Raptors face cap crunch if VanVleet, Poeltl return

Imman Adan and Daniel Hackett do a confidence check on whether or not Fred VanVleet will be back with the Raptors and discuss the deals from Toronto and Houston. Also, they touch on the crunch the team will be under if they re-sign VanVleet and Jakob Poeltl.

Video Transcript

IMMAN ADAN: Vibe check on that. Do you think Fred VanVleet is staying?

DANIEL HACKETT: I still think he's staying. I'm not sure. This Houston Rockets deal, if I was him, it's a little scary from a couple of perspectives.

IMMAN ADAN: Let's get into it.

DANIEL HACKETT: One--

IMMAN ADAN: I love that. OK.

DANIEL HACKETT: So first off, small guards going into their 30s generally see their values drop as they get older. So going into this offseason, my thinking was for Fred, this is-- he's been betting on himself for a long time-- early player option opt-outs, taking short deals. This is the time to cash in. This is the summer that he does it.

And you can say you look at this Houston Rockets offer, they're giving him his maximum salary. Maybe that's cashing in. But it's only for two years. So he's locking in about $80 million in guaranteed salary.

If he does see his body fail him over the next couple of years, or his knees and back get worse, or for whatever reason the shooting continues to drop off, he might not be able to recoup the amount of money he could have on a long-term deal a couple of years from now. Now, as he's Fred VanVleet, he might just say, you know, forget that, I'm going to bet on myself yet again. I'm going to take the money now, and then we'll hit free agency again. He might do that.

The other concern with this Houston Rockets deal is to me, it looks like they want to pay him to be a vet on the team this year, and next year they want him to salary ballast in a big trade. They're going to go star hunting to add to their core, and they've got a nice, big, fat $40 million expiring they can flow into any trade they want. And since he's on a multiyear deal, he can't say-- he doesn't have a no-trade clause. You can't stop it from happening, so--

IMMAN ADAN: Right. No, and I-- those are a couple of really key points that I want to sort of get into a little bit more. And the first one is as soon as I heard the proposed deal, you know, two years, what is it, $83 million-- and mind you, you know, it was Marc Stein who reported this. And he did say that he believes that-- or executives around the league believe that Fred VanVleet will sign this deal. So that's not really anything concrete.

And of course, you can't hear anything concrete, because that would be tampering and would violate all sorts of things. But also, that proposed deals already tampering. But it just it feels very much more like hearsay, not anything that's coming out of Fred VanVleet's camp, not anything that's coming out of the Houston Rockets camp. But who knows?

But I think the point about it only being two years-- and Fred VanVleet is 29 now. That contract will end when he's 31. And yeah, as soon as I heard it, I was like, this is a bet-on-yourself deal if I've ever heard of one. But it feels rather risky.

I know there are a lot of conversations about him wanting to be a free agent again when he is in his 10th year. And I can let you get into what that means is a 10-year max that he can sign. But that also feels not that likely, because how many teams are lining up to give a 31-year-old, a 10-year max extension there? What are your thoughts on that 10-year conversation?

DANIEL HACKETT: So the 10-year max is sort of a similar thing to what Pascal Siakam is talking about right now. It's considered-- it's called the "supermax." And essentially, it's just you get instead of 30% of the cap like most veteran players get, you get 35%. And you can qualify for it automatically by just having a serve for 10 years in the league, then you get a [INAUDIBLE].

IMMAN ADAN: So there aren't-- you don't have to make all-NBA or do any of that other stuff, right.

DANIEL HACKETT: As long as you're old, you can get paid more. But for Pascal Siakam, he can get that early if he gets stuff like all-NBA teams and be the MVP, et cetera. So that's going to be a discussion moving into next year for Pascal Siakam. But for Fred, he can just wait.

Now, he has to wait three years to get his 10-year [INAUDIBLE].

IMMAN ADAN: Oh, so it's after third year. Oh, I thought it was after two years.

DANIEL HACKETT: So-- two years and some short. So that's not quite-- not quite what he wants from that perspective. So in that situation, maybe a four-year deal, where the fourth year is a player option where he can opt out early once he's eligible for that higher salary, is something he'd want more.

That being said, he is not-- with the exception of this Houston Rockets' "we'll pay you a lot to get really short term" sort of offer, he's not getting a max offer from anybody. He's not getting 30% except as this sort of "we'll try to steal you away" sort of offer. In terms of a long-term deal, no one's going to pay him 35% when he's at 10 years. So I don't think that's a major concern.

IMMAN ADAN: Yeah, I don't-- I don't think it's-- I don't think there's any real fire to that smoke.

DANIEL HACKETT: It's really important for them to not pay tax in these years where they're not really contenders.

IMMAN ADAN: Right.

DANIEL HACKETT: So this all goes back to Fred and Jak coming back.

IMMAN ADAN: Yes.

DANIEL HACKETT: Right now, with the money they have on the books-- Gary having opted in, everybody else on the books-- I'm assuming they're going to waive Thad Young. Thad Young's only guaranteed $1,000,000 salary. So let's just assume he gets waived and it happens tomorrow, or it doesn't happen at all.

They've got about $43 million between where they are now and the luxury tax line to give to those two players, Jak, Fred. So I was fiddling around in the numbers, and I came up with, well, setting aside about $18 million for Jak and about $27 million for Fred.

So for Jak, that's about $20 million a year you're allowed to give raises each year, certain small raises, which is very much in line with what everybody expects for them to get. So that $27 million that's-- that Fred is potentially getting is not $40 million.

IMMAN ADAN: No, it's not.

DANIEL HACKETT: It's quite a ways away from $40 million. So that's where the Raptors are at. So they could give him $40 million. But then if they want to stay under the tax, they've got to find a way to get rid of $13 million of other salary on the books.

So maybe that's a Gary Trent Jr. trade, trade in for some lower salary player. I don't know if they're interested in that. Maybe if you trade Boucher and you trade Otto Porter Jr., you find a way off of the [? coast. ?] That can cost your draft picks depending on the other team, how interested they are.

So for those reasons, they probably don't want to give Fred $40 million in the first year.

IMMAN ADAN: I don't see that happening.

DANIEL HACKETT: They want to give him something below $30 million. But what they can do again, as you pointed out, they can offer more year. They're not trying to get Fred on a two-year deal like Houston is, a relatively mercenary deal. This is a "stay here, stay home with us, you've been here your whole career, we want to keep you for a long term" sort of deal.

So they can go to three years. The number that was floated around very early in the rumor mill was 390 that he might see from teams. That seems like too low to beat this Houston offer at this point now that they've come in with 283. It's like, I'm sure Fred can make $7 million in the third year no matter what happens between now and then.

IMMAN ADAN: Yeah.

DANIEL HACKETT: But as you go longer, it becomes more and more beneficial to sign a long-term deal. So if you go to four years, let's say it's $120 million-- that's probably on the low end, but that's sort of what the Raptors would want to see, 120-- you've got an extra $40 million of guaranteed money on top of it. So he's have to make $20 million per year sort of thing afterwards just so they'll be keeping up.

IMMAN ADAN: The bal-- yeah.

DANIEL HACKETT: Or you could go for 140. And that's higher than the Raptors would want. They'd have to shed maybe one piece of salary. They could do it that way.

IMMAN ADAN: I was thinking that. I Think they're probably going to have to shed some more. It can't just be a Thad. We're looking at maybe Otto and Chris Boucher just to sort of get to the starting point.

DANIEL HACKETT: Maybe one or the other, if you don't want to go [INAUDIBLE].

IMMAN ADAN: Yeah. Hey, it really depends on, like, how real this Houston offer is and how-- what else you can sort of entice Fred VanVleet with staying with. But it's interesting to me.

Now, I want to ask you a question-- and you did mention this-- I don't think the Raptors do this. People get very upset. And I think we'll get very upset at me just sort of mentioning this. It's not my money. I don't particularly care.

I also don't think the Raptors do this. But if they're sort of gambling here and need to beat out a Houston, I don't think 40 isn't on the table. But could the Raptors looking at-- look at this here as, let's pay the tax, see if this works, see if we've got something here so we keep these guys together, and then just shed money next offseason because we've got all of these contracts that, you know, we can trade away all of the players on the Raptors roster are on positive contracts that can easily be moved that they won't ever touch being a repeater tax team, they'd just be paying the luxury tax for one year?

Again, I don't think they'd do that, but it's also not my money. What are your thoughts on something like that?

DANIEL HACKETT: It's potential-- it's possible.

IMMAN ADAN: Right.

DANIEL HACKETT: It's risky. If you go into next summer, next summer they actually have a lot of players that they need to retain by giving raises. Pascal Siakam, if he makes all-NBA again this year, will be ready for a supermax potentially if the Raptors want to give it to him. Even without that, he's looking at about a $5 or $6 million pay raise just playing to his new maximum salary.

OG Anunoby, I have no idea what his market is going to be. It's going to be high-- like, bare minimum $30 million, probably more.

IMMAN ADAN: Are we just hurting ourselves a little bit? Are the Raptors increasing his value across the league with all of these stores? Is he just going to be worth so much more because of all of these, you know, pretend trade reports that have come out?

DANIEL HACKETT: It could be, yeah. The 20 first round picks or whatever?

IMMAN ADAN: Yeah.

DANIEL HACKETT: Yeah. I mean, it could be.

IMMAN ADAN: Jeez.

DANIEL HACKETT: But I mean, I think that teams just actually know the value of an elite defender on the wing who can also hit a 3. You can usually find an elite defender on the wing who can't hit a 3, or you can find a decent defender on the wing who can hit a 3. OG Anunoby is rare.

IMMAN ADAN: Happens to do both and does more. He's more than just a 3 and D guy as well, which is even rarer.

DANIEL HACKETT: He does have that potential. Yeah, he does have that potential. And I think the big--

IMMAN ADAN: You're like, not yet. [LAUGHS]

DANIEL HACKETT: The big thing that he has that most defenders don't have is you can defend [? 1v5 ?] A lot of good wing defenders are good on the wing. But OG Anunoby can defend [INAUDIBLE] within certain schemes. Like, this is a very unique player. And I don't-- I don't know whether that nets him a maximum salary, but it's probably going to net him something between $30 million and the maximum salary, which is still significant.

So they have to pay OG. They have to pay Pascal. Gary Trent Jr. is now, once again, an unrestricted free agent next summer. Do you want to let him walk? Do you want to pay him? Precious Achiuwa is ready for an extension this summer or resigning next summer as a restricted free agent. Is that a core piece you want to spend money on? So on and so forth.

So there's a lot of pieces to be given raises too. So if you're already spending in tax this year, if you just want to keep guys, you're going to be spending the tax next year. And most of those players, you're not going to be able to trade. With unrestricted free agents, you're not going to get value for them. And the guys you have to trade are the guys you just signed this summer. So it's a little bit complicated that way.

The other thing about repeater taxes is that by taking a year off from paying tax, you don't avoid the repeater tax. You have to take two years off paying tax.

IMMAN ADAN: Right, right. It's just if they take it down and just decide, hey, we're not good enough for two years-- yeah, no. That's a good point.