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Short answer: a nice place.
Long answer: the rest of this piece.

Earlier this week, I outlined possible scenarios regarding ways in which the Grizzlies could lock up some extra years to the contract of Zach Randolph. This afternoon, Adrian Wojnarowski reported that the two parties have reached an agreement on a deal that involving a merry fusion of the “opt-in,” “David West Money,” and “Hometown Discount” scenarios that I tossed up in that post, and leaves us hopeful in a number of ways.

Photo: Gary A. Vasquez / USA Today Sports

Per the new arrangement, Randolph will be opting into the final year of his current deal at $16.5 million for the 2014-15 season, and tacking on a two year extension beyond next season at $20 million ($10 million/per). Now the question becomes, in cold hard financial terms, where does this leave the Grizzlies positioned going forward?

To bring things into context, let’s first hark back to the breakdown of the basis of this offseason from the previous post I just mentioned, and account for the recent developments.

The Financial Basis of the Offseason (Updated w/ Zbo’s Opt-in)

Let’s set some parameters around which to unravel this Grizzlies’ offseason. I’ll actually be referring to this section quite a bit this summer, so as Tony Allen would say, antennas up! (Hey, I promised it’d be back) Let me note now as well, that all salary figures for this post are drawn from the Grizzlies’ salary page at the delightfully efficient

Note that I will be using the projected Salary Cap and Luxury Tax thresholds from Larry Coon, first of his name, king of the Andals and the first men, Lord of Collective Bargaining and Protector of the Agreement. For those who do not indulge in Game of Thrones, this is a long-winded and respectful way of me saying he’s the go-to-guy for all things CBA-related, and those to object his grace are to suffer terrible consequences.

As Coon notes, the following are projections, and “[t]he official numbers won’t come out until July, when the league conducts its audit.”

  • Salary Cap: $62.3 million
  • Luxury Tax: $77.0 million
  • Mid-Level Exception: $5.3 million

The numbers above matter to us, because I believe that we can rule out going over the crippling Luxury Tax at this point in time.

Next, let’s look at what I’ll call the “committed roster.” The committed roster is basically what the roster would be at the start of next season if all “predictable” activity was executed (ie. Kosta Koufos having his bargain contract for next season guaranteed), and no “unpredictable” activity was to occur (ie. trading Tayshaun Prince). Since I do the lion’s share of my writing after hours, beware that I often disassociate and call this the committed payroll from time to time, but the effect remains the same.

The committed roster for 2014-15 is as follows. Though Randolph’s opt-in has been reported at $16.5 million, ShamSports has it listed at $16.9 million, which I’m assuming accounts for possible performance incentives. We’ll use the latter number to keep the projected tax room conservative.

Committed Roster 627

  • a: Kosta Koufos and Nick Calathes have unguaranteed deals, but for our intents and purposes, but barring an unsavory act of deities, I think it’s safe to say they will be picked up.
  • b: So yeah, remember that the stretch provision was used on Fab Melo last year? Tangentially note that this analysis operates under the assumption that the Grizzlies do not use this on Tayshaun Prince.
  • c: Assume that the Grizzlies sign Jordan Adams at the customary 120% of the 2014-15 rookie salary scale, which was obtained compliments of Basketball Insiders. Temporarily I’ve used Jamaal Franklin’s rookie salary from last season as a benchmark for Jarnell Stokes, but it will possibly be a bit higher.

For those keeping score at home, that’s 13 players on board with a Luxury Tax room of about $5.8 million.

What’s Up Next?

Looking at the $5.8 million figure for which the Grizzlies’ stand below the Luxury Tax limit, the next step is to consider how they can utilize that breathing room.

  • Signing Free Agents: For starters, they can use it to sign some combination of their own guys. The following are free agents for the Grizzlies this summer: (*denotes bird rights)
  • Memphis Free Agents 2014

  • Since the Grizzlies do not possess bird rights on any of Miller, Johnson, or Udrih, I presume that re-signing any of them going forward will be counted against this year’s $5.3 million Mid-Level Exception (MLE). Additionally, however, they can opt to use the MLE on external free agents. In order to have access to the full, non-taxpayer MLE, it appears that the Grizzlies would have to first renounce Ed Davis, as his cap hold would propel them over the projected luxury tax threshold.
  • Leveraging Ed Davis: Signing Davis would not count against the Grizzlies’ MLE since they hold his bird rights, but in all reality would set them over or near the luxury tax, limiting flexibility. One way to preserve the utilization of Davis as an asset would be to use him in a sign-and-trade arrangement with a team that does not have the free cap room to sign him outright, allowing the Grizzlies to take back an asset in return. This doesn’t strike me as incredibly likely, but I’ve never been the best at setting, or betting on, odds.
  • Everybody’s favorite… TRADES: I started with free agency to keep it simple, but first and foremost is looks like the Grizzlies are going to have to make some deals. Under the leadership of Robert Pera, the organization will be making a strong shift in the direction of efficiency. With six wings on the roster, four of which taking on salaries over $3 million, two promising young wings looking to get off the ground, and two useful wings with impending free agent situations, there’s not exactly a model of roster efficiency in play here.Joerger has said as much in interviews, as well.How this shakes out is likely to be the absolute next step in how the offseason unwinds. It is also of note that the Grizzlies, as a non-taxpayer are capable of taking on 150% of their outgoing salary in a given trade, so long as it does not propel them over the Luxury Tax. Hence, another way of eating up that tax space.

What’s Down the Road?

This is where the real excitement begins. Larry Coon reports that it is projected that the Salary Cap and Luxury Tax “numbers for 2015-16 are now projected to be $66.5 million and $81.0 million, respectively.”

We’re getting a bit ahead of ourselves, but here’s what the committed roster for the 2015-16 looks like, using the same salary projection methods as I had in the previous committed roster (so keep in mind give or take a few grand for Jarnell Stokes):

Proj Committed Roster 1516

No, that is not a typo. It’s tough to imagine given the tax-flirting hades that the Grizzlies have found themselves in the past few years, but the Grizzlies could in theory not just be comfortably under the luxury tax, but have some serious Cap Room as soon as next summer, if the Salary Cap and Luxury Tax thresholds expand at the rate at which Coon’s sources expect.

Of course, if you look at the table, however, there is a big (about 7’1 285 pound) piece missing from that roster. That is because Mr. Marc Gasol is eligible for a fresh extension this December, or his deal will expire next summer. The obvious obstacle is then getting him to sign as well at a reasonable number. He’ll be on the cusp of turning 30 at the time of negotiation; a tricky age at which to get a contract done. Marc will be looking to cash in on what is likely his final long-term deal, while Grizzlies brass will want to protect against getting burned on a rapid post-30 decline. Regardless, from all accounts, it appears that both parties have a preliminary interest in finding a common ground.

Tentatively speaking, assuming the Grizzlies avoid taking on any more deals that extend beyond this coming season, they could be staring down between $10-15 million in legitimate cap space 12 months from now, as illustrated by the possible scenarios in the table below. As was the case when we speculated these for Randolph, these are not rumored figures nor are they absolute. They’re simply benchmarks I’ve constructed to provide a general idea as to the type of ranges that we are looking at. (Note that the maximum player salary has yet to be defined for the 2015-16 season.)

Marc Scenarios

Considering the breakdown, if management can find a suitor to assume the remaining years of Courtney Lee, Tony Allen, or Quincy Pondexter’s contracts without hamstringing us with any deals of the sort in the process, that mythical Cap Room number could theoretically wiggle towards the level of a max player. While it remains to be seen how tantalizing the 2015 free agent class will ultimately be, a lot of things can happen between now and then.

This type of talk may feel premature on our level as fans, but it is in no way further down the road than we should expect the front office to be thinking. How the summer plays out from here is up in the air, but from where I’m standing, it’s undeniable that the Grizzlies are off to a rock solid start. Over the past 24 hours, they’ve added two numerically stellar prospects and tremendously increased the odds that we will one day see the #50 hanging from the rafters in Memphis, all the while maintaining a flexible outlook in the long-term.

This 2014 offseason may have began with terrible unrest, but the sun is making a very strong case to peek its way out through the clouds.


For more of my speculative banter, hit me up on Twitter @StevieDanziger.


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