After spending a year and a half building around LeBron James’ return, the Cavaliers now have to work to maintain what they have without much room to improve.
In all likelihood, that means another deep dive into the luxury tax for owner Dan Gilbert. It may even mean a surprise trade.
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Let’s take a look at their free agents, salary cap space and assets for this summer before breaking down what needs to be done.
Potential free agents: LeBron James ($24 million player option), Timofey Mozgov (unrestricted), J.R. Smith (partially guaranteed, $5.4 million player option), Matthew Dellavedova (restricted), Mo Williams ($2.2 million player option), Richard Jefferson (unrestricted), James Jones (unrestricted) and Jordan McRae (team option)
Likely cap space: None
Realistic maximum cap space (using $92 million estimate): None
2016 NBA Draft assets: None (first round pick owed to Phoenix via Boston, second round pick traded to Boston) unless the Clippers finish with one of the league’s five-best record. In that case, Cleveland gets their second round pick.
Making significant commitments to Kyrie Irving, Kevin Love and Tristan Thompson the past two summers means Cleveland will not be a player in free agency in the near future. Those moves, however, mean their core is complete.
Assuming James re-signs (regardless of whether he opts for a long or short contract), the Cavs still will face major decisions with Mozgov and Smith. While both 2014-15 midseason acquisitions have disappointed somewhat this season, Cleveland would not gain any flexibility to bring in talent to replace them should they choose to leave.
The Cavs are the only franchise in the entire league to be a clear-cut luxury tax payer in 2016-17 this early on. If James and Mozgov return, it would take an astonishing turn of events to get them under the tax line.
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The Mozgov situation is particularly tricky because Thompson’s presence means he cannot be certain of a starting role long-term. Mozgov, the Russian center who helped turn around the Cavs’ fortunes last season and played a big role in the NBA Finals, has seen his production and minutes slip this season and turns 30 in July. He may want to explore his options before being relegated to the bench again, and the Cavaliers may not even want to match his salary demands.
Mozgov and Smith have the leverage, though, because of the Cavaliers’ salary cap situation. They cannot add anyone significant in a year where most of the league is overflowing with cap space. Cleveland’s unrestricted free agents essentially are all-or-nothing propositions. Interestingly, a benefit of adding Channing Frye at the deadline is that it weakens Mozgov’s leverage because they have a functional replacement (albeit someone with a very different game). Frye also helps mitigate the potential loss of Smith’s shooting.
Smith’s offseason has an additional fascinating wrinkle: While he has the decision about his player option, his 2016-17 salary under that option is not fully guaranteed. ESPN reported that less than half of Smith’s $5.4 million salary is guaranteed, so the team has an out as well if needed. Since according to Basketball Insiders, the guarantee date is September 7th, late in the free agency process, it may nudge Smith towards opting out and exerting more control over his future. That said, even if Cleveland does not want Smith at that price another team likely would, particularly as contracts go crazy this summer .
Backup point guard Dellavedova hits restricted free agency for the second year in a row, but the Cavaliers are in better position to keep him. Cleveland now has Dellavedova’s full Bird rights because he has spent three seasons with the team, meaning the Cavs can match any offer on a player whom they view as one of their most important pieces. However, unlike last year, when he fell under the restrictive Gilbert Arenas provision , Dellavedova can field much larger offers from other teams who may want to push the Cavs.
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Depending on how this season goes, Cleveland could also look to trade for upgrades. Kevin Love has been the subject of rumors seemingly for his entire NBA career, and missing out on the title again could be enough for the front office to solicit offers. Assuming he stays healthy, there will be no shortage of suitors for a talented player who turns 28 in the offseason. Cleveland also could consider trading Iman Shumpert or Smith, if he opts in, especially if they secure a replacement in early July.
The Cavs will spend the rest of their summer using their more modest assets. They have a large trade exception from the Anderson Varejao deadline deal, worth a little less than $10 million. That means the Cavs can add one or more players combining to make no more than that amount without sending commensurate salary back in return.
The massive pools of cap space around the league and relative lack of bad contracts will limit what the Cavs can get with the Varejao exception, but it provides another avenue to improve. Beyond the trade exception and minimum salaries, Cleveland will also have to make the most out of the taxpayer mid-level exception, worth $3,477,000 in the 2016-17 season. That amount can be used to sign a single player or split among more than one, but the contracts cannot run longer than three seasons.
As the only team in the NBA with zero cap flexibility, the Cavs face a very different off-season that holds great significance considering their place as a title contender with an aging superstar. They have the ability to hold the course or even improve, but it will take strong management and a little luck.