How the Memphis Grizzlies Have the NBA’s Worst Salary-Cap Situation

For all its complexities, the NBA salary-cap rules are fairly easy to navigate from a theoretical standpoint. The league and the NBA Players Association both want to encourage spending on player salaries, which is why a soft cap (one that can be exceeded) is in place. Yet to create parity and prevent richer franchises from buying up all the good players, the machinations of the cap force the teams that spend more to play by certain rules.

Last summer, the small-market Memphis Grizzlies entered into that spending territory, extending Mike Conley and signing marquee free agent Chandler Parsons to long-term deals that vaulted them above the cap, then flirting with the luxury tax. The idea was simple: build upon the momentum created by years of success, get a little younger and try to win during the primes of Conley and Marc Gasol’s careers.

But to be successful at assembling a roster, going beyond the core three players is necessary. Nailing the return on investment for those three players is vital. Drafting younger players to flank them keeps the machine turning.

The Grizzlies have failed to check any of those three boxes.

Memphis is standing on the ledge overlooking the luxury-tax threshold, but it still has work to do. Key restricted free agent JaMychal Green remains unsigned, and the strange drama and dynamics revolving around the two sides’ negotiations cast an eerie shadow over the hopes of retention. General manager Chris Wallace has a full roster as it stands.

Last season, the Grizzlies limped their way through an injury-filled campaign, in which their two best weapons both missed significant time with injuries and their coveted free-agent signing logged fewer than 700 total minutes. Still, rookie head coach David Fizdale rallied his troops to win 43 games and secure a postseason bid before bowing out in the first round. It was as much of a success as any team in their situation could have hoped to find.

But July provided even more of a disaster for their front office when Zach Randolph and Vince Carter both bolted for a paycheck signed elsewhere, leaving the team devoid of veterans and now missing their key sixth man from a season ago. Randolph and Carter may be aging supernovae, but they were the steadiest and most consistent players on the ’16-’17 roster. Those contributions are beyond challenging to replace.

Where will the Grizzlies turn from here to improve their roster and take steps forward? Wallace has made a couple moves this summer, but ultimately two straight failed summers and years of poor drafting are catching up with the franchise. It may be on the downward swing, dropping away from its bid to return to the Western Conference Finals, unless something drastic changes. With the cap situation that Wallace and his front-office teammates find themselves in and the talent they’ve currently amassed, making adjustments will be mighty difficult. The Grizzlies find themselves locked between a rock and a hard place in what just may be the very worst salary-cap dynamic in the league.

That Chandler Parsons Contract

Luck is as big of a factor in success as anything else. Twelve months ago, the Grizzlies were lauded for their Chandler Parsons signing, with the steep price seen as more of a market trend than an overpay. Sure it was understandably a financial risk to take, but it was the first high-quality free agent the Grizzlies had secured since moving to Memphis, and perhaps in the history of the franchise. A versatile swing forward who can shoot, pass and defend? Most pundits agreed: This was the type of move Memphis needed to make to keep up with the West.

It just never turned out that way.

The four-year, $94 million deal signed last July now looks like a nightmare for the organization. A third straight season ended prematurely due to knee surgery, this one less memorable than those before it. Parsons, while battling multiple bumps and bruises throughout the year, posted averages of 6.2 points, 2.5 rebounds and 1.6 assists while playing fewer than 20 minutes per game. His shooting was among the worst in the league: 33.8 percent from the field, 26.9 percent from three and a career-low 57.8 percent at the rim.

No matter how you slice it, it was a rough year for Parsons. Nagging injuries kept him in and out of the lineup throughout the season, often playing with minutes restrictions. The performance when he was on the floor wasn’t ideal, and the Grizzlies’ logjam of capable 4-men obstructed Parsons’ necessity to guard slower, less mobile competitors. Warning signs were there before the signing; reports surfaced about the Mavs letting Parsons go due to those balky knees. Still, Memphis needed to make a splash and swung for the fences.

Part of Parsons’ appeal was his ability to be a tertiary scoring option and playmaker. The idea of combining him with Marc Gasol meant, in theory, that ball movement would be a staple of the Grizzlies attack. His career average of 3.3 assists per 36 minutes is a high mark for a forward, especially considering the systems he’s been in and teammates he’s played with.

Due to that passing ability (and the Grizzlies lack of secondary ball-handlers,  Fizdale experimented with Chandler as a pick-and-roll ball-handler during his moments on the floor. Parsons’ PnR scoring, via, was in the 14th percentile league-wide, converting on only 22.9 percent of his ball-handling scenarios while shooting 22.5 percent from the field. The experiment failed; it’s hard to know whether because of his abilities or his lack of explosiveness, but faith will only be restored in his PnR acumen with an improvement in both.

Parsons still has some verve to his skill set, including a slow yet effective shot fake which somehow jukes opponents out of their shoes, and some crafty below-the-rim finishes due to his lanky frame. Perhaps most importantly was Fizdale’s insistence on establishing him as a post threat when opposing point guards switched onto him. It was the lone bright spot of Parsons’ season, where he scored in the 70th percentile on post-ups. The sample size may be small, but he has a plethora of moves in his arsenal to make smaller guards really feel like little more than a nuisance:

This mouse-in-the-house strategy of mismatch seeking isn’t enough to build around for a starter’s scoring toolkit. It’s a nifty go-to move when teams try to focus too much attention on Conley, but that’s besides the point. Memphis paid for a premium playmaker and shot-maker away from the basket. Instead it’s gotten a broken version who’s almost painful to watch move in the open court.

The luck factor rears its ugly head for the Grizzlies in this regard. Parsons did have a few injury concerns—or battles—during his Houston and Dallas days, but to foresee this type of drop-off during the times when he’s on the court was unconscionable 12 months ago. There’s obvious opportunity for Parsons to bounce back from last year’s disaster campaign. Perhaps no variable has a greater impact on Memphis’ ability to survive its busy cap situation than a return to his standard level of play.

Valuing Cap Holds and Your Own Free Agents

Free agency starts with these chips called cap holds. Every free agent who explores the market still technically can count against his team’s cap until he signs elsewhere…so long as that team hangs onto his cap hold.

Essentially, cap holds are used for two purposes: for over-the-cap teams to continue to operate as over-the-cap teams and take advantage of the chips they have available to them, and for teams to have an incentive to retain their own free agents.

Memphis entered this summer as an over-the-cap team with four key free agents: Zach Randolph, Tony Allen, Vince Carter and restricted free agent JaMychal Green. Like any smart GM, Wallace retained his cap holds into July, giving the team the ability to re-sign them no matter the salary without having to use one of those over-the-cap chips at their disposal. Lose one of them, and the only way to replace them on the free-agent market is to utilize one of those chips. For that reason, it’s paramount that teams operating above that salary-cap number deftly navigate their moves to ensure they lock in their free agents.

Somehow, things didn’t go to plan for the Grizzlies.

Randolph bolted and left his eight-figure cap hold to disappear into thin air. Carter joined him in Sacramento with former Grizz boss Dave Joerger. And free agents Tony Allen and JaMychal Green sit un-signed well into August.

Randolph and Carter, combining for north of $23 million in salary last season, skipped town without compensation to the franchise. Since they were operating over the cap, the leftover budget for them to replace their veterans with was roughly $5 million. Wallace was left with one course of action, pitching Memphis as a landing spot for cheap veterans or undervalued youngsters to prove their value on low-money, short-term deals.

Ben McLemore and his two-year, $10.7 million deal came in, as did Tyreke Evans’ contract worth $3.3 million next year. At best, players like these help keep the Grizzlies afloat. But they do little to help Wallace and the front office right the ship long-term.

You see, there’s a caveat with those fancy aforementioned cap holds. Over-the-cap teams can only re-sign their own guys at no penalty if they maintain that player’s Bird rights. Evans and McLemore, both of whom signed short deals via free agency, will not qualify for such action for the Grizzlies. Next summer, when Evans hits the market again, Memphis will be on the exact same square on which it sat after Carter and Randolph left, digging into the bargain bin and few remaining cap mechanisms to find replacements.

The Cap Consequences of Drafting Poorly

The easiest way to circumvent the losses of key free agents is to grow their replacements organically. One departure hurts way less (especially in the context of the cap) when external searches aren’t necessary. For that reason, rookie-scale contracts remain the biggest bargain in pro sports—at least from a team perspective. Next season, Karl-Anthony Towns will make almost a third of what Joakim Noah does.

The trickle-down effect to the rest of the roster is crucial. If a team has $100 million to play with, it is likely to spend about $80 to $85 million of that on its starters—roughly $16 million per starter. Have some superstars earning closer to $20 to $25 million a year, and we’re looking at maybe $12 million a year per starter. But add one rookie-contract starter into that mix, who makes, on average, $2.5 million, and the franchise can afford its two superstars, as well as two more starters at $16 million per year.

Without any such rookies to help alleviate those pressures, the Grizzlies are hitting a wall of both flexibility and competitiveness. Gasol, Parsons and Conley are locked in until 2020 at the earliest, potentially combining to cost the Grizzlies $83 million during the 2019-20 season. What rookie scale player is going to help cushion that blow moving forward?

Herein lies the massive consequences to not drafting well, regardless of positioning within the prospect pageant. Franchises simply have to find players on these guaranteed cheap agreements who help move the needle forward. A look at the last several years of Grizzlies drafting inspires little confidence that those answers are on the roster:

If you think you’re reading that graphic wrong, you’re probably not. No Grizzlies draft pick since 2010 has logged 80 career games with the Grizzlies, and only two players have lasted more than one season as part of the organization. Jarell Martin is the lone exception heading into his third season, but there’s no guarantee he makes the roster. Over an eight-year stretch of drafting, that certainly ranks among the worst in recent memory.

Rookies who are one-and-done and barely leave their mark create a revolving door of faces to supplant and flank their stars. In an era where continuity is at a premium with player movement at an all-time high, the most successful teams are ones able to keep the band together beyond the simple nucleus. Look at the role players for the last decade of NBA champions. All have bench players who spent multiple seasons with that franchise.

Examining this specific roster as it is currently constructed has a lack of certainty around who will be a role player, let alone a starter. A 2016 first-rounder, Wade Baldwin shot 31 percent as a rookie and 13 percent from three. Andrew Harrison supplanted Baldwin at the point and shot the ball just as poorly (32.5 percent from the field in 20 minutes per game). Deyonta Davis hasn’t logged enough minutes to be dependable. Jarell Martin has shown solid flashes, but he was still a 4-man shooting below 40 percent from two-point range. The best of the loot appears to be the undrafted Wayne Selden, now entering his second season. A freak athlete, there are still holes in his game—mainly consistent outside shooting.

The retreads that Memphis takes on can fill out the roster and provide solid role-playing ability, but the upside to be long-term starters is not very high. James Ennis was the best of the group last year, following Fizdale from the Miami Heat to find a role as a patchwork starter when Parsons was hurt. A long, cagey defender, Ennis shot 37 percent from three and provided above-average rebounding for his size. Troy Daniels helps space the floor as a shooting guard who makes deep threes, but he’s not reliable for anything else.

This year’s crop of retread attempts have more upside than the last, but they still have their flaws. Tyreke Evans, now 27 years old, is looking to revitalize his career and may not be around Memphis beyond his one-year deal. Ben McLemore, once a highly-touted prospect, is a streaky shooter who fails to impact the game reliably in other ways. He may benefit greatly from a change of scenery and an improved culture.

Should that be the case, a team of Conley-McLemore-Parsons-JaMychal Green-Gasol wouldn’t be the worst starting lineup in the league. If able to perform at their apex and stay healthy, that alone could be enough to get the Grizzlies 35 to 40 wins, even without substantial bench improvement. The implications of that success, however, would further decrease the team’s ability to snag one of those high-value rookies over the next several drafts. It’s part of the reason that signing retreads is a dangerous cycle for poor-drafting franchises to start: If those free agents are successful, the pick the franchise receives is lower in the draft, making it harder for it to finally find the right internal solution to its problems.

Why Tanking Can’t Solve Their Problems

That dirty seven-letter word beginning with “t” seems a viable option for so many organizations on the surface. In reality, it’s a drastically radical solution to a problem that is much more complex than simple glances can provide. Tanking is, and always will be, considered a radical strategy because of the uncertain nature of draft picks and how they pan out. While the Grizzlies haven’t held a lottery pick since 2009 (they picked Hasheem Thabeet No. 2 overall) their front-office track record in drafts speaks to the tepid confidence one might have in their full-scale rebuilding efforts.

But more than that, we’ve learned from the Philadelphia 76ers that to tank and tank effectively, a multi-season approach must be taken. The Grizz simply lack any youngsters to currently build around (which could elongate any bottoming-out efforts), and they owe their 2019 draft pick to Boston from that puzzling Deyonta Davis deal. This season doesn’t feel like the right time to begin that strip-and-sell approach.

Marc Gasol is 32, and Conley will be 30 by the end of next year. If the Grizzlies wait a season to tank, and then have a rather speedy three-year rebuilding plan, Gasol is on the wrong side of 35. Memphis will have wasted the primes of its two best players and, by that point in time, would need to continue its losing ways to find appropriate replacements.

The only sensible option left on the table would then be to deal Conley or Gasol as part of that rebuilding effort. Here’s the kicker: Conley’s lucrative, highest-paid contract in NBA history from last summer may be getting better comparatively as each year goes on, but the slowing of the cap growth in comparison to projections keeps him grossly overpaid. Good luck to Wallace if he wants to move that deal. Gasol, owning a player option for 2019-20 of $25.6 million with a 15 percent trade kicker, doesn’t have any greater desirability on the trade market.

Three years ago the Grizzlies were one of the most enjoyable teams to watch, thanks to grit-and-grind, toughness personified and a great hometown crowd in the Grindhouse. Pushing the San Antonio Spurs and Los Angeles Clippers in the postseason on an annual basis, they featured a rock-solid core of unselfish guys who were all individually underrated. Slowly but surely, things began to die off.

The remnants of that slow death are starting to poke their heads through the dirt. Years of poor drafting, a few bad contracts, an overshot NBA salary cap and some ill-advised maneuvering this summer from Chris Wallace have left the Grizzlies on death’s doorstep, clinging to hope that they won’t see the rest of the West pass them by.

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