December 15 is known as the unofficial start to NBA free agency as the season’s newly signed players become eligible to be traded. The Pistons decided to use that time to maneuver through their cap sheet, including waiving veteran center Paul Reed and re-signing him two days later to a veteran minimum deal. In between, they signed Motor City Cruise wing Javante McCoy to a guaranteed contract and then waived him within 24 hours.
Why did they do all this? To create $4 million in additional cap room they can use to absorb salary in any future trades leading up to the deadline. The answer, in the end, is always NBA cap math.
But let’s take a step back. What the hell just happened that saw the team make a bunch of moves only to wind up, roster wise, exactly where they started?
You see, Paul Reed was working on a fully non-guaranteed deal of $7.7 million this season. Having a third-string center making $7.7 million is not ideal, but Reed is a solid NBA player. If a team needs center help, they know to call Detroit.
At this point, no trade for Reed had materialized and every day Reed is making that large salary a little bit of cap space gets shaved off of Detroit’s books. So the Pistons decided it was time to waive Reed and create as much cap space as possible as trade season got underway.
The only wrinkle was timing. By waiving Reed, the Pistons fell under the salary floor by roughly $1.4 million. Teams under the salary floor would not receive a share of luxury tax revenue, which is a significant amount of money. So the Pistons then needed to sign a player knowing he’d be waived, and selected McCoy, who gets a few days of bonus money for his trouble as he will get paid for his one day under contract and his two days spent on waivers before he clears.
Then the Pistons re-sign Reed to the veteran minimum, which takes his salary from a prorated $7.7 million to a prorated $1.4 million. Reed agrees to stay — he seems to like Detroit and knows if the team trades him it would at least be to a contender.
The team, in turn, saves roughly $4 million and instead of having $10 million in available cap space now has $14 million.
Also, as cap expert Keith Smith notes, the Pistons also have their full $7.9 million room exception to use to absorb a salary.
The Pistons could be active players if teams look to cut veterans as they hope to move under punitive tax thresholds, or the Pistons could be a convenient dumping ground if any larger multi-team trades involving star players ever materialize. The Pistons are the only team with significant cap space at the moment.
This now concludes a pretty rough and tumble lesson in NBA cap economics. Welcome back, Paul Reed. We missed you.