Saving for the future?

[Alexander Wang <awang@mit.edu>]

It's interesting that the Celtics' three picks in 2001 have supposedly
turned them into a team that's more concerned about the future than the
present. In particular, if Fortson had been released instead of traded for
a low 2001 pick, we probably wouldn't be hearing any "analysis" of this
sort. In reality, I remember that Gaston evidently told Pitino that he was
tired of the patient approach. Pitino may have added a low 2001 pick this
offseason but he is surely focused on the present.

Regarding the future though, I've taken a look at the salary structure of
the Celtics. Peter May always makes a big deal about how the Celtics are
over Gaston's supposed budget. My guess is that Gaston has a yearly average
budget in mind that may actually be what he said (cap + two exceptions)
rather than a hard cap every year. In the first few years, I believe Pitino
was actually under budget, due to Kenny Anderson's salary being partially
paid by Paul Allen. This year, we are definitely over due to the
artificially deflated cap. Next year we will probably be in line again. 

Here are some relevant salary notes: 
- Walker is entering the second year of his large extension and will be
getting roughly $10M. 
- Pierce is entering his third year; the Celtics will or might have already
exercised his option for a fourth year at the rookie scale. After that the
Celtics will probably have to shell out major bucks. He can be extended
during the next offseason but he is on the books for small bucks until 2002. 
- Battie's six-year, $25M extension kicks in starting this year. So in fact
he hasn't really been so overpaid - he's been making rookie money up til now.
- Potapenko is also entering the second year of his extension, which
averages $5.5M per year.
- Kenny Anderson is on the books for another three years. His contract
averages $7M per year and it's probably backloaded so we're paying him more
than that over the next three years.
- Eric Williams' contract doesn't expire until 2004. It probably averages
around $5M for the rest of the contract.
- Other than that, it's relatively small salaries: Randy Brown at the $2M+
exception for three years, McCarty at roughly $3M per year for two more
years, Cheaney at the $2M for another two years.
- Next year, Minor, Pack, and Hot Rod will come off the books.
- Griffin's contract expires but he'll be eligible for the Early Bird
exception, and we may have some sort of right of first refusal also. The
question is, will he be worth $4M/year, say?

So at the end of the season, we're looking at something on the order of:
Walker	11
Anderson	8
Potapenko	5
Williams	5
Battie		4
Brown, Cheaney, McCarty, Pierce, Moiso:
		11		

The total looks like about $44M. The supposed budget should be at least
that, but it may not leave much room for another exception player
(supposedly at around $4M next year) as well as three draft picks. This
analysis also shows why keeping Fortson would have been tough.

The next season (2002) we'll need to start paying Pierce, but that'll be
partially offset by Cheaney and McCarty coming off the books. And the year
after (2003), Anderson's contract expires, as does Randy Brown's, so that's
$10M in salaries. Hopefully they'll be able to find a decent, and
undoubtedly cheaper, replacement by then either through the draft, or the
exception. 

So if Gaston is really serious about his budget, we are currently OK but
may not be able to add an exception player next summer (and the summer
after) without additional changes, especially with three first-round picks
coming aboard and Griffin due for a raise. The other issue is roster spots:
we have 10 committed above thru 2002. If Blount is even half decent we'd
probably exercise the option for the minimum. If Griffin is retained and
three draft picks are kept, that's 15 spots already. Chris Carr may do
enough to keep his roster spot too. In any case, things are overcrowded and
we really don't need to be 15 deep with backup quality players -- we need
more starter quality instead.

Another point is that the escrow put in place in the current CBA will kick
in at some point, which means that the effective cost of these salaries
will decrease by 10%. That could mean a savings of $4-5M for us, which
would more than pay for a player at the exception.

So it seems to me that the Celtics will not have a financial problem
keeping the current core together. We're not in a position where we have to
trade players to avoid the luxury tax. On the other hand, we're also not in
a position to do trades that significantly increase the future salary
structure, although we are probably OK in terms of paying draft picks and
adding exception players. We don't have the roster spots or playing time to
necessarily accomodate these additions though. However, the acquisition of
Abdul Wahad would have added a significant long-term salary without
shedding other long-term salaries so maybe the budget is more flexible than
it seems.

I do think, with the focus on the present and the current crowded roster,
that we'll see a trade involving a 2001 draft pick or two as well as
players like Cheaney, McCarty, and maybe Pack, for some sort of immediate
help, either before the season or around the deadline. These salaries all
expire in the next two years and a team on a rebuilding direction would
probably find the package relatively enticing. 

Alex