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February 27, 2017

The Sixers (again) saved a lot of money at the NBA Trade Deadline

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Before we get started, consider this fair warning that today’s post will involve more concentration than normal. Got it? Good.

While the Sixers were Processing with numerous second-round picks and players picked up off the scrap heap from 2013 to 2016, there was quite a bit made of the inexpensive roster and the salary floor. How are they going to get to the floor? They got to get to the floor! Lord help us if we don’t reach that floor!

Eventually, because the Sixers were consistently beginning the season with a payroll far south of the floor (the minimum amount of money that each team is required to spend on players, which is 90 percent of the salary cap), we learned this was a non-issue. Head over the Larry Coon’s CBA FAQ and it very clearly says, “Teams with a team salary below the minimum are surcharged for their shortfall, with the money distributed among the players on that team.”

So, the penalty isn’t really a penalty at all. Teams don’t lose a draft pick or any other competitive advantage by failing they reach the floor. Heck, in the Sixers’ case, you could even argue that distributing the money amongst their players would be a sign of goodwill for the younger players on non-guaranteed deals. A reward for persevering through a season of getting their butts kicked, put bluntly.

The Sixers haven’t taken that path, though, and it’s wrong to say that the salary cap floor doesn’t matter at all. Thanks to a loophole in the CBA, teams can actually save money and pay less than the minimum salary by loading up on contracts later in the season. And now under two different front offices, the Sixers have saved a good bit of money for Joshua Harris and Co. over the past four years.

How is the possible? Well, there are two key points to understand:

1. In terms of the NBA salary cap, it’s all about how teams finish: The Sixers’ team salary is calculated at the end of the season.

2. When teams trade for a player midseason, they acquire their full cap hit but only what is left of their salary: So, when acquiring a player at the NBA Trade Deadline, teams are credited for the full year’s salary on the books despite only being on the hook for the games after the deadline.

This salary cap minutiae can easily slip under the radar at the deadline when there are franchise-altering trades (Michael Carter-Williams in 2015, Nerlens Noel last week), but it has been the Sixers’ M.O. for the past four seasons:

     • In 2014, they hit the floor at the deadline by acquiring Danny Granger’s $14 million contract in the Evan Turner trade with Indiana.

     • In 2015, they found the floor by trading for JaVale McGee’s $11.25 million salary at the deadline — What an amazing era of Sixers basketball that was — and then claiming Thomas Robinson’s $3.7 million off waivers, angering the Brooklyn Nets and their logo-protective fans in the process.

     • In 2016, Sonny Weems was the late waiver claim that helped the Sixers reach the floor.

Which brings us the 2016-17 season, so let’s look at how the Sixers were able to get to the floor last week. In terms of acquiring Tiago Splitter, the Sixers will get full credit for the $8.5 million but since they also sent out Ersan Ilyasova’s $8.4 million base salary that trade didn’t matter all that much in terms of savings. Forget we even mentioned it (after clicking on the above link, of course)!

The Noel trade proved to be the biggie, though. In exchange for Noel’s salary ($4,384,490), the Sixers added Andrew Bogut and Justin Anderson, who make a combined $12,541,187 but are only owed (roughly) $3,976,474 the rest of the season.

So, the Sixers added over $8 million in salary while only having to actually pay one-third of it. And wouldn’t you know? According to Basketball Insiders, the Sixers’ inclusive team salary is now $85,426,162, over the salary cap floor of $84.7 million. We take you for a like look of the Sixers ownership!

After doing some rough math (and that is important to note), I have the Sixers only spending around $79.9 million when the floor is at $84.7 million. That is in the ballpark of the $5.2 million that cap guru Albert Nahmad estimated the Sixers saved with the move, and to be clear, I think we should go with his number:

Time and again, the Sixers have saved money by exploiting the CBA in this manner. Is it smart? You bet. Is it also a little messed up from the players' standpoint? Yeah, it’s not difficult to make that case.

Anyway, the new CBA will apparently close this loophole (counting a player’s per-day salary instead of the cap hit at the end of the year) so this very well could be the last year that the Sixers get to do this type of salary cap gymnastics.


Follow Rich on Twitter: @rich_hofmann

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