Why the 2022 free agent market could be dry
The 2021 offseason went from being very hyped to a being very slow one relative to the past few years. Barring a trade or two involving a couple of all-stars, Kyle Lowry may have been the biggest name to change teams this offseason. Despite there being more projected cap space this offseason than in 2020, several teams like Dallas, Miami, Toronto, and New Orleans all opted to operate over the salary cap at the last minute. The lack of marquee names led teams to decrease their spending power which overall depressed the market.
Can we expect a more robust market in 2022? It seems as the opposite is happening with many veterans are rushing to lock down their money now through extensions to avoid free agency. This was an expected consequence of the COVID-19 pandemic and the loss of revenue it caused. The rate that the salary cap rose prior to 2020 made potential earnings in the free agency market significantly exceed what players can get through their maximum veteran extension amounts. Now players are incentivized to stay with their teams and earn more with them, especially maximum players.
Where does this leave the amount of potential cap space teams? As of now, only four teams are projected to generate maximum cap space, and it’s possible most of these teams eliminate theirs if they extend certain key players on their roster.
Memphis is currently projected to generate $45 million in cap space with 15 players on the roster, including three first-round picks, including their own and ones from the Lakers and Jazz. That figure does not factor in Jaren Jackson Jr. who is currently extension-eligible through October 18, 2021. It's a strong possibility he either extends with the Grizzlies or re-signs with them in the 2022 offseason. Regardless of how he signs a new deal with them, a new contract for Jackson Jr. will likely cut their cap space projection roughly in half. They're really working with $20-25 million in cap space when factoring in a new deal for Jackson Jr., but they could generate more by salary dumping a large contract such as Steven Adams. They certainly have the draft equity necessary to get another team with cap space or a large enough trade exception interested in helping them offload money. Generating cap space after the 2022 offseason could be challenging for Memphis if they extend both Jackson Jr. this offseason and Ja Morant the next.
Orlando is currently projected to generate $40 million in cap space with 10 players on their roster, including their 2022 first-round pick. That projection will decrease significantly if they extend Wendell Carter Jr., but that could be offset if they eventually trade veteran Terrence Ross. Aside from a potential Carter Jr. extension, their cap space could decline further if they utilize their $17.15 million trade exception. The Magic are currently in developmental mode and don't really need to be aggressive in free agency for rotation players considering they already have so many young players to focus on. It's possible Orlando utilizes their flexibility to facilitate salary dumps to gain more future draft picks.
San Antonio is also set to generate $30 million in cap space this offseason. That projection doesn't factor in a potential extension for Lonnie Walker and requires waiving their non-guaranteed players, including Zach Collins who is only 50 percent guaranteed for next season. Their only significant long-term commitment they added this offseason is Doug McDermott on a three-year, $42 million contract. It was unclear how exactly this Spurs front office would utilize their cap space but they clearly want to keep their flexibility going forward. Their restraint shows a commitment to developing their young players with an interest in adding veterans on team-friendly deals.
Detroit is currently projected with $25 million in cap space despite signing Jerami Grant and Kelly Olynyk to lucrative deals in consecutive offseasons. This is largely thanks to Blake Griffin’s $29.8 million dead cap hit coming off the books after this season. They could reach $30 million in cap space if they decline Hamidou Diallo's team option, and $37 million if on top of that both Cory Joseph and Trey Lyles decline their player options. If history repeats itself, Detroit will likely pursue another good rotation player with their space on reasonable deals. But like the Spurs, it seems unlikely that they are going to major spenders while rebuilding.
Fringe cap space teams
New Orleans can generate $26 million in cap space but that would require waiving Josh Hart's non-guaranteed $13 million and not extending or re-signing Jonas Valanciunas. There's a strong chance at least one of those players are back with the Pelicans next season, making them an over-the-cap team. Cleveland could have significant cap space if they are able to offload Kevin Love or agree to a buy-out with him. A potential extension for Collin Sexton would get in the way, but they could offset that if they were to move on from veterans such as Larry Nance Jr. and Cedi Osman. Boston was in a position to generate $30 million in cap space had they not extended Marcus Smart. This would've involved waiving Al Horford's partially guaranteed contract, and they could've gotten closer to $37 million if they got off his salary completely. Charlotte was also similarly positioned to generate $30 million prior to extending Terry Rozier. The number of teams with cap space could slightly increase, but that won't change the reality of how slow the 2022 free agency market could be if more top players keep signing extensions. Potential names who could extend right now or hit free agency in 2022 include James Harden, Kyrie Irving, Bradley Beal, Zach LaVine, Deandre Ayton, and Michael Porter Jr. With the exception of LaVine, all those players listed stand to earn more with their current teams through a maximum extension than on a maximum contract elsewhere. It's possible we don't have another free agency filled with significant star movement like in 2019 until around 2025 or 2026 when a lot of these recent extensions are set to expire. The NBA is expected to renew it's TV deal around them which could lead to a significant rise in the salary cap. [listicle id=1522028]
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