Chicago Bulls offseason: State of the cap

Rob Grabowski-US PRESSWIRE

Looking at the Bulls' cap situation heading into this offseason.

As we head into this offseason, we're going to take a look at a few of the questions surrounding the Bulls. First off, we'll take a gander at the salary situation, which really isn't all that pretty.

As a reminder, the salary cap this season was set at $58.044 million, the luxury tax line at $70.307 million and the tax "apron" at $74.307 million. The cap numbers for next year have not been calculated yet, but I would expect a slight bump in each of those numbers.

[Note by JayPatt, 06/02/13 11:53 PM CDT Well, it's looking like the cap WON'T be going up as much as initially expected. ESPN's Marc Stein says it will likely only rise to $58.5 million, which isn't good for Bulls]

[Note by JayPatt, 06/03/13 12:57 PM CDT Stein now has a luxury tax projection of $71.6 million, which is a bigger hike than the cap, so a bit better news than expected in that regard]

What the Bulls also have to consider this season are the new tax rates. Here's a chart with info from Larry Coon's CBA FAQ on the new rates for non-repeaters, which is what the Bulls fall under for next year:

Salary above tax line Tax rate Incremental maximum
$0-$4,999,999 $1.50 $7.5 million
$5,000,000-$9,999,999 $1.75 $8.75 million
$10,000,000-$14,999,999 $2.50 $12.5 million
$15,000,000-$19,999,999 $3.25 $16.25 million
$20,000,000 and above

$3.75, and increasing

$.50 for each additional

$5 million

N/A

With all this in mind, here are the Bulls' guaranteed contracts for next season (data from Sham Sports):

Derrick Rose $17,632,688
Carlos Boozer $15,300,000
Luol Deng $14,215,000
Joakim Noah $11,100,000
Taj Gibson $7,550,000
Kirk Hinrich $4,059,000
Jimmy Butler $1,112,880
Marquis Teague $1,074,720
Richard Hamilton $1,000,000
Total $73,044,288

The Bulls are already into the luxury tax with just nine players, and Hamilton doesn't even count because he almost certainly won't be on the roster next year. Rip could be a $5 million trade chip (we'll explore this at a later date), but the more likely scenario is that he's bought out for $1 million, which must be done by July 10 before that $5 million is fully guaranteed.

Hamilton is not the only Bull with a non-guaranteed deal, as Malcolm Thomas has one as well. Thomas has a fully non-guaranteed contract of $884,293, which becomes $250,000 guaranteed if he remains with the team past July 24, and $500,000 guaranteed if he sticks past Dec. 9.

The Bulls have the option of re-signing their own Non-Bird rights free agents (Nate, Marco, Nazr being the useful ones) at 120 percent of last year's salary. Or, they could choose to use the taxpayer (mini) mid-level exception (starts at $3.183 million) on one of them. There's also the option of signing players at the minimum.

The Bulls have a bunch of little cap holds as well, including all their impending free agents, Nikola Mirotic, the 20th pick, and hilariously enough, Brian Scalabrine (his rights were never renounced). Since the Bulls are over the cap, these cap holds don't mean much. But it should be pointed out that the cap hold for the 20th pick is $1,174,200, or 100 percent of the rookie scale salary for that pick. So if the Bulls keep that pick and don't Euro-stash, that's about how much will be added to the guaranteed salary depending on what percent of the rookie scale salary the Bulls sign the pick for. It ranges from 80 percent to 120 percent, with nearly all players getting 120 percent. However, Teague infamously signed for only 100 percent last year.

With or without a signed draftee, the Bulls are close to the apron, which is why only the 'mini' MLE is available (no full MLE, no BAE) and it also means acquiring a player via sign-and-trade is pretty much out as the trade isn't legal if it puts you over the apron [note: this is a rule phased-in for this offseason, as you remember the Lakers did it with Steve Nash last year (the final year you could) -yfbb].

Because of the Bulls' current cap situation, the new tax rates and their general aversion to paying the tax , it wouldn't be surprising to see them try to limit salary as much as possible. That could mean stashing or dealing their draft pick, not using the exceptions at their disposal (besides the MMLE, there's also the $5 million Korver trade exception), or possibly even making a trade to cut salary. I would hope this would be more of an "all-in" season in terms of spending for a run at a possible title, but I truly doubt that happens.

[For future posts we'll more specifically talk about cap exceptions, the Korver TPE, and Rip's NG deal]

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