How the Sixers should exploit KJ Martin’s cheap cap hold

How the Sixers should exploit KJ Martin’s cheap cap hold

The Sixers made their big free-agent splash overnight Monday, agreeing with Paul George on a four-year, $211.6 million maximum contract. They’ve also agreed to re-sign Kelly Oubre Jr. (two years, $16.3 million), Andre Drummond (two years, “$10-plus million”) and Eric Gordon (one year, $3.3 million veteran minimum), which means they’ve already burned through most of their spending power this offseason.

From here, the Sixers must get creative to round out their roster. KJ Martin might be their best lottery ticket in that regard.

Martin is an unrestricted free agent, but he has a tiny $2.1 million cap hold, and the Sixers have his full Bird rights. They’d slightly cut into their cap space if they kept him on their books instead of an incomplete roster charge ($1.15 million), but having Bird rights on him allows them to re-sign him to anything up to his max salary.

The Sixers could take advantage of that cheap cap hold to both their own benefit and Martin’s. They could keep it on their books, spend the rest of their cap space and then overpay him on a two-year contract with a non-guaranteed second season. They could later look to flip him as salary filler in a midseason trade.

The Indiana Pacers gave Bruce Brown a two-year, $45 million contract last offseason, only to ship him to the Toronto Raptors six months later in the package for Pascal Siakam. The Sixers were reportedly open to emulating that strategy with Klay Thompson and Kentavious Caldwell-Pope this offseason if they struck out on George, according to Jake Fischer of Yahoo Sports.

Martin could enable them to do a miniature version of it.

If the Sixers had a specific midseason target in mind, they could do an exact dollar-for-dollar match on Martin’s new contract. That would enable both the Sixers and the other team to trade those contracts in a straight one-for-one deal and not trigger a hard cap. If they were instead just looking to add a tradable contract to their books, they could use the dollar amount of the taxpayer mid-level exception ($5.168 million), room MLE ($7.983 million) or non-taxpayer MLE ($12.822 million) as options.

The Sixers could try to sign-and-trade Martin if they’re looking to fill that void more quickly, although as cap specialist Yossi Gozlan noted, Base Year Compensation rules would complicate that. Only 50 percent of Martin’s new contract would count as outgoing salary, which would make it more difficult for the Sixers or whichever team trades for him to avoid triggering a hard cap at the first apron. They’d be better off signing Martin to a balloon deal and preserving his contract for a midseason trade.

The only downside to this strategy is if the Sixers plan to hard-cap themselves at either apron with another move. They won’t be adding unnecessary salary to their books in that case. Otherwise, there’s no reason not to do this. They’re going to be over the luxury-tax threshold when they fill out their roster either way, so they might as well go deeper into it to increase their midseason flexibility.

Without Martin factored in, the Sixers can still create roughly $9.2 million in remaining cap space even if they keep Ricky Council IV ($1.9 million) but waive Paul Reed’s $7.7 million non-guaranteed contract. If they keep Martin’s cap hold as well, they could still have around $8.3 million in cap space. Based on the prices for Derrick Jones Jr. (three years, $30 million), Naji Marshall (three years, $27 million) Goga Bitadze (three years, $25 million) and Gary Harris (two years, $14 million), that should be able to net them at least one more solid player.

Once the Sixers used the rest of their cap space, they’d use a minimum exception to sign Gordon, officially sign Tyrese Maxey to his five-year, $203.9 million extension (without a player option!) and presumably use the $8.0 million room mid-level exception to sign Oubre. That means George and Drummond are the only two who are going into the Sixers’ cap space.

The Sixers could also take advantage of expanded salary-matching rules and look to flip Reed’s contract for a more expensive salary—they can take back up to $7.5 million more than they send out as long as they stay below the first apron. Staying below the first apron might be a challenge once they finalize Maxey’s new max deal, though. (Keep that in mind regarding any Dorian Finney-Smith trades you cook up over the coming days.)

They’d be better off spending the remainder of their cap space and then signing Martin to a 1+1 balloon deal with the intention of potentially moving him at the trade deadline. Signing him to such a deal would give the Sixers a way to upgrade midseason that they otherwise wouldn’t have. Again, the only risk here is if they hard-cap themselves some other way.

If not, the Sixers owners should be willing to foot a larger tax bill to improve their new Big Three’s chances of winning a championship. There are no more half-measures after signing George. The Sixers are all-in on winning now.

With some creativity, Martin—and his next contract—could help them do just that.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM.