Suns President of Basketball Operations Lon Babby said he wanted to be careful with the Suns cap situation, to allow for a measured rebuilding process that might include one-sided trades where the Suns could absorb a bad contract in order to get a valuable asset (draft picks, young players on cheap contracts, etc). At the least, the Suns wanted to strike on the right players, rather than overspend on middling players.
OKC built their juggernaut by piling up losses (they had top-12 picks for 6 of 7 seasons until 2009-10) and cap space. They used that cap space in 2007 to absorb Kurt Thomas' $8 million salary in exchange for 2 low #1 draft picks. Those Suns picks were ultimately used to draft PF Serge Ibaka at #24 overall and C Cole Aldrich at #11 overall (acquired by trading their own #21 and the Suns' #26 to New Orleans for the #11 and Morris Peterson's $5 million salary). To recap, that's absorbing $8 million in one year and $5 million in another for the rights to a lottery pick and a perennial contender for Defensive Player of the Year.
Sounds like keeping some cap space is a good, measured approach right?
Well, that measured approach lasted all of 4 days.
While Steve Nash was jetting off to LA, the Suns secured commitments from the first 3 players they targeted this summer. Michael Beasley, Goran Dragic and Eric Gordon all agreed to play for the Suns after free agent visits.
The damage? Adding in first-round pick Kendall Marshall, the Suns have committed nearly $28 million in new money for the 2012-13 season.
The problem? The Suns only had a little less than $26 million available to spend, and that's ONLY if they renounce their rights to ALL of their unsigned free agents, including young center Robin Lopez. Whoa.
What does this mean? Hit the jump.
For starters, don't dismiss the problem just because New Orleans will likely match on Gordon, freeing up half that committed money. The Suns still need that cap space on July 11 to even offer Gordon the contract in the first place. In addition, neither Beasley nor Dragic (as far as we know) were told their offers were contingent on Gordon being matched. All three will be signed on July 11. Marshall's cap hold is there on July 11 too, regardless of whether he signed a contract yet or not.
Second, don't count on any TPE from the Nash trade. There is no TPE (traded player exception) for sending Nash to LA for nothing because the Suns are under the cap. The TPE is only granted for teams over the cap sending a player to a team that's under it. Suns had a TPE for the Kurt Thomas and Amare Stoudemire trades, for example, because they were over the cap at the time. Not so, in the Nash trade. Suns just have the salary cap space he leaves behind, which was spent already.
Anyway, back to free agency, where the Suns have already overspent. Unless the Hornets match the Gordon offer AND Dragic and Beasley wait until July 14 to sign their contracts after Gordon's money is freed up again. But that's a game of losers poker. You have to play to win, and that means assuming New Orleans won't match.
They need to rid themselves of at least 2 million in salary by July 11 (unless the Suns work out a sign-and-trade instead, that includes current players heading out to New Orleans) in order to sign all three guys that day.
The easy answer is to use the amnesty clause on either Josh Childress ($6 million this year, $21 million over next 3 years) or Hakim Warrick ($4 million this year, nothing guaranteed beyond that). Amnesty removes the players's salaries from the salary cap calculation, but all the money is still owed to the player on the original schedule.
It sure helps that LA gave the Suns $3 million in cash yesterday, going a long way to completely paying for a Warrick amnesty. Now that the Suns have Frye, Morris and Beasley at PF, the Suns definitely do not need Warrick anymore. And with the LA/Nash money, it would only cost $1 million to make Warrick disappear and to pay for all their commitments (as opposed to still costing $18 million to make Childress go away).
The bummer of amnestying Warrick already is that takes one more round out of the barrel for future moves. Yet, amnesty only helps if you are UNDER the cap, and this month may be the last time the Suns will be under the cap again for years. No use waiting to use Childress' bigger contract for more space. It does not help if you're over the cap.
So, all signs point to an amnesty of Hakim Warrick next week because it's the easiest option.
And even then, there's just enough under the cap for their current commitments. And not enough for Robin Lopez, or Aaron Brooks, or Shannon Brown, or Grant Hill or any other unsigned Suns free agent. The Suns would get the newly-created "room" exception of $2.5 million, given to those teams under the cap who max out the $58 million cap. That might get them a backup 2-guard.
Good news: if New Orleans DOES match the Gordon offer sheet, the Suns do have the ability to UN-renounce players to get their rights back (this is allowed in the case of an offer sheet). So, Lopez and/or Brown or Hill can get their Bird Rights back if the Suns want them.
The only other option is to trade a veteran into someone else's cap space. Armed with extra first round picks, you could envision someone taking on Warrick or Frye with the carrot being a low first-round pick being thrown in to seal the deal. But I suspect the Suns would rather not give away assets in a salary dump anymore, even low first-round picks.
It's possible the Suns will include current players in a sign-and-trade with New Orleans for Eric Gordon, making the net salary increase on Gordon less than $12.9 million this season. But right now the Hornets are dead-set on simply matching the offer sheet to Gordon and thanking the Suns for doing all the work. Again, the Suns still have to create the space to make the offer in the first place, before New Orleans matches it and frees up the money again.
Congratulation, Suns fans! The Suns went out and spent every penny they had. Again.
Here's the Suns vision of an ideal 2012-13 lineup.
If New Orleans matches on Gordon, you'd better hope O.J. Mayo is still looking for more money than anyone's willing to offer yet. But that's almost 2 weeks from now.