Warriors could face up to $77.5 million luxury tax with new salary cap projections

With new NBA salary cap projections released, the Golden State Warriors could face a heightened luxury tax.

The NBA salary cap projections could have stifling consequences on the Golden State Warriors.

The league released projections for salary cap and luxury tax for the 2020-21 season to teams Thursday, according to ESPN’s Adrian Wojnarowski and Bobby Marks.

With a lower salary cap and luxury tax than expected, the Warriors could be on the hook for a tax payment as high as $77.5 million, about $12 million more than what was expected.

The salary cap is expected to be $115 million, according to Wojnarowski. That would be an increase from the 2019-20 season, but not as much as the previously-predicted $116 million.

The luxury tax is projected to be $139 million, Wojnarowski reported.

As the roster currently stands, the Warriors’ 2020-21 payroll will be $147.87 million, according to Basketball Reference.

The luxury tax projection will be $139M, per sources. https://t.co/3jBS3llJqG

— Adrian Wojnarowski (@wojespn) January 30, 2020

Four players on the Warriors roster are set to receive more than $20 million: Draymond Green’s extension will start at $22 million, D’Angelo Russell will be paid more than $28 million, Klay Thompson $35 million and Stephen Curry $40 million.

The Warriors will also likely add a high first-round draft pick to the sheet. A top-five pick would result in a cap hit ranging from $6.8 million to $10.73 million.

Golden State has a $5.9 million exception to use on a free agent, according to Wojnarowski and Marks.

If the Warriors use the entire taxpayer mid-level exception, their luxury tax bill could range from $77.5M if they get the No. 1 pick to as low as $61M if they get the No. 5 pick.

The easiest way to get under the luxury tax would be to trade Russell. A highly-coveted free agent this past offseason, he will have three years left for about $30 million per year after this season.

Moving his contract would put Golden State right near the luxury line, depending on other roster changes, and allow them to move manageable contracts to clear the rest of the way if needed.

But the Warriors have not been shy about exceeding the luxury tax in recent years. If the front office feels the team can still compete for a title when Curry and Thompson return from injury, it may pay the price again.

USA TODAY Sports Media Group salary cap expert Yossi Gozlan contributed research to this report.

Hard Cap Update: How Damion Lee and Marquese Chriss fit the Warriors

Now the Warriors have a pathway to convert Lee and potentially Chriss later in the season without needing to trade anybody.

According to multiple reports the Warriors have agreed to re-sign forward Marquese Chriss to a two-way contract. Chriss was waived last week to avoid having his contract becoming fully guaranteed for the rest of the season. The move saved the Warriors $861,760 against the hard cap, or apron.

January 15 is the deadline to sign players to two-way contracts. This will prompt several teams to convert their two-way players to standard contracts so they can add new players to those newly available two-way slots.

Both two-way slots on the Warriors roster are currently occupied by Damion Lee and Ky Bowman. It was reported last week by Adrian Wojnarowski of ESPN that the Warriors plan on converting Lee onto the regular-season roster. It hasn’t happened yet, but they will presumably do so by the end of January 15 in order to free up a two-way slot for Chriss.

Lee’s minimum salary decreases every day by $9,156. Had they signed him to a prorated minimum contract on January 7 when Wojnarowski first reported the Warriors plan to convert him, his cap hit would’ve been $915,573. That would’ve left them $321,112 below the apron.

Warriors cap sheet if they sign Damion Lee to a prorated minimum contract on January 15. — Warriors cap sheet if they sign Damion Lee to a prorated minimum contract and Marquese Chriss to a two-way contract on January 15.

By signing Lee to a prorated minimum contract on January 15, his cap hit will be $842,327. This would leave the Warriors $394,358 below the apron, a $73,246 higher cushion versus converting him on January 7.

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The significance of those savings is that it allows the Warriors to potentially convert Chriss onto the regular-season roster once his prorated 24-day two-way clock runs out without needing to trade anyone. According to Anthony Slater of The Athletic, Chriss is likely to earn the Warriors’ final roster spot.

There had been several reports that the Warriors were looking to trade a role player in order to create sufficient space below the apron to convert Lee. Now the Warriors have a pathway to convert Lee and potentially Chriss later in the season without needing to trade anybody.

If the Warriors do not make a salary-reducing trade, the earliest they can convert Chriss onto the regular-season roster would be March 4, assuming he signs a prorated minimum deal for the rest of the season. If the Warriors want to sign him to a multi-year deal, the earliest he could sign it is on March 6.

It is unclear what this means for Bowman, who as of January 6 only had six days remaining on his two-way clock. It is still possible that the Warriors could make a trade that would give them more apron space to convert Bowman as well. Otherwise, he must remain with the Santa Cruz Warriors.

What’s next for the hard cap after Warriors waive Marquese Chriss?

The Warriors are now $1,236,685 below the apron, leaving them plenty of space to sign one of Damion Lee or Ky Bowman to a standard contract.

The Warriors waived forward Marquese Chriss after playing 37 games for them. The move comes ahead of the January 10 deadline to waive players on non-guaranteed contracts before they become fully guaranteed.

The Warriors were roughly $375,000 below the $138.928 million hard cap, or apron, throughout the season. Chriss’s contract was non-guaranteed and added $9,485 daily to the Warriors payroll. By waiving him on January 7, Chriss leaves the Warriors with a $758,804 dead cap hit.

Warriors cap sheet after waiving Marquese Chriss

The Warriors are now $1,236,685 below the apron, leaving them plenty of space to sign one of Damion Lee or Ky Bowman to a standard contract.

According to Adrian Wojnarowski of ESPN, the Warriors intend on converting Lee for now, who has run out his 45-day two-way clock.

Warriors potential cap sheet if they sign Damion Lee to a prorated minimum salary on January 7, 2020.

If Lee is signed on January 7, his pro-rated minimum salary would be $915,573. This would put the Warriors $321,112 below the apron. They would have to trade a minimum-salaried player, such as Alec Burks or Glenn Robinson III, to clear enough room to sign Bowman to his minimum salary.

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The Warriors still have $1.7 million remaining from their taxpayer mid-level exception. There is a strong possibility that the Warriors use part of the exception to sign Lee in order to give him at least a three-year contract. By using the exception, the Warriors could also pay Lee a little more than the minimum salary.

How the Warriors can convert Damion Lee and Ky Bowman today

Starting today (December 30th), the Warriors can trade Burks for salary relief and be able to convert both Lee and Bowman within the apron.

Two-way players Damion Lee and Ky Bowman have been pleasant surprises for the Warriors this season and arguably deserve roster spots.

In December, Lee is averaging 14.9 points and 7.1 rebounds per game off 45% shooting and 89% from the free-throw line, according to Basketball-Reference. He has started in the last 7 games in which the Warriors have gone 4-3, including a 4 game winning streak.

Bowman has consistently been in the Warriors rotation averaging 22.8 minutes per game. He’s been heavily relied on earlier in the season while the Warriors were strung with injuries. He’s averaging 12.6 points, 4.3 rebounds, and 4.7 assists per-36 minutes, according to Basketball-Reference.

Both players are on two-way contracts, meaning they can only spend up to 45 days with the Warriors. Once they run out their days-of-service (DOS) clock, they must be converted to regular NBA contracts that would have them count against the Warriors salary cap if they are to continue with the team. Otherwise, they must return to the Santa Cruz Warriors, but can still be converted later.

As of 12/6- Lee only had 18 but only 12 that applied to the 45

— Bobby Marks (@BobbyMarks42) December 25, 2019

There is no publicly available resource available to track the DOS of two-way players. According to Bobby Marks, Lee has spent 12 of his 45 DOS with the Warriors as of December 6. While one could mathematically conclude that Lee is at his 36^th DOS as of December 30^th, there is a good chance that isn’t the correct number. It is tough to estimate how many DOS Bowman has left, but he could have less since he has played more games for the Warriors than Lee has this season.

The Warriors cannot convert either player with the way the Warriors roster currently stands because are hard-capped. They subjected themselves to the hard cap after they sign-and-traded for D’Angelo Russell. They are currently just $374,925 below the hard cap, or apron.

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If Lee is signed today, December 30th, his cap hit would be $988,819. That figure declines by $9,155.73 daily. Bowman’s cap hit today would be $548,121, but an additional $440,698 would count against him towards the Warriors luxury tax total. His potential cap hit prorates by $5,075,20 daily. The individual cap hit of either player today exceeds the Warriors’ $374,925 hard cap cushion, making either conversion illegal at the moment.

What can the Warriors do?

The easiest thing for the Warriors to do is trade a minimum-salaried role player such as Alec Burks, Glenn Robinson III, and Marquese Chriss, all of whom have a $1.6 million cap hit. Burks’ name has been floated around the most, and according to Monte Poole of NBC Sports Bay Area, league sources say the Warriors are willing to part with him. His $1.6 million cap hit is very moveable and he should have many suitors based on his high-level of play this season.

Warriors potential cap sheet if they trade Burks, then sign both Lee and Bowman to their respective pro-rated minimum salaries today. — Warriors potential cap sheet if they trade Burks, then sign both Lee and Bowman to their respective pro-rated minimum salaries on December 30th, 2019.

Starting today (December 30th), the Warriors can trade Burks for salary relief and be able to convert both Lee and Bowman within the apron. If they were to execute such a trade and sign both players today, they would be just $17,851 below the hard cap for the rest of the season. They can increase their cushion by making another trade or waiving Marquese Chriss whose contract is non-guaranteed.

The Warriors have $1,743,897 remaining of their taxpayer mid-level exception. They can sign both Lee and Bowman using the exception in order to give them contracts that run for at least three seasons.

The Warriors could be a little more patient and run Lee and Bowman’s two-way clocks to its expiration. While they can fit both today, the Warriors already have such limited flexibility and $17,851 won’t allow them to do anything going forward. It is still best to try to let both players’ potential cap hits continue to prorate so they can have as much space below the apron as possible. It is also best to not rush a trade for Burks so they can try to get the most value for him in a trade.