books. That’s $22.2 million right there. That’s a lot of money; dropping the Wizards’ projected salaries to $7.5 million under the cap.

But of course, that also assumes Okafor, Ariza, and Rice don’t come back, Tomas Satoransky stays in Spain (he probably will), and John Wall doesn’t get an extension. So, let’s be serious. John Wall is going to get some version of a max contract. I’m at peace with this and you should be too. I’m not sure just how much he will get, but let’s assume he receives the most he possibly can – 25% of next year’s cap with 7.5% raises. Poof; there goes most of that cap space. With a projected salary of over $15 million for John, the Wizards have a paltry $1.6 million remaining.

But this is where the apparent design comes in. Ernie Grunfeld can easily decide to rescind rights to Jan Vesely, Kevin Seraphin, Trevor Booker, and Chris Singleton, freeing up over $14 million and giving the Wizards enough money to give out a max contract in 2015. Wow. Ernie says the word and the Wizards become instant players in free agency next year. However, he has to make this decision before the beginning of the 2014 season because the deadline to pick up a rookie’s team option is the October 31st preceding the season preceding for which the option applies. (Example: Oct 31 before a player’s third season is the deadline to make a decision on the fourth-year team option for that player). The roster and cap hits would like as follows:

If these moves are made, the Wizards would have to fill five roster spots with $15.6 million in cap space and the Room Mid-Level Exception worth roughly $2.7 million. The Wizards would have room for a mini-max player and two role players before using the veteran’s minimum to fill out the last two roster spots. Of course, it’s more likely another max contract is saved for (wishful thinking alert) Bradley Beal or Porter, while the cap space created for 2015 is used to bring in a big, yet not max, free agent.

The possibility I’ve detailed above has to currently be on Ernie’s mind and it’s hard to believe that he hasn’t seen this exact moment coming for a year or two and planned accordingly. If that’s the case, he has just about absolved himself of all his earlier sins as far as I’m concerned. This is pretty fantastic cap management especially when you consider the contracts Grunfeld has been able to shed (Arenas, Blatche, Lewis). He has traded two untradeable contracts!

The most probable occurrence is that a few, but not all of those I’ve ruthlessly slashed from the Wizards’ roster are actually cut. Either way, the Wizards have the ability to flex up to over $15 million or down to only the MLE for the summer of 2014. That is quite the feat and gives the Wizards a legitimate chance to improve a team that might just already be competitive.