The Player: Carmelo Anthony
The Team: New York Knickerbockers
The Contract: Rumored to be 5 years at $122-123 million.
How does it affect the cap situation?
According to Basketball Insiders, Carmelo’s deal puts the Knicks firmly over the cap.
How does it affect the luxury tax?
The Knicks are solidly over the tax line and the apron as well. That means they are limited to the taxpayer mid-level exception. They can offer a free agent roughly $9-10 million over three years. However, there is some chatter that Phil Jackson is trying to curtail expenses, so it appears unlikely that the Knicks will dole out that amount (although Cole Aldrich may have received either a piece of it, or the veteran’s minimum).
And while Melo’s contract is certainly large, there is little concern that it may subject the Knicks to the dreaded “repeater” tax. Next year the repeater tax will punish teams that have been over the tax line for three consecutive years by charging them escalating penalties at set increments the further over the tax they get. The Knicks were under the tax in 2011-12 and will be again next summer once they renounce Amar’e Stoudemire, Andrea Bargnani, and others. For 2015-16, the repeater tax will apply to teams over the tax line in three of the previous four seasons but for the reasons just stated, the Knicks shouldn’t be ensnared.
There were rumors that the Knicks were looking to dump Amar’e’s salary into some other team’s space, but were unwilling to part with assets to do it. The goal would have been to land a bit over the cap but below the tax, to enable the use of the larger mid-level exception. Regardless, their target in this maneuver was Pau Gasol, who has since signed with the Bulls for an amount exceeding the MLE.
This year is a bridge year to ample 2015 cap space, when the team is expected to make significant moves to compete in earnest. Thus while I wouldn’t be shocked if Phil tries to balance out the roster (the Knicks have a glut on the wing and could probably use a point guard who can at least pretend to stop the ball or a more talented center), I don’t expect him to take on salaries that will significantly eat into next year’s cap room.
Knicks fans should also monitor the Iman Shumpert situation. The fan-favorite will be a restricted free agent in 2015 and may command a hefty salary, if this off-season’s market for wings is any indication. A smart move would be to trade him for a cost-controlled player on a more recently signed rookie contract, future draft considerations, or a good player on a salary close to the $2,616,975 Shumpert is receiving now.