2020 free agency isn’t expected to be as eventful as 2019. This isn’t just because of the lack of star power on the market, but also because most teams are going to operate over the salary cap. Most of these over-the-cap teams still have plenty of flexibility due to the amount of space they have relative to the luxury tax. This allows them to use the non-taxpayer mid-level exception (NT-MLE), currently projected at $9.8 million. These teams are also well below the projected hard cap to participate in sign-and-trades.
There are a select few teams that are already set to be in the luxury tax in 2020-21 or close to it that are going to be limited with ways to make moves. These franchises will likely be limited to the taxpayer mid-level exception (T-MLE), currently projected at $6 million, and don’t have young players or draft picks with much trade value to shake things up. These teams may end up doing the least amount of transactions this summer due to their lack of flexibility.
PHILADELPHIA 76ERS
The Sixers have the highest payroll heading into 2020-21 at $146.9 million. They also are $8.1 million over the luxury tax which would give them a $12.9 million luxury tax bill. With four players set to earn at least $27 million next season, the Sixers will be locked into their current roster. Thankfully, they already have 11 players under contract and a likely first-round pick from Oklahoma City.
The biggest issue with the Sixers may be their foundation. After deciding to let Jimmy Butler go, they went all-in on an Al Horford-Joel Embiid frontcourt for the next four years. The pairing may already be proven unsuccessful as head coach Brett Brown began experimenting mid-season with starting lineups that don’t include Horford. The soon-to-be 34-year-old has $69 million guaranteed over the next three seasons. Despite his talent and leadership, most teams are set at center, and his contract is probably too tough a pill to swallow for teams that could use him.
If they decide to move on from him, they probably won’t get much of a return, but it could open up a ton of flexibility. They could also look to trade Tobias Harris if they want value with flexibility, but it’ll be hard to replace him with a player of his caliber. Unless the Sixers can trade one of their most expensive players to reduce payroll, they’ll be set with the T-MLE as their largest means for improving their roster. That could be enough to address their need for a backup point guard. They do have a large stash of second-round picks over the next four drafts they can trade, but those are best suited for minor trades. Unless the Sixers make a big salary-reducing trade, they’re likely looking at a summer full of incremental moves.
LOS ANGELES LAKERS
Assuming the Lakers re-sign Anthony Davis, they will have few moves they’ll be able to follow up with to improve the roster. With Davis back on a maximum contract, his starting salary will push them far over the cap. They will have to make excellent use of their mid-level exception because that is going to be their best shot at adding talent.
Kentavious Caldwell-Pope ($8.5 million), Avery Bradley ($5 million), JaVale McGee ($4.2 million), and Rajon Rondo ($2.7 million) all have pending player options this summer. Aside from Rondo, the other three players might have cases to decline their options. This is mostly due to the Lakers’ lack of flexibility this summer, making it extremely difficult to replace these players if they leave. If the luxury tax isn’t an issue, the Lakers would be wise to give each player slight raises.
The other obstacle preventing the Lakers from improving their roster is their lack of trade assets. Kyle Kuzma and their 2020 first-round pick isn’t a package that is going to net them the impact player they seek. After trading their draft equity over the next five drafts for Anthony Davis, their trade flexibility has run dry. The Lakers are most likely looking at running back their 2019-20 roster, which is good.
HOUSTON ROCKETS
The Rockets might not be considered among the league’s most unflexible teams if it weren’t for their self-imposed luxury tax restrictions. The past two seasons saw the Rockets not utilize the full mid-level exception amounts or maximize trade opportunities in pursuit of avoiding the tax. With the maximum salaries of James Harden and Russell Westbrook increasing each season, and potentially a lower luxury tax than the current $139 million projection, look for the Rockets to once again continue bargain-hunting. Regardless, being just under $10 million below the luxury tax with only nine players on the roster does put them in a tough position. They’ll still be pushing up against the tax if they get to the 14-player roster minimum, which presumably would eliminate using even a small portion of their mid-level exception.
The Rockets could alternatively use their mid-level exception and reduce salary with a trade later. The player that could be traded to increase their flexibility could be Eric Gordon. He just signed a veteran extension with the Rockets for the maximum amount he was eligible for. Still, the 31-year-old guard will be earning an average of $18.2 million over the next three seasons. That could quickly turn out to be a negative-value contract. Regardless of their tax plan, it would make sense to get a good trade package for Gordon while his value is relatively solid. They could replace his production with someone who earns less than he does while opening up a lot of flexibility.
BROOKLYN NETS
After signing Kevin Durant, Kyrie Irving, and DeAndre Jordan last offseason, the Nets capped themselves out for the foreseeable future. They further invested in their depth by extending Spencer Dinwiddie, Caris LeVert, and Taurean Prince. The Nets are now projected to be $4.7 million above the luxury tax with the current roster locked in for next season.
The Nets’ top priority after hiring a new coach will be re-signing Joe Harris. Because they’re already in the tax, they will likely be limited to the T-MLE instead of the NT-MLE. This is to so they won’t be subjected to the hard cap, allowing them to go deeper into the tax to re-sign Harris. The Nets have Harris’ full bird rights and seeing how the Nets are already in the tax, other teams could test their willingness to spend by making Harris big offers.
Fortunately for the Nets, they already have 14 players on their roster including the 2020 pick Philadelphia owes them. High spending likely isn’t an issue for them, and it doesn’t seem like they have any contract that is considered negative-value that they’re dying to get off of. Their lack of flexibility can bite them if the team is struggling next season. With most of the core earning at least $10 million locked in for at least the next two seasons, they’ll have a hard time retooling the team via trade without losing value.
LOS ANGELES CLIPPERS
Like the Nets, the Clippers also maximized their spending in 2019 and have invested in their core for next season as well. The Clippers only have 10 players on the roster for next season and have the mid-level exception for improving the roster. Without any real trade assets on the roster, the Clippers must prioritize re-signing their top free agents in order to keep as much talent as possible.
They’re $25 million below the projected luxury tax but could easily surpass that amount if they re-sign both Montrezl Harrell and Marcus Morris. The Clippers have Harrell’s full bird rights, so they can spend as much as needed to retain his services. Clippers have Morris’ non-bird rights but it allows them to re-sign him to up to a four-year deal with a maximum starting salary of $18 million. Seeing how the Clippers won’t be able to replace both players easily, look for them to re-sign both players despite it pushing them into the tax.
If the Clippers let both free agents go, they’d still be over the cap. There is no pathway for them to create cap space without trading one of Kawhi Leonard or Paul George, or gutting their roster. As talented and cohesive as their role players have been, they are unlikely to net the Clippers a significant upgrade in a trade. After trading all their chest of first-round picks and Shai Gilgeous-Alexander to the Thunder, they’re all out of assets and trade flexibility.