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  1. #1

    Nice Breakdown of how to handle Cole Aldrich's contract

    https://zonecoverage.com/2018/timber...-cole-aldrich/

    For the Minnesota Timberwolves, June 20 is decision time on Bloomington Jefferson grad Cole Aldrich.

    The 29-year-old is entering the third, and final, year of his $21.9 million deal. Left on that contract is $6.96 million for this season, with only $1.94 million of that salary guaranteed. Now is decision time because on June 20, the rest of the deal becomes fully-guaranteed. If the Wolves don’t want to pay him, now is the time to make the move.

    The assumption has long been that Aldrich will just be waived — saving $5 million — but given the way the financial landscape of the Wolves, and the league at large, is shaping up, the decision has become more complicated. Minnesota has four paths to take when it comes dealing with Aldrich and a few of those paths — if taken — could have a meaningful impact on the rest of the roster.

    The Four Paths For Cole Aldrich
    Extremely Unlikely: Guarantee Aldrich for ’18-19

    A crucial note on Aldrich’s deal is the timing of that June 20th guarantee date. June 21 is the NBA draft; the first day real transactions will start happening. Even if Aldrich’s productivity — as both a player and mentor — warranted $7 million in salary, the team would still need to consider parting ways with him to enter draft night with as much financial flexibility as possible.

    Given Minnesota’s financial bind, committing an additional $5 million would be all sorts of bizarre.

    Possible but unlikely: Waive Aldrich before June 20th

    The Wolves currently — with Aldrich’s $1.94 million on the books — have $110.23 million in guaranteed salary for next season.

    Player 2018-19 Salary
    Andrew Wiggins $25,250,000
    Jimmy Butler $20,445,779
    Jeff Teague $19,000,000
    Gorgui Dieng $15,170,787
    Taj Gibson $14,000,000
    KAT $7,839,435
    Cole Aldrich $6,956,021 ($1.94 million guaranteed)
    Jamal Crawford $4,544,400 (player option)
    Justin Patton $2,667,600
    Tyus Jones $2,444,053
    Kevin Martin $1,360,304 (waived and stretched)
    Nemanja Bjelica Restricted Free Agent
    Marcus Georges-Hunt Restricted Free Agent
    Derrick Rose Unrestricted Free Agent
    Aaron Brooks Unrestricted Free Agent
    Amile Jefferson Unrestricted Free Agent
    Anthony Brown Unrestricted Free Agent
    Guaranteed Total: $110,233,979
    That guaranteed total drops to $105.69 million if Jamal Crawford opts out of his $4.54 million, as has been reported. Unfortunately, Aldrich’s $1.94 million is relatively sunk and Kevin Martin’s $1.36 million is completely dead, for cap purposes.

    While Aldrich’s guaranteed salary is a small percentage of the team’s total salary, it is something the team is not married to and thus becomes a potential moving piece. Given the team’s salary total, what they decide to do with his salary is critical because it could be the difference between the Wolves crossing the league’s luxury tax line — currently projected to be $123 million.

    This tax line is important to note not only for the burden of paying the tax — and the near-certainty of paying the repeater tax next season — but it also affects whether or not the Wolves can use the full, non-taxpayer mid-level exception ($8.57 million) or the taxpayer mid-level exception ($5.45 million).

    Given that the Wolves are already over the salary cap, the mid-level exception is the team’s lone way to sign a free agent for over $3.36 million (the bi-annual exception). Having the additional spending power of the non-taxpayer MLE versus the taxpayer MLE could be the difference between signing a player of Kentavious Caldwell-Pope’s caliber versus Joe Harris’, for example.

    For these tax-related reasons, simply eating the $1.94 million of Aldrich’s deal does not seem like the most likely path.

    More Likely: Waive and Stretch Aldrich’s Contract

    To lessen the blow of Aldrich’s contract, the Wolves can use the Stretch provision. If Aldrich’s contract is stretched, the salary is evenly spread over three seasons — $648,000 per year, rather than just a lump sum.

    But even that $1.3 million difference might not be enough to duck the tax.

    Additionally, having $648k on the books for 2019-20 and 2020-21 is burdensome. Because the Wolves are likely to exceed the luxury tax line those two seasons, they become subject to the punitive realities of the repeater tax.

    For example, if the Wolves are over the luxury tax line by $20 million in 2020-21 — a possibility if they keep Andrew Wiggins, Karl-Anthony Towns and Jimmy Butler on max or near-max deals — they begin paying $4.75 and in tax for every dollar beyond that $20 million threshold. Functionally, in this reality, the Wolves would be paying an additional $3 million ($648,000 * 4.75) in tax for Aldrich’s waived and stretched contract, provided they were also in the tax in 2019-20 (likely). That would be a tough pill to swallow.

    The safest option, not only for avoiding a hefty tax bill but for creating flexibility on draft night next Thursday, is to completely remove Aldrich’s contract this week. And the only way to do that is through a trade.

    Likely But Trades Are Tough: Trade Aldrich Before June 20

    A team, of course, isn’t going to just absorb Aldrich’s contract for free. Whoever was to take on his money would be pressed with the same questions of waive or waive and stretch. There may, however, be a team less pinched for cash than Minnesota who can live with some dead money, so long as an asset is attached to Aldrich, as penance.

    In a “normal” offseason, ditching $2 million in salary for a future second-round pick would be a fairly easy task but this summer is not going to be normal.

    Entering the draft, there will be nine teams with cap space. This limits the width of the net the Wolves can cast for Aldrich trade partners, as they can only completely ditch his money to a team with space. That list of nine teams shrinks with four of them (Los Angeles Lakers, Philadelphia, Indiana, Utah) unlikely to sacrifice even $2 million — as that could cripple their ability to offer a max contract.

    So the list of realistic trade partners is five: Chicago, Atlanta, Sacramento, Dallas, Brooklyn. While those teams could be struck with a confidence that says “we can attract a max player” and turn down dealing with the Wolves, for the purpose of this column, let’s pretend they’re intrigued.

    Potential Trade Partners

    It’s hard to say if the Wolves second-round pick in the draft (48th overall) would be enough penance for any team to absorb Aldrich. What we do know is that Chicago doesn’t give two you-know-whats about second-round picks — last summer they traded Jordan Bell (the 38th pick in the draft) for $3.5 million in cash.

    That looks very silly right about now but a reality when dealing with Chicago is recognizing their frugality. For the thought exercise of pursuing a deal with them, the Wolves probably would need to up the ante to a future first. And that, by itself, is just way too much for $1.94 million in cap relief.

    Atlanta Hawks

    Dealing with Atlanta may present a workable middle ground to the Chicago option.

    The Hawks have a glut of future seconds coming in the pipeline, so they may be similarly unenthused by the 48th pick attached to Aldrich. However, a future first would be appealing and they could lessen the blow by throwing a second back at the Wolves. (Negotiation!)

    For example, the Wolves could send a future first — as early as 2020 — and Aldrich to Atlanta for the 34th pick in this draft. Trading a first for a second sounds bad but it has advantages for the Wolves beyond the shedding of Aldrich.

    The key additional advantage would be picking up a minimum-level contract in a second-round pick. One way or the other, the Wolves are going to need to fill the end of their roster out with minimum level contracts, given their financial binding.

    Theoretically, the Wolves would rather have a minimum salary rookie — that could develop — than another Aaron Brooks-type experience.

    Here are who a couple of the top draft sites have going 34th:

    The Ringer: Hamidou Diallo — 6’6″ shooting guard
    NBADraft.net: Keita Bates-Diop — 6’8″ forward
    ESPN: Anfernee Simmons — 6’3″ shooting guard
    Sacramento Kings

    With Sacramento, a similar path — a future first and Aldrich for a 2018 second — could be taken. The Kings hold the 37th pick on June 21.

    Or… because it’s Sacramento, things could get weird. A deal could be put together that blows things out a little bit and real — already on the roster — assets could become involved. The Kings have a list of players on rookie scale deals that hold similar value to an early-second pick and could thus be plugged into the same construct of a deal. The names: Skal Labissiere, Willie Cauley-Stein, Frank Mason, Harry Giles.

    Cauley-Stein (a pure center) and Mason (a pure point guard) don’t make much sense for the Wolves, from a roster construction standpoint. And Giles is scheduled to make $2.2 million next season, so, if the (main) goal is to cut costs, this doesn’t make sense in a swap for Aldrich. Labissiere, however, is only on the books for $1.54 million next season.

    Trading a future first and Aldrich for Labissiere not only creates a little bit of financial wiggle room but lands a big who has shown the physical potential — albeit not statistically — to stretch the floor. If Bjelica walks this offseason, that is a need.

    Labissiere was the 28th overall selection in the 2016 draft. He is 22 years-old, stands 6-foot-11 and possesses a 7’0″ wingspan.

    Dallas Mavericks

    Of the bunch, Dallas — given the presence of Dirk Nowitzki and just some franchise pedigree — seems the least likely to just eat money for future benefits. If this is true, some creativity — more players — need to go into the mix for a trade with Minnesota.

    Dirk is one of the only players under Dallas’ control that is, well, big. Once free agency hits, Nerlens Noel is going to be gone faster than you can say ketchup and mustard and the other rotation bigs, Salah Mejri and Maxi Kleber, are a free agent or on a non-guaranteed deal.

    This could open up the door to a deal that centers on Gorgui Dieng and Wesley Matthews, but that would add more money onto the Wolves books for next season and likely is something even Dallas would not be interested in — unless Minnesota attached multiple firsts.

    Justin Patton might be a different story.

    Patton is very Noel-ish in his maturity level and injury history but also holds the potential of becoming an impactful modern-day big. Dallas could offer him minutes next season — something the Wolves, with Towns, will not be able to do.

    The Mavs would have to have some big summer plans to turn down Aldrich and Patton for their second-round pick in this draft (33rd overall). Again, the Wolves should be craving seconds due to the minimum salary attached; and moving — both — Aldrich and Patton could potentially solve their luxury tax problems this summer.

    Without Aldrich, Patton, and Crawford (officially) opting out, the Wolves guaranteed salary total drops to $103.02 million. With this, a full $8.57 mid-level deal would become a possibility. If the Wolves want to use the MLE to it’s fullest capacity, they are going to have to make sacrifices to delete salary. Patton may need to fall on that sword.

    Brooklyn Nets

    The appeal of playing in Brooklyn is not what it once was. The re-build there is going to be a long one. And for a team to take on Dieng’s salary, that would need to be their operating mindset. However, Dieng’s deal is so tough to move — due to its length — that it will likely require another negative contract being sent back to Minnesota in return.

    It stands to reason that the Nets would consider taking on Dieng and Aldrich’s contracts for DeMarre Carroll — who is set to make $15.4 million this year before becoming an unrestricted free agent next summer. The downside here is that the Wolves would also likely need to attach their first-round pick in this draft for Brooklyn to be enticed — and even that might not do it.

    While it would hurt to lose the 20th pick in this draft, the benefit of deleting Aldrich’s $2 million this year and all of Dieng’s $50 million remaining is worth it — so long as Carroll can provide some depth (and defense) on the wing.

    While Aldrich’s $1.94 million of salary feels like a small obstacle it is a crucial domino to the Wolves’ summer. Not only will the path they choose affect free agency and Draft Day pursuits but if they pursue a trade, that path could instigate a shaking up of the bench rotation for next season.

    Being a capped out team requires creative decision making and the Cole Aldrich decision is the first brushstroke for Tom Thibodeau and the Wolves’ front office this summer.


  2. #2
    I had just been assuming the Wolves should waive Aldrich to save money, but by this breakdown, that doesn't seem like our best course of action. The option of using the full MLE without triggering the luxury tax this year could be huge if we are going to keep Butler longer term to the small but real savings of shedding Aldrich's smaller guarantee is a smart play.

    There are several 3 and D type wings, that it's a fairly decent bet that one could fall into the early 2nd round. A deal where we're trading down from 20 into the early 2nd would lower payroll and allow us to use the full MLE.

    The Atlanta option of a future 1st and Aldrich for #34 is somewhat interesting, although pick debt does limit future trades. #20 and #34 would allow us to add cheap depth in a draft that looks deep in lower tier wings who can shoot a bit. The problem here is that if Butler doesn't stay that pick could linger a LONG time if we protect it properly. If Butler leaves after next year and we regress out of the playoffs then we've got a situation where we're waiting out lotto pick protections. If Butler stays then it's a good trade IMO as we're picking in the 20s in 2020 (hopefully).


  3. #3
    I can't quite make my head see Thibs handling this kind of diversity of options. Somehow anything beyond A+B=C seems out of his grasp. ButI know this has no basis in fact and he may be a math wiz.


  4. #4
    Join Date
    Dec 2004
    Posts
    18,220
    Hate the idea of giving up a first just to save a few dollars of luxury tax. Awful use of resources.
    Inching back towards the wagon...slowly...


  5. #5
    Quote Originally Posted by spiker View Post
    I can't quite make my head see Thibs handling this kind of diversity of options. Somehow anything beyond A+B=C seems out of his grasp. ButI know this has no basis in fact and he may be a math wiz.
    Yea, this is something we have to remember. Thibs is kind of the anti-Kahn to me as a GM. Kahn seemed to do things to try to prove he was smarter than everyone even if they were dumb moves by the time everything was said and done. I don't think Thibs spends a lot of time on how to really pull off any series of moves beyond A to B. A to B to C seems like a really tough thing for us to accomplish.


  6. #6
    Quote Originally Posted by The Country Club View Post
    Hate the idea of giving up a first just to save a few dollars of luxury tax. Awful use of resources.
    In a perfect world I wholeheartedly agree, but it's not. If we are going to keep Butler we are looking at the repeater tax and being under this year could be huge as far as avoiding prohibitive tax bills in future years.


  7. #7
    Join Date
    Dec 2004
    Posts
    18,220
    Quote Originally Posted by dschroeder01 View Post
    In a perfect world I wholeheartedly agree, but it's not. If we are going to keep Butler we are looking at the repeater tax and being under this year could be huge as far as avoiding prohibitive tax bills in future years.
    If I can pay a guy who, if the Wolves do it right (lol), a marginal starter in a couple of years $1.5, $1.8, and $2.1 mil a year...you do it. Even if there's tax implications.

    Trading picks (unless you get a pick coming back) simply to undo a f**k up is an even worse strategy than giving out bad contracts because a pick is a low risk deal. You're only out a few million (plus tax, a few mil more).

    We're in tax hell because of giving out one really, really bad contract and a second bad contract...trying to get out of a mistake by selling cheap value is just digging our hole deeper. We need to suck it up and take the tax medicine while trying to build some youth.
    Inching back towards the wagon...slowly...



 

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