In that other Lee thread, I was challenged to find a way to keep Lee at $10 million while also keeping our 2010 plans intact. Fortunately, I had 15 minutes to kill today so I took out a spreadsheet and did some 5th grade math. Three beers later, I had at least something that looked like a plan. Now, I should preface this whole thing by saying that resigning Lee to $10 million a year is not my first option. I have simply said in other threads that I'd rather resign him to $10 million a year instead of letting him walk for nothing (and I'm sticking to my guns). Personally, I think the $8-$9 million range is fair for Lee and I'd like to get him back around that price.

I should mention for those of you who read Alan Hahn's "The 2010 Outlook" blog 3 weeks ago that my numbers are more accurate because he was off on the rooks' salaries (although I should say, he did a very good job estimating it all and he even claimed his numbers wouldn't be perfect). With that said, lets take a look at our finances for that pivotal 2010-2011 season.

Eddy Curry - $11,276,863
Jared Jeffries - $6,883,400
Danilo Gallinari - $3,304,560
Jordan Hill - $2,669,520
Wilson Chandler - $2,130,481
Toney Douglas - $1,071,000

Total - $27,335,824

Ok. Now here is the fun part. Projecting the 2010 salary cap isn't exactly easy since we don't know what the league will project as the BRI (Basketball Related Income) for that 2010 season. Many have said that the cap can be as low as $50 million for that season. Personally, I do not think the cap will fall over $7 million in only one season. That is a -15% shift and it would represent the biggest single year change in the cap in awhile (maybe even ever?). Plus, the economist in me sees the economy leveling out a bit and I don't think that BRI consequently, will be as low as advertised. Just to be safe, we'll do the doomsday scenario though and project the 2010 cap at $50 million.

Now if the cap is at $50 million, the max for LeBron or Wade for that matter, will be 30% of the cap or $15,000,000 in that 1st season (the only number we care about for now). So add that $15,000,000 to the total from above ($27,335,824 ) and that comes out to $42,335,824. That means as of right now, we have $7,664,176 to spend on Lee in 2010. If we gave Lee a 6 year deal with that money (with 10.5% maximum raises), it would look something like this:

Year 1- $6,900,000
Year 2- $7,624,500
Year 3- $8,349,000
Year 4- $9,073,500
Year 5- $9,798,000
Year 6- $10,522,500

Total - $52,267,500

That comes out to an average of $8.7 million a year (close to that $9 million price point I think Lee is worth). It looks like that pick we bought from LA to draft Douglas could cost us Lee because we could really use that extra $1 million right now. However, if Walsh offers Lee something like this now, I would have to think that Lee seriously considers it given the limited options he has.

Throughout the off-season I've said that I think Lee comes back at $9 million a year with a player option after 2-3 seasons. Now looking at the numbers, it seems like that is the most likely scenario.

That is too easy though, lets try getting creative now. I'm no capologist, but I think the CBA presents opportunities to those that take the time to understand it. I should preface the rest of my post by saying that I don't have the actual CBA in front of me and because of that, I can't tell you that I'm 100% sure this next idea would work (my reference is the Larry Coon FAQ from Realgm).

But anyway, here is one idea.

Performance incentives

These bad boys can be built into contracts and are classified as either "likely to be achieved" or "not likely to be achieved." The incentives are only included in team salary if they are "likely to be achieved" The league office determines what is likely and what is not likely to be achieved. It should also be noted that in the first year of a contract the base salary, likely bonuses and unlikely bonuses must all fit within the salary cap or exception.

Now, I'm not sure if performance incentives must be applied to the whole length of the contract but if they don't have to be, why not put some incentives that Lee can achieve in that 1st year? For example, one incentive can be for Lee to average over 9 rebounds a game (something that is obviously likely to be achieved). If an incentive like that can be built into the contract at 25% of Lee's first season salary (we'll assume its the $6.9 million from above), then guess what, that gives Lee an extra $1.725 million and pushes his total earnings to $54 million, which pushes him to that magical $9 million a year mark.

The only other way we can really get Lee more money is to trade Jeffries or Curry. I do believe Donnie can get this done somehow, especially if there was interest at the deadline in a Nate + Jeffries package. If Jeffries can be traded, we have an extra $6.9 million to play with. What can be done with that? Lets see.

Without Jeffries, we can give Lee more money. Here is what one possible deal would look like:

Year 1: $8,000,000
Year 2: $8,840,000
Year 3: $9,680,000
Year 4: $10,520,000
Year 5: $11,360,000
Year 6: $12,200,000

Total = $60,600,000

This would give Lee his $10 million a year so I'm going to assume he would accept this deal. But why stop there? There might be a way to get Lee and Sessions if we trade Jeffries. Instead of the deal above, we could probably land Lee at a similar deal with a first year salary of $7.4 million and a total of $56 million over 6 years, which comes out to $9.3 million each season (still a pretty good deal for David). And here is what a possible Sessions deal could look like (at the full MLE):

Year 1: $5,840,000
Year 2: $6,307,200
Year 3: $6,774,400
Year 4: $7,241,600
Year 5: $7,708,800

Total: $33,872,000

These two deals for Lee and Sessions would give our team a payroll of $34.9 million heading into that 2010 off-season, just enough to max out Wade or LeBron at $15 million.

If I'm Donnie though, I don't stop there because I want to make sure Milwaukee doesn't match my offer for Sesssions. Accordingly, I use a signing bonus. This isn't something new and we've actually already seen Prickard...I mean Pritchard use this to sign Millsap to an offer sheet (which Utah obviously matched).

The beauty of the bonus is that it allows us to pay Sessions a large chunk of cash in that 1st year. The maximum amount for a bonus is 20% of the total salary. If we give Sessions the full MLE at 5 years, that means the 20% bonus comes to $6,774,000. This bonus must be allocated to each season of that MLE deal. In order to fit that first year salary plus the portion of the signing bonus allocated to the first season within the MLE, the first year salary actually has to be reduced. The spread would basically look like this:

Year 1: Base Salary - $4,485,120 Signing Bonus - $1,354,880
Year 2: $4,952,320 $1,354,880
Year 3: $5,419,520 $1,354,880
Year 4: $5,886,720 $1,354,880
Year 5: $6,353,920 $1,354,880
Totals - $27,097,600 $6,774,400


What this does is it gives Sessions his largest payout in the first year. For that 1st season, he would get that $4,485,120 base salary in addition to that entire $6.7 million bonus which gives him a total payout of $11,259,520 for that 1st year. If Milwaukee is iffy about matching Sessions to begin with, I doubt they would match if they also had to give him $11 million in his first season when they have 2 PGs who they want to get playing time.

Now, let me emphasize, this does nothing to our cap because Sessions is essentially treated as if he doesn't receive a bonus. So basically, his salary would count against the cap like a normal MLE contract. But like I said, it forces Milwaukee to make a large financial commitment to Sessions in that 1st year and I can't see a small market team like them doing that.

If that rumored Nate + Jeffries to Sac-Town trade was true, Donnie may have made a mistake by not completing it. It really would have given us some flexibility this off-season. As has been demonstrated though, it looks like we will have to be creative to bring back Lee (if that is what we want to do) while also having the money to be players in Free Agency next year. The point of this post however, is that Donnie can find ways to keep Lee while also having the cash available to make a splash in that 2010 off-season. We can have it both ways. Lets see what Donnie chooses to do.


Note - As mentioned above, Larry Coon's FAQ was used as a reference here so I claim no credit for any of the CBA rules that I explained here.












[Edited by - s3231 on 07-25-2009 8:54 PM]

[Edited by - s3231 on 07-26-2009 1:55 PM]

Lee is worth what the market dictates. Objects are worth what they can be sold for. His services can't be sold for more than the MLE, and that's all I'd offer him. Or he can sign a 1 year contract with us and we trade him. I'm not scared about pissing him off and having him walk for nothing. He and his agent don't care about our feelings (the fans' or management's) I'd be re-signing him with the goal of trading him. Or if we want to keep him, 12 months is a long time and he'd get over any anger he had, especially if he saw that staying in NY meant teaming up with Lebron or whoever we end up signing. I think the 4 yr $32 mil offer was a mistake and we should have pursued an s & t for Milsap if we were gonna spend that much.

[Edited by - bonn1997 on 07-25-2009 8:30 PM]

Posted by EwingsGlass:

Nobody ever really responds to these posts...

See Here:

http://www.ultimateknicks.com/forum/topic.asp?t=31958

Basically, if you want to keep Lee, the 2010 plan becomes the 2010 and 2011 plan. We might actually end up in a better position overall this way, but it really depends on whether we can walk away with a prospect or two from a sign and trade.

Sorry buddy, I'm not too active during the week but if I had seen this post, I definitely would have replied (and I liked your analysis).

I agree with you that if we keep Lee, we basically have to wait on Curry to expire before we can try to get a second maxed out free agent.

While you mentioned the cap going up to $60 million as a possibility, I don't see that happening unfortunately. I do think that the economy will pick up a little bit but I still see the cap going down or staying around the same at best. If Walsh gets creative though (like he did with the Mobley situation), then I think we'll be ok either way.

thanks for putting the work into this post. very informative. you too, EwingsGlass. sorry people don't seem to respond.

Thanks for crunching the numbers out...did it once but never saved it. Will bookmark this for reference.

sorry s3231, just browsed over this thread cuz we've all crunched the #'s concerning the 2010 cap so many times at this point i just didn't think anything new would be brought up... but you put it all together very nicely, so props to u.

Thanks s3231! (I had to get in on it.)

Nicely done.
And good to see fans to take common sense approach.
People get to personal about Lee situation.
Fortunately Donny saw it all and I am sure he will make the best decision for the team.

This was definitely nicely done!

Aren't we given a cap hold for all the empty roster slots at the NBA min as well?