2016 Draft Strategy: Rookie Scale Cap Value
By Cole Zwicker
The “draft and stash” has become a popular tool late in the first round as both an immediate roster and cap flexibility mechanism. After an international player is selected, both he and the team can sign an agreement in writing that the player will not sign a contract with the team for that season, and the player’s offseason draft scale cap hold will be extinguished, freeing up cap room for teams in free agency and more importantly allowing the player to develop overseas. This is rather commonplace, especially for teams with multiple first round picks who already have a high percentage of guaranteed roster spots heading into the upcoming season.
The dynamics are a tad different in this draft in regards to the rookie scale. Both the league and the union have a mutual CBA opt out, of which notice must be given by December 15 of this year. It is anticipated that the union will exercise this opt out and negotiate a new collective bargaining agreement in the summer of 2017. While it’s unlikely that the draft pick rookie scale, currently extending in fixed fashion into the 2020-2021 season, will take high priority in these discussions, ceding hierarchical pecking order to BRI split, guaranteed contracts and maximum salary (the normal players), it is conceivable that the rookie scale will be increased for the years to come.
Currently, the only figure tied directly to the salary cap/revenues is maximum contracts (based on a lower percent of BRI than the salary cap). Thus, with the revenue spike of the new national media deal, max contract figures correlate and adjust to that increased revenue. Conversely, spending mechanisms such as the midlevel exception (a mechanism that will be largely obsolete over the next two years as most every team will have cap room) and the rookie scale are built into the CBA as concrete, non-adjustable figures. The fixed nature of the rookie scale therefore allows for a considerable cap value opportunity this summer, where a team can lock in a player for 4 years at a below market rate assuming the rookie scale increases in the next CBA. This at least puts some extra value on the prospect of signing a domestic (or in some cases an international player) player immediately instead of a “draft and stash” who will come over at a future point under an increased rookie scale.
Take a look at the 2016/17 rookie scale cap holds and it might help you visualize this strategy.
This is, of course, only a small part of the analysis process when making a draft selection. Selecting the best player available is surely the governing consideration. Other factors such as how many guaranteed contracts a team has, how many draft picks a team has and positional need are all significant considerations.
Perhaps the most alluring part of this thought process is how the talent in this draft aligns with this strategy. The value of the 2016 class outside the top 3 is in the 20-40 range, with guys like Chinanu Onuaku, DeAndre Bembry, Taurean Prince, Malik Beasley, Patrick McCaw, Stephen Zimmerman, Robert Carter, Caris LeVert and Gary Payton II all likely available. Getting a player of that caliber immediately locked in on a potentially lesser rookie scale for 4 years could prove to be immensely valuable in a league where it’s incredibly difficult to carve out a competitive advantage.
Teams like Denver at No. 19 (9 guaranteed contracts, 3 first rounders), Boston at No. 23 (9 guaranteed contracts, 3 first rounders), Philadelphia at No. 24 and No. 26 (6 guaranteed contracts, 3 first rounders), and Phoenix at No. 28 (7 guaranteed contracts, 3 first rounders) all have multiple factors to consider when making selections in the 20s. They, along with other teams, should at least consider the value of locking up a domestic player immediately under a potential lesser rookie scale as a rare opportunity to one up their counterparts. A few million dollars in cap value may not seem like a lot, especially given the cap spike, but any small advantage counts.