Monday Mavs Donuts: The Ibaka Breakdown
DONUT 1: The Ibaka Breakdown ...
Dallas Mavericks fans hoping for some sort of front-office-related collapse in OKC are not getting their wish.
Ibaka's deal is reportedly four years and $48 mil. With max raises, that would make the contract look something like:
DONUT 2: The immediate consequences ...
On the court? That's obvious. There are big decisions to make in the future, but the Thunder has in KD arguably the best player in the league, a budding superstar in Westbrook, the Sixth Man in Harden and the blocks leader in Ibaka ... and they are all kids.
"At 23 years old (at season's start), we really do expect his best basketball to be in front of him," GM Sam Presti said of Ibaka's future.
Off the court? OKC has no tax issue this season as the extension doesn't start until next.
DONUT 3: Future tax issues? ...
Presti makes it sound like there is no issue precluding OKC from losing Harden in free agency next year.
"We very much value him," Presti said. "We want him to be a part of our organization moving forward. We're excited that he's a member of the Thunder and we're hopeful that he'll be with us for years moving forward."
With a max deal for Harden starting at about $14 million (the actual number will be unknown until the middle of July next summer), my guess is that it will take one starting at about $12-13 million to get him locked up with an early extension too. Assuming OKC does that, tax problems - or problems with talent level of the surrounding roster - for the Thunder will eventually arise.
But I'm guessing they could find some way to stave them off until the 2014-15 season. (I'm penciling in Harden at 12, 13, 14, 15 in year-by-year salary.)
And what happens if they do just that?
DONUT 4: Spurs-style ...
Assuming they are able to keep Harden from hitting free agency and getting max offers they would be forced to match in order to keep him (maybe a dangerous assumption) ... The Thunder will probably have to go to the Spurs approach, with a core of 3-4 key players ... and then everyone else gets the leftovers. Durant, Westbrook, Ibaka, Harden. Those four will cost them something like:
2013-14 55.5 guesstimated tax line 73.0
2014-15 59.5 guesstimated tax line 76.0
2015-16 63.5 guesstimated tax line 79.0
2016-17 67.5 guesstimated tax line 82.0
And then it gets tight ...
The alternative is to let Harden walk, which would probably free up enough extra money to allow them to keep everything else intact. I don't expect that to happen, but it's certainly possible.
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DONUT 6: The leftovers ...
It could be a very top-heavy OKC roster in the future with interesting players being lost when it comes time for the next deal. Maynor, Collison, Perkins, Sefolosha ... but in theory, they might be able to selectively keep side talent too, at the right price.
So how would it work? Here's one guess.
In the summer of 2013, assuming they sign Harden, let's start with their core four players of Durant, Westbrook, Harden, and Ibaka. We'll also pencil in $8M to cover the cost for the last 7 roster slots (8-15), figuring there will be some guys on rookie scale, some minimum salary veterans, and whatnot. That puts their salary at:
2013-14 63.5 guesstimated tax line 73.0
2014-15 67.5 guesstimated tax line 76.0
2015-16 71.5 guesstimated tax line 79.0
2016-17 75.5 guesstimated tax line 82.0
In 2013, that's so tight that here's a good chance Maynor (free agency) and Perkins (lack of room for his $9M contract) might have to go. And that leaves OKC the following tax-free spending room for slots 5, 6, and 7 to complement their core of Durant, Westbrook, Ibaka, Harden:
2013-14 9.5 spending room for slots 5, 6, and 7
2014-15 8.5 spending room for slots 5, 6, and 7
2015-16 7.5 spending room for slots 5, 6, and 7
2016-17 6.5 spending room for slots 5, 6, and 7
Yes, it will be tight. At some point they'll almost certainly have to pay tax, along with lots of roster-squeezing and some talent getting away too. It has to be mentioned that OKC owner Clay Bennett is a billionaire, so he can certainly afford to pay tax - and has even said he would be willing to pay some tax to keep a winner together. But, given the small market of OKC and the punitive financial impact of the NBA's luxury tax beginning next summer, our best guess is that he'll want to squeeze the payroll as much as possible and limit that tax.
DONUT 7: Why did Ibaka do this deal now? ...
Could he have gotten more next summer? Maybe, but logically, Ibaka: now avoids "what-if'' headaches of next summer ... prioritized his fit in OKC, a very Spurs-like stance ... feels like this contract is lucrative enough and not worth taking any "risk'' while chasing more dollars. No matter what happens this season, either on the court or through possible injury, Ibaka has locked in a guaranteed $48M ahead. He and his family should now be set for life.
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DONUT 10: What does this mean to Dallas? ...
In the sense that OKC is set up to be Spurs-like, it's daunting ... in the same way that the Spurs have been daunting for the last decade. But "daunting'' isn't "unbeatable.'' The Mavs can continue to hope that OKC slips somewhere while everyone is climbing the West mountain. Just because Ibaka is locked in for the climb doesn't mean the peak's been achieved.
Certainly, the Mavs need to stay competitive in the talent evaluation battles for non-stars on the roster, a competition they've done well in while battling the Spurs (in terms of trades and street free agency if not in the draft). At this moment, there are only small steps to be taken. But -- including the hiring of Carlisle's top assistant (apparently to be veteran head man Jim O'Brien) -- the "small steps'' cannot be missteps.
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DONUT 12: The Final Word ...
The OKC alternative to dealing with the tax ramifications linked with survival in a "small market'' is to let Harden walk. That would probably free up enough extra money to allow them to keep everything else intact and to spend on supporting cast members. I don't expect that to happen, and I doubt Mavs management is hanging its hat on that hope, either.
OKC got good talent by being bad, and then hit home run after home run with premier picks in the draft ... and then created a culture that's made those guys want to stay there. The Mavs can't worry about how OKC is doing its business; they have enough concerns of their own.