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How Wizards can sign free agents without cap space originally appeared on NBC Sports Washington
Following an exciting close to the 2020-21 regular season and a first-round exit at the hands of the Philadelphia 76ers in the playoffs, the Wizards are looking to improve and make some real noise in the Eastern Conference next season.
Over the next few months, general manager Tommy Sheppard will be tasked with building a contender around Bradley Beal and Russell Westbrook without considerable cap resources to do so. It won't be the easiest offseason, but a few correct moves along the margins could significantly raise this team's ceiling.
Here's what the Wizards have to work with as the offseason begins.
Salary cap space/Luxury tax room
This year, the NBA's salary cap rose slightly from $109.1 million to $112.8 million with the luxury tax threshold at $136.6 million. Taking into account their guaranteed contracts for next season and the rookie scale value of their first-round pick, the Wizards will be just under $10 million below the tax before free agency begins.
Then they'll have to consider bringing back some of their own free agents (Robin Lopez, Garrison Mathews, Ish Smith, Raul Neto), which could easily push them over.
It's unlikely the Wizards will have cap space to sign free agents outright, and if they decide to go into the tax, their mid-level exception will be impacted.
If the Wizards stay below the $132.6 million luxury tax threshold -- which appears unlikely -- they'll have access to the full $9.5 million mid-level exception (MLE). If they go over the luxury tax, they'll have access to the $5.9 million taxpayer MLE.
The MLE is for teams over the cap and gives them the ability to sign a player for up to four years. The Wizards can either use the full MLE to sign one player, or break up the $5.9 million a few different ways among multiple players. For example, the Wizards used $6 million of their MLE two summers to sign Smith and $7.3 million of it to bring in Lopez this past fall.
It's also important to note the Wizards aren't required to use all of the MLE.
If the Wizards use the full MLE and can't keep their payroll below the $136.6 million luxury tax number, it'll trigger a hard cap for the 2021-22 season.
15th overall pick
The Wizards only have their first-round pick this year and it's a pretty good one at No. 15 overall. They can use it on a promising young player in what figures to be a pretty good 2021 NBA Draft class, or they can package the pick along with a player or two to make a bigger trade.
Because the Wizards sent a protected 2023 first-round pick to the Rockets for Westbrook, they're only permitted to trade this year's pick. The NBA prohibits teams from trading firsts in consecutive seasons, so their 2022 first-rounder is off-limits for now.
Early Bird rights
Bird rights allow teams to go over the salary cap and luxury tax in order to retain their own players, and the Wizards have early bird rights on Ish Smith.
The other advantage this creates is if Smith signs elsewhere, Washington could try to work out a sign-and-trade with that particular team to either create a trade exception or actually get a player in return. Teams aren't required to do sign-and-trades with unrestricted free agents, but we're seeing more of these as player movement has taken over the landscape of the league.