Surveying the Raptors’ financials entering a crucial offseason

Welcome to the offseason, where the money takes centre stage.

The Toronto Raptors enter the summer in a relatively desirable place in terms of their salary cap and asset situation, yet will still have to walk a razor’s edge in order to augment their roster. Such is life in the NBA’s cap environment.

They currently project to come in below the tax line and the first apron – there are 25 teams that line up to be outside of the aprons and 24 outside of the tax – and also own all of their own first-round picks going forward.

Toronto is one of only six teams that are in full control of all of their first round picks (Charlotte Hornets, Golden State Warriors, Brooklyn Nets, Memphis Grizzlies, Detroit Pistons – however there are many other teams with a treasure trove of firsts via other teams including the Oklahoma City Thunder and Utah Jazz).

When it comes to their cap and tax situation, the Raptors finished $688,734 under the tax and $2,372,662 under the first apron this past season. They after ducked under the tax by trading Ochai Agbaji to the Brooklyn Nets before the trade deadline.

Now, heading into the offseason, they project to be $7,940,004 under the tax and $9,341,795 under the apron. But there are also a number of caveats attached to those numbers, including the player option of Sandro Mamukelashvili that is likely to be declined, the team options on Jamal Shead, Jonathan Mogbo and Trayce-Jackson Davis (they must decide on these options by June 27-29) and the incoming cap hit of their upcoming 19th-overall pick.

Lets examine where Raptors are at financially and what options that leaves available for them when it comes to team building this summer.

Probably the biggest question facing the Raptors’ offseason is are they able to swing a significant trade to jump from their current position as a lower-tier playoff team to a true contender.

Bobby Webster spoke to Toronto’s position in the trade market at his year-end press conference on Wednesday, specifically on the prospect of including draft capital to land a significant addition.

“‘Can you make a bigger step with one of those deals?’ We’re always going to be opportunistic in any trade market, it’s why we kept all of our first-round picks to have that,” Webster said. “I think financially we’re all well-positioned in the future to take on money if we have to.”

He also stated that ownership would be willing to back the team extending its salary into the luxury tax given the right opportunity.

“We timed it perfect when we won the title and went into the tax, but I think there’s always been that notion, which is when the time is right, that ‘come ask, and we’ll deliver,'” Webster said. “I think going into this season we realized this might not be the championship contending team … but we have full support and whenever the time is right, we’ll be ready.”

As far as expiring contracts and avenues for addition outside of trade are concerned this is what the Raptors are looking at:

Garrett Temple and AJ Lawson are both unrestricted free agents while Alijah Martin, Chucky Hepburn and Tyreke Key are all restricted free agents. All five players have cap holds ranging between $2.2-2.5 million. (This essentially acts as a placeholder that prevents teams from using room under the cap to sign free agents before using Bird rights to re-sign their own free agents.)

Meanwhile, they have plenty of exceptions available to them, including the non-taxpayer mid-level exception ($15 million) the biannual exception ($5.5 million) and a $6.4-million trade exception acquired via the Agbaji trade.

They also have five players eligible for extension: RJ Barrett (max of $186 million over four years), Jamal Shead, Trayce-Jackson Davis, Jonathan Mogbo and Gradey Dick.

Webster had this to say about the prospect of extending Barrett: “We’re going to keep all of those conversations private. I spoke to him throughout the season and at the end of the season. the good thing is he’s under contract, so that’s also something we can talk about at the end of next season.”

One last note; their tax and apron numbers are so close together despite the tax and initial apron threshold being $8 million apart due to the same reason we went over (along with local cap-ologist Blake Murphy) last offseason. There are “unlikely” incentives built into the contracts of Barrett, Immanuel Quickley and Jakob Poeltl that count towards the cap/aprons but not the tax, unless of course the incentives are improbably earned.

It appears that the upcoming incentives come in at roughly $230,000 more than last season’s based on the information available at Spotrac. They had some of the details available this past season, but don’t so far this year, and I’m not going bug Blake while he’s on a well-deserved vacation, so we’ll ride with that number for now.

For what it’s worth, last season, Barrett had up to $3.4-million in incentives, divided evenly between making All-Star, All-NBA or All-Defence. Quickley and Poeltl’s were listed at $2.5 million and $500,000, respectively. The specifics weren’t publicly available but Murphy reported that Quickley’s were $500,000 each for an MVP, All-NBA, All-Star, third-round appearance, Finals appearance, or championship up to a maximum of $2.5 million. Poeltl’s were $250,000 each for making the second and third rounds. The playoff incentives included a requirement of 65 games played and 20 minutes per game, so even if the Raptors beat the Cavs and moved onto the second round, Poeltl would not have been eligible to cash in.

We can safely assume the incentives are roughly the same this season, although we’ll have to wait until further information comes out to confirm.

Alright, see you back here later in June for further analysis on the Raptors’ financial outlook when we know more heading into free agency.

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