Warriors: In-Depth Look at the Salary cap and upcoming possibilities

The Golden State Warriors have entered their off-season. Fans now look to the draft (may the ping pong balls be ever in our favor) and free agency to bolster a roster that has good potential but also some missing pieces.

Of note, the following article: marcus thompson article/ Jason Kidd to warriors

speculates on the possibility of the warriors bringing in some veteran help. One common reason given in this article, (as well as others) regarding free agency and the warriors-- is that the warriors do not have cap room and therefore cannot sign free agents (with the exception of the MLE) for the upcoming season.

After the jump, we'll take a look at: nba salary cap, warriors place in team salaries, and the upcoming season with possible moves that the warriors could take to improve the team.

First off, we are going to take a look from a big picture of the salary cap and then narrow our focus onto the gswarriors.

Let's preface by saying these numbers are all derived from online sources. If any cap experts out there find anything amiss, just reply with a link so I can review and edit if need be. The NBA salary cap is prorated due to the shortened season but is the same as the 10-11 season amount.

The 2011-12 NBA Salary Cap is 58,044,000

The Warriors salary is 61,668,304 not including the amnesty of Charlie Bell's contract of 4,092,000 which brings the current years salary to 57, 576,304.

There are a variety of ways that teams can exceed the salary cap by signing its own players called exceptions. They include: midlevel, biannual, rookie, Larry Bird, Early Bird, non bird, minimum salary, traded player, and disabled player exceptions. These exceptions basically allow teams to sign and keep their own players by offering salaries that would exceed the team's salary cap. (there are specific grounds for each of the exceptions)

Now, let's change gears and talk about the luxury tax. This is a separate figure amount from the salary cap although obviously connected to the salary cap. The luxury tax kicks in when a team exceeds the soft salary cap far and above the level that normal exceptions included would take it.The luxury tax is determined by a complicated formula and changes each year with the salary cap figures.

Let's take the 2007 Knicks as an example..In the 2006, the NBA had a soft cap of 49,500,000.

The New York Knicks had a payroll of 124,000,000. The luxury tax line for that year was 61,700,000 (this figure is about 12 million above the salary cap to include exceptions). The knicks payroll exceeded the luxury tax line by an amount of 62,300,000. Not only is the number significant, but the tax is significant as well. The tax amount was dollar for dollar above the cap which the owner had to pay to the league in addition to payroll.

What about all the tax collected? All the teams that do not exceed the luxury tax split evenly all the luxury tax amounts collected. Therefore, there is financially at least great incentive to be below the luxury tax threshhold.

Now, back to our warriors. According to HoopsHype , the warriors are 17th in spending out of the 30 NBA teams.

The top ten teams on the list? Of the top ten teams, only one is not in the playoffs--the portland trailblazers. Of the bottom ten teams on the list, six of the ten teams are not in the playoffs.And get this, of the middle ten pack of teams (10-20 in salary spending, but under the luxury tax) , seven of the ten teams are not in the playoffs. (including the warriors) It would seem the middle of the pack, no man's land is at least this year the least effective way financially to make it to the playoffs..

It would seem by this disparity, that there is something to spending being a large factor in producing playoff teams. Intelligent spending and at times excessive. Why? Of the original top ten salaried teams that were mentioned, eight exceeded the luxury tax threshold.

So back to the warriors, it is frustrating to see/hear fans defending and bemoaning spending as if the owners weren't making enough millions..

It is misleading to say the warriors don't have cap room. Clearly, they do have cap room. As we learned, the soft cap number isn't exclusive---they can exceed that amount to sign players as long as they stay below the luxury tax threshhold...the luxury tax threshhold this year if unchanged from last was 70,307,000. The 2012-13 warriors salaries are currently at 55,402,742. That leaves ostensibly alot of room for the right types of moves that will help our team improve.

The biggest question then is what is the FO going to do...and.....

Why make the postseason, if the franchise can sit pretty and collect luxury tax dividends...? Currently, (and for the past Cohan era) that is what the Warriors did--turned a profit but did not produce a winning franchise. This miserly and inefficient way of thinking had consequences. As the warriors declined, even opportunities to sign top free agents declined as the warriors were not seen as viable destinations.This helped lead to the vicious cycle of losing, middle 1st round draft picks and instability that set in.

What do winning teams do financially in order to make success and keep it?

First, see the hoops hype top ten, winning teams win. This has many implications financially. TV contracts --assumed increases for each playoff game--are the largest financial gain for teams. Increased ticket sales and purchases (which can lead to increased prices), increased sales revenue of team merchandise, increased marketing revenue from local companies, and increased popularity and entrepreneurial opportunities. All of this makes the team more profitable, allowing them to spend more to keep top coaches, players, scouts, and other vital business and club personnel.

What does this mean for Joe Lacob and co.?

The warriors owner has publicly stated that he wants a winning team. He doesn't seem to be anything like the previous owner in terms of spending either (see david lee contract) That being said, being in the "middle of the pack" doesn't seem to cut it as far as producing a winner.

It seems, successful clubs hold onto star players by signing them to strong extensions, maneuvering with exceptions. Free agent acquisitions therefore, have to be a priority. In essence, its time for Lacob and company to put their money where their mouths are in an intelligent way to improve the team.

What moves might we see?

If the warriors are serious about winning now, we should see at least two solid free agent signings to help bolster the club. The areas they need to address are (G, F, and C) One of these positions might be helped by the draft, but expecting rookies even those ready (see Klay Thompson) takes time and this wouldn't line up with the win now philosophy stated by the ownership.

In addition, we should see resigning of some of our own free agents.(Rush, Dominic McGuire at top of the list)

Ideally, the club would like to be free of andris biedrin's contract (9mill. next 2 years). This would allow them to use the cap room to sign one or more productive players for the same salary and help the team now. The only way another team would take a chance on Biedrins' high cost/low production is if the warriors were to dangle draft picks in and maybe include another player. For instance, Andris and Dorell W. & a pick for Andre Iguadola.

There might be other teams interested in trading for one of our many picks in the 2012 draft. I realize with the playoffs, this might be a little early to ask but:

What teams would be willing to take on Andris' contract and a draft pick for a capable player in return....?

If not Andris, Richard Jefferson...(same two years, slightly higher contract)?

What other draft/free agent combinations or possibilities can help improve the team?

This FanPost is a submission from a member of the mighty Golden State of Mind community. While we're all here to throw up that W, these words do not necessarily reflect the views of the GSoM Crew. Still, chances are the preceding post is Unstoppable Baby!

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