Every year, the NBA takes a break from the most competitive part of its schedule and engages in a game of chance that is the equivalent of a team-building shockwave. While many teams in this situation have built their teams to be in this position with plenty of flexibility to absorb the rookie contract(s) that they are hoping to win, others have a lottery ticket by way of long-passed trades or injury-induced “gap” years. Where these teams end up selecting may end up having significant ramifications on their cap sheets and lead them to cut costs in ways that free up very valuable players.
How the Rookie Scale Works
As part of the CBA negotiations, the teams have been able to negotiate a price range for NBA draft picks depending on their position in the draft. While the overall table is published in the CBA already, the values increase at the same rate as the cap. Additionally, teams are able to pay up to 120% of the value set in the table and after accounting for salary cap increase. While the teams and players are give a range that goes as low as 80% of the rookie scale value, it is exceedingly rare that teams sign their rookies for anything less than 120% of the rookie scale amount. As such, the rookie scale amounts for this year (according to the projected $165M cap) are below:
As is apparent, the difference between the salary for the top pick and the bottom lottery pick is about $9.5M or about 5.7% of the cap. For teams that may be on a tight budget, this is a major swing.
In that light, I wanted to take a look at three situations that I find particularly fascinating and how the draw tonight could affect their roster building technique.
Indiana Pacers
Less than a calendar year ago, Indiana was a game away from the Larry O’Brien trophy. Now, the same team is among the four with the best odds in the league for the top pick. While this was not the plan before Tyrese Haliburton’s injury, the gap year roster building technique has left Indiana with a very interesting off-season.
Chensiyuan, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons
Indiana has a significant slate of extension eligible players and made a massive trade at the deadline to bring in Ivica Zubac. This is where the lottery comes in. As part of the Zubac trade, Indiana agreed to trade their pick if it falls in the 5-9 range. As it stands, Indiana has a 52.1% chance to keep their pick. At only a little better than a coin flip, Indiana’s cap sheet hinges on a game of chance.
Winning the lottery would also mean a significant salary joining the roster for a team that is notoriously averse to spending into the luxury tax. As a team with 12 guaranteed contracts and 14 total standard contracts already on the roster, they are already dangerously close or over the luxury tax depending on the projection for next year, even without adding the rookie scale salary. There are several role players that should be watching for the results of the drawing.
Who Should be Watching: Obi Toppin, TJ McConnell, Jarace Walker
Atlanta Hawks/Milwaukee Bucks
Atlanta and Milwaukee have an interesting salary situation approaching the summer since they have a draft swap situation that can significantly affect how both teams function financially. As part of the trade, the Bucks’ pick and the Pelican’s pick are in a straight across swap. Atlanta gets the higher pick and Milwaukee gets the lower pick. This means that the Hawks have two bites at the lottery.
Keith Allison from Hanover, MD, USA, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons
As is, Milwaukee has an interesting salary cap picture since they have 5 players with player options. Where this draft pick falls could affect which players opt in or opt out if their playing time could be condensed. However, to illustrate the wide variability of moving draft picks, the Bucks would currently be looking at $6,418,680 for the first year if their pick doesn’t move. This amount more than doubles to $13,198,440 should the Buck’s pick moves up to the highest slot possible at 2. While highly unlikely because this would involve either Atlanta’s or their own pick moving up to 1 AND the other pick landing second, it is still important to understand that how the ping pong balls bounce will have drastic ramifications on what the entire Milwaukee roster looks like next year.
Who Should be Watching: Giannis, Pelicans Front Office, All PO players in Milwaukee
Oklahoma City Thunder
Oklahoma City finished with the best record in the entire league this year. Yet, they own the rights to Philadelphia’s 1st round pick as well as the Clippers’ lottery pick. The roster in the Sooner State already has 15 standard contracts signed next year, which means that the first round pick(s) could end up pushing standard contracts off the books.
Therefore, barring a salary dump, the most likely candidates to leave the roster would be Kenrich Williams, who is on a team option, or Ajay Mitchell, who would only carry $1.5M in dead money, followed by Lu Dort or Isaiah Hartenstein, both also on team options. It is worth noting at this point that OKC would be ~$28.8M over the 2nd apron (not including the lottery pick). This means that a valuable rotation player would likely be on the open market from this roster and they have no real way to replace it other than on the veteran minimum or with the contributions of the incoming rookie.
All this to say, if this pick stays in the low lottery, it may be easier to justify trading away for assets down the road than if the lottery balls bounce this pick into the top 4.
Who Should Be Watching: Lu Dort, Isaiah Hartenstein, Kenrich Williams