Structuring signings and transaction timing in Utah

Utah has a lot of moving parts this offseason and therefore a lot of different ways they can order their transactions in order to maximize their flexibility. They’ve already officially waived Raul Neto, who was an unfortunate casualty of the Mike Conley trade and Bojan Bogdanovic signing.

After waiving Neto, making the Conley trade with Memphis, and sending Derrick Favors to New Orleans for a pair of second-round picks, the Jazz will have $17.86 million in space with which to work. That number is more than enough to sign Bogdanovic to his contract, which can start as low as $16.98 million in order to pay him the full $73 million over four years when factoring in full 5% raises.

However, there might be a better way for the Jazz to handle things, particularly in relation to the three second-round picks they would also like to sign, preferably to multi-year contracts using cap space. Before signing Bogdanovic, Utah still has four roster charges on their books, which would be replaced with the actual salary for Jarrell Brantley, Justin Wright-Foreman, and Miye Oni, should they sign those guys with cap space. In order to convince those guys to sign contracts at the minimum for three or four years, the Jazz may have to add a bit of money to their deals up front, but doing so would preserve their future flexibility with these guys tremendously. We’ve seen teams sign players to what’s colloquially known as the “Hinkie Special” – a bit of extra money up front in exchange for a four-year contract with full non-guarantees in the later years and a team option on the fourth year. The team option is important because if the player pops and they want to keep him long-term, they can opt out after three years and make him a restricted free agent. If he makes it to the end of the four-year contract, then he’d be unrestricted.

Since the Jazz already have those roster charges on their books, paying Brantley, Wright-Foreman, and Oni an amount above the rookie minimum really doesn’t impact their cap space all that much and may allow them to be much more flexible with those three second-rounders. Say they give each guy a small raise over his minimum and pay them a total of $3.3 million in 2019-20, rather than the $2.7 million they would under normal rookie minimums – that would leave them with $17.26 million in usable cap space. They could give that entire amount to Bogdanovic up front, which would lower his salary in later seasons. Frontloading contracts as much as possible is best for teams, if they can make it happen, so that those players are more tradeable as the deal wears on. Of course, players and their agents know this as well and don’t necessarily want to be traded most of the time, so they may fight for backloading the contract to make that more difficult.

Another path Utah could take is to scrap the Conley trade as a cap space trade altogether and instead work a three-team deal to remain over the cap. New Orleans was willing to give up two second-round picks to take Favors’ contract, so they’re very likely to want to guarantee his $17.65 million cap hit for next season – if Utah guarantees him before the trade, then he would count at that full figure in outgoing salary in the Conley trade. Combine that with Jae Crowder, Kyle Korver’s $3.44 million guarantee, and Grayson Allen, and the Jazz are sending out $31.33 million in salary, more than enough to remain as an over-the-cap team. In this situation, Utah’s pre-trade cap space would be very similar to post-trade – they’d have $17.67 million to spend, all of which could go to Bogdanovic to frontload his deal as much as possible, before executing the three-team deal with Memphis and New Orleans to bring Conley to Utah.

This path still would have required them to waive Neto, however, since keeping him would cut their cap space down to $16.42 million, not enough for Bogdanovic’s minimum-allowed $16.98 million salary to satisfy his $73 million in total money over four years. Since it doesn’t really help them all that much to construct it as a three-team deal, there’s no real incentive to do complicate matters. Neto’s already been waived, anyway, so even if they could save Neto by making it a three-team trade, he’s already gone.

How Utah structures their cap space and whether they prioritize getting their second-rounders on three- or four-year contracts versus paying Bogdanovic as much as they possibly can up front will be one of the last interesting cap questions for the Jazz. Putting Bogdanovic on the maximum possible first-year salary would pay him salaries of $17.86 million, $18.75 million, $18.64 million, and $17.75 million over the four years of his contract, but they may not prioritize frontloading that deal or Bogdanovic may want to backload it to make it less likely he’ll be traded. Their second-rounders also may not want the three- or four-year deals, which would give the Jazz a ton of team control for the first few years of their career. For now, it’s a waiting game until all of these deals become official and we see how they structure things.