Time is money, and the Bucks only have so much time to decide what to do with their money...and shape the path of the franchise’s future in the process. Much and more has been made of the Milwaukee Bucks and the looming salary cap crunch that will hit this offseason. Their ceiling for the 2018-19 season is sky-high, but once the new league year starts the prospect of maintaining such a high ceiling feels like an order as tall as Giannis Antetokounmpo.

Bucks GM Jon Horst has, in less than two years, turned the franchise into a bona fide contender. He’s earned the nickname Jon Heist. He’s dodged bullets, excised demons, seized opportunities (large and small), and pulled off the impossible...and a franchise-defining task awaits him this summer. This does not – and should not! – take away from the joy that is the present-day Milwaukee Bucks, but for those of us trying to look ahead (which Horst certainly is), we need to steel ourselves for the upcoming crossroads.

Here’s a list of the core roster questions that need to be answered between now and next year’s training camp:

And depending on the answers above, the ultimate question becomes:

Giannis Antetokounmpo is eligible in the summer of 2020 for a supermax extension...y’know, the one that both Anthony Davis and Kawhi Leonard stated they would not sign, putting the league into a tizzy and fundamentally altering the power structure of the NBA. As loyal as he is, will he see what he needs to be willing to sign that extension, staying in Milwaukee long-term?

There is no indication that Giannis isn’t interested in sticking around. He very well may be the guy to break the current mold, but things change fast in the NBA. For example, maxing Khris Middleton might be the right move, but if you go through the comments you’ll find compelling arguments against such a move.

So today, instead of breaking down what the Bucks should or shouldn’t do, we want to better understand the environment these decisions will be made in. Context is king, so let’s run through the timeline and see if that helps with the larger discussion about the Bucks’ future. Determining who gets signed to what contract is an unknown, so let’s determine what known variables we’re working with. What are the important dates and details of the offseason?

The way things are going, this date will pass with little notice from Bucks fans, since the assumption is that Milwaukee will be playing deep into May, and possibly even June. However, this date matters because it is the effective end of the “trade moratorium” that started on February 7. Per Larry Coon’s always-excellent CBA FAQ (referenced heavily from here on out):

Teams are free to make trades again once their season has ended, but cannot trade players whose contracts are ending or could end due to an option or ETO.

All this means is that, between the end of a team’s season (whether they missed the playoffs before April 13 or are eliminated before the end of the Finals) and July 1, teams can trade players who have at least another season remaining on their contract. Historically, teams rarely do make trades this far away from the NBA Draft, but it’s worth noting that the option is available...if a willing partner is available and interested in someone like Ersan Ilyasova or Tony Snell, and they just can’t wait for the draft.

For the first time in a long time, Milwaukee will not pick in the middle of the draft. Currently with the best record in the league, it’s entirely likely that their pick lands in the bottom-5 of the first round because the order of all non-lottery picks (15–30) are set in reverse order of best record. It’s not impossible to land a major contributor at this spot, just incredibly unlikely.

The reason why this matters for the Bucks is that a player drafted this June will a) be under very inexpensive team control for up to 4 years, and b) take up a roster spot once signed, thus eating away at the team’s salary. A rookie drafted this late will at least be on-par with a veteran’s minimum-level contract, and the placeholder we’re going to work with is $1.934 million for now, and it’s possible that the salary cap hit is as much impact as the player actually has on the Bucks. They could get out from under this obligation if they simply trade the rights after the player is selected (thus circumventing the Stepien Rule), but this doesn’t seem likely or strictly necessary.

It has not been discussed for quite some time, but Malcolm Brogdon is technically still eligible for an extension to his contract. As a second round pick with three years with the same franchise, Brogdon is not subject to the rookie scale and has full Bird Rights (more on that later), meaning the Bucks can try to simply negotiate additional years onto his deal now before the beginning of the next league year. If a deal was struck, it could be as much as 4 years/$46 million, but since it hasn’t happened already, there’s little chance of it happening before July 1, since Brogdon could field offers higher than an $11.5M annual salary.

Here it is, the inflection point of the summer. The early-July period is as fascinating as it is hectic, as there’s a number of events that happen simultaneously once the bell tolls at midnight:

Players on expiring contracts officially become free agents, and negotiations can “begin.” (wink)

Players on multiyear contracts “roll over” to the next year of the deal.

Draft picks can be officially signed to contracts, and players can technically be signed to minimum-level contracts.

Restricted free agents can accept qualifying offers or sign offer sheets with other teams.

Players can be waived and claimed off of waivers, contract options and early termination options can be exercised, and teams can renounce rights to free agents in order to remove their cap holds.

The important thing to consider about July 1 is that non-minimum contracts and trades, as well as the 48-hour “matching clock” for RFA offer sheets, can not take effect until after the moratorium is lifted on July 6, so the NBA rumor mill works overtime over this six-day period. That said, don’t necessarily expect Malcolm Brogdon’s name to come up during the moratorium since his restricted status will likely delay most team’s targeting of his services next season. Why give Milwaukee more than 48 hours to determine whether or not they’ll match?

As it relates to the Bucks, George Hill’s partially-guaranteed contract would need to be waived by this date in order to reduce his cap hit from $18M to a paltry $1M. This is a near-certainty, as the Bucks will need to use that money to retain some of their starters, and Hill’s production is no longer commensurate with an eight-figure cap hit.

I’m glad you asked! The chart below includes the estimated salary cap, luxury tax line, and the tax apron line for the 2019-20 season.

Since the whole point of this exercise is to break down the topics into small chunks, let’s also define how these three things interact.

The salary cap is, simply put, the limit for how much money teams can use to sign players. There are certain exceptions that allow teams to go over the cap, giving franchises varying degrees of flexibility to build their rosters. These exceptions are why the NBA is said to have a “soft cap,” while other leagues like the NFL have a “hard cap.”

Teams are always able to sign their own first-round draft picks (called the Rookie Exception) or sign minimum-level deals (called the Minimum Player Salary Exception) regardless of their distance above the cap. Teams can also accept additional salary in return when making a trade (depending on their taxpaying status), as well as accept another player via a Trade Exception whenever they send out more salary than they take back.

For adding new players during free agency, teams also have the Bi-Annual Exception (which is how they brought in Brook Lopez), which is available every two years (meaning the Bucks won’t have theirs available until the following summer), and the Mid-Level Exception, which is available annually but at different levels for teams that pay the luxury tax and those who don’t. Most importantly, though, is the idea of Bird Rights (which comes in Bird, Early Bird, and Non-Bird varieties), which is an exception permitting teams to go over the cap to sign free agents of their own. It’s also important to note that, when traded, a player’s Bird Rights come with him, meaning that even Nikola Mirotic (who has yet to suit up for a game in Milwaukee) could be retained by the Bucks if they were willing to risk going into the tax.

Ah, yes, the luxury tax. This is essentially a financial penalty for teams that choose to use exceptions to exceed the salary cap, and the monetary penalty is enough to make most owners cautious. Not only does a salary cap figure above the tax line result in sizable payments (basically a giant pot that the league manages and gives up to half back to non-tax paying teams), but the higher you go, the higher the tax rate. Not only that, but if you pay the tax for consecutive years, you then enter into “Repeater Tax” territory, which is even more expensive!

The tax apron is where things get serious. Not only are you still paying into the luxury tax, but there are mechanical consequences too. Teams at this level cannot use the Bi-Annual exception, accept players in a sign-and-trade, and can offer less to restricted free agents (called the Gilbert Arenas Provision) or sometimes even not retain the ability to match an offer sheet at all. To top it all off, if you add a player using the non-tax payer Mid-Level Exception that also puts the team’s salary above the apron, that’s it. The team is effectively hard-capped for the remainder of that season, and cannot exceed that figure by any means.

Milwaukee has not paid into the luxury tax since 2003, and most recently decided to use the Stretch Provision on Spencer Hawes to avoid it in 2017. However, members of the Bucks’ ownership group have gone on record to state that they’re willing to go into the tax for a team that can compete, and this year’s squad is the first iteration of the Bucks that has actually looked capable of contention. Jon Horst has done an excellent job of keeping the roster below the tax line, but that streak looks like it will come to an end this summer.

In the figure below is included the Bucks’ current roster, their 2018-19 salary commitments, and the current commitments for 2019-20. Boxes in gray are “dead money,” yellow are non-guaranteed contracts, and orange are cap holds that only go away if the player re-signs or leaves for another team.

In the short term, things look great. The Bucks are under the tax line by just enough to bring aboard someone from the buyout market (if they choose to), and there is a ton of flexibility going into the offseason. But by looking more closely, we see the true costs of that flexibility, and how fundamentally difficult the front office’s job is in the summer.

Remember when we talked about Bird Rights? With the upside of going over the cap to keep your own guys, there’s the downside of “cap holds,” which are placeholder amount applied to a team’s salary cap for the time period between a player’s contract expiring, and that player either signing a new contract or the team renouncing their claim (cancelling both the Bird Rights and the cap hold). When Khris Middleton opts out of his contract this summer, his cap hit is not “zero dollars,” but the amount listed on the table above, which is determined by his years of service in Milwaukee, his current salary, and the rates detailed in the CBA.

For Khris (with his player option), Bledsoe, and Mirotic, the process is easy: either they get re-signed (and their cap hold is replaced with an actual salary figure), or they get renounced (removing the cap hold and the Bucks’ ability to go over the cap to retain them). The timing, however, is more difficult, especially when you add in the details of the situations for Brook Lopez (Non-Bird Rights) and Malcolm Brogdon (Restricted Free Agent).

Here’s when everything hits the fan. Non-minimum contracts can officially be signed. Trades can go through. The timer starts for restricted free agents’ teams to play the game of “Match or Don’t Match.” It’s going to be crazy, no matter how you slice it, because the Bucks have to decide the fates of five major contributors in less than a week.

Khris Middleton

Middleton is probably getting a max contract offer from someone. It is fair to argue that “Max Money” Middleton is not the best value, but it might end up becoming his worth on the free agent market, and depending on how negotiations proceed between Khris’ agent and the Bucks’ front office, it could become a bitter pill to swallow.

In the meantime, our goal is to simply explore what possible outcomes exist. With his cap hold ($19.5M), renouncing Middleton is only helpful if it’s clear that he will accept an offer that the Bucks are not willing to match, and even then it wouldn’t even bring the Bucks down to the level of the salary cap ($110.2M team salary vs. $109.0M estimated salary cap), resulting in precisely zero dollars’ worth of cap space. If the team decides to retain Middleton instead, his new salary would be slotted in place of his cap hold, and anything over $21.7M would push the team into the luxury tax. If Khris does get a max deal with the Bucks, which could start around $32M, then Jon Horst would have some serious work to do in order to keep the team below the tax apron. But (un)lucky for him, Khris is only one of many variables!

Eric Bledsoe

Described more than once as the Bucks’ second-best player this season, Bledsoe’s career is at an interesting crossroads. Teams enamored with his offensive dynamism and his defensive acumen might give him the “last big score” he’s probably looking for, whereas teams wary of his physical history (which has not been a problem in Milwaukee) and spotty shooting might be tighter with their pursestrings.

He fits in nicely with Milwaukee’s roster, but his cap hold ($22.5M) fits less well. Renouncing his rights would at least put the Bucks below the cap (by only $1.77M), but would create a gaping hole at the point guard position that the team wouldn’t have the cap space to resolve.

Nikola Mirotic

In theory, Mirotic is a perfect addition to the Bucks’ system. However, we have not yet seen how he actually fits in, and it’s possible his stay in Milwaukee is temporary. His cap hold ($18.75M) is not high enough that renouncing it would create any cap space, and while the Bucks have his Bird Rights, the contract Mirotic would command could push the Bucks over the tax apron, limiting their other options. Threekola will likely be in demand with teams looking for a capable floor-spacer, and at 28 years old it’s unlikely he’ll have another opportunity to cash in as much as he could right now.

Malcolm Brogdon

As a second-round pick who took a 3-year deal (instead of the customary 2-year), Brogdon is in an interesting situation financially, if he (as expected) does not reach an agreement to extend his current contract before June 30. As a veteran with full Bird Rights, there is effectively no limit to what the Bucks (or other teams) can offer him, except non-Milwaukee teams would need to use cap space to sign him whereas the Bucks can go over the cap.

However, Brogdon is also bound by the restricted free agency rules, meaning the Bucks have matching rights unless they rescind his qualifying offer (equal to his cap hold, only $3.02M), which they are highly unlikely to do since it would not significantly change the team’s salary structure until after a new deal was implemented.

Brook Lopez

The steal of last summer could be the steal of next summer. Brook Lopez’s puny cap hold ($4.06M) is a result of his surprise availability from Los Angeles, and his single year of tenure with the Bucks present an interesting conundrum for the Bucks. If they are over the cap and try to use his Non-Bird Rights to keep him, they are not able to offer more than his cap hold. Unless they somehow get far enough below the cap to use cap space, the only alternative to keep Lopez is to offer an MLE contract, and given the way things are going it’s likely they’ll only be able to offer up to the taxpayer MLE ($8.64M in 2018-19), which in turn could put them above the tax apron, thus locking in the roster at that exists at the point of signing that deal.

Yes, and given the mechanics of the CBA and the current environment, that may be the best course of action. It would not be easy, here’s how it’s possible.

As of July 1, the Bucks’ likely only action will be to have waived George Hill, which lets Milwaukee start this process just shy of the luxury tax. From there, negotiations with Middleton, Bledsoe, Mirotic, and Brogdon need to progress so that both sides understand what number (in both dollars and years) will get a deal done, while conversations with Lopez need to center around the Bucks’ lack of cap space and willingness to pay up to the full Mid-Level to retain his services. Of course, a priority should be to reach agreements at the lowest feasible figure, especially for Lopez, since the Bucks’ options for bringing him back are more limited.

Once everybody is on board with the plan, Lopez would need to be the first free agent re-signed, meaning that Horst would need to manufacture space below the tax apron if use the MLE is required. This could involve waiving the non-guaranteed salaries of two of Christian Wood, Sterling Brown, or Pat Connaughton, finding a trading partner for Tony Snell or Ersan Ilyasova that would return non-guaranteed money, or even using the Stretch Provision on Ersan’s contract (more on that later). Once the Bucks are roughly $9M below the apron, Lopez could be signed to his deal, and Bird Rights could allow the Bucks to bring back everyone else in virtually any order, provided they do not come to terms with any other teams.

One tricky variable is Brogdon and his status as a restricted free agent. If he signs a lucrative offer sheet, the Bucks may not be in a position to match, and depending on whether it happens before or after the moratorium is lifted, the timing could throw off the rest of the process.

But that’s it, in a nutshell. Stay below the tax apron, use the MLE on Lopez, use Bird Rights for the remainder of the Bucks’ free agents, and fill out the remaining spots with minimum-level deals. There are a thousand different ways that the team could add other players, but if the interest is in keeping this band together for an encore performance, the path to do so is relatively narrow.

The list of notable players likely to switch teams is relatively small, meaning there are a number of dominoes that will cause an avalanche of activity once they fall. Kevin Durant is speculated to be interested in departing Golden State, while Klay Thompson is not. Kemba Walker is largely expected to stick around in Charlotte, while Kyrie Irving has been making noise that Boston may not be for him. Overall, there’s a long list of players who will need new deals, and many of those will end up finding new homes. The Bucks, with their salary cap situation, will be unlikely to add anybody on a non-minimum deal, since they used their Bi-Annual Exception last year, will probably need to use their Mid-Level Exception on Lopez, and creating any meaningful cap space would require turning over at least two of Bledsoe, Middleton, and Mirotic.

If there are any last-ditch efforts to jump the Bucks through the hoops of the collective bargaining agreement for this season, this is the deadline. Players can be “stretched” after this date, but the player’s salary for that season would need to be paid in full, making it a far less useful option. For Milwaukee, the most likely possibility (which is still fairly unlikely) is that Ersan Ilyasova would get waived via the Stretch Provision, which could convert his guaranteed $7M salary in 2019-20 into three years of $2.33M and make him an instant free agent.

“But wait,” you ask, “doesn’t Ersan have two seasons remaining, not one?” Right you are, observant Bucks fan! However, Ersan’s 2020-21 salary is non-guaranteed, and the Stretch Provision only applies to guaranteed money. This is a crucial detail that makes waiving-via-Stretch a possible outcome for Ersan, rather than an unthinkable one, because of the impact it would have on the salary cap. Remember, the team is still paying Spencer Hawes through the end of 2019-20, and Larry Sanders through the end of 2021-22! Stretching a player is a last resort, but in Ersan’s case it could create over $4 million in room, depending on when the Bucks would hypothetically execute this strategy.

If negotiations with Malcolm Brogdon break down this far, both with the Bucks and with every other team in the league (which honestly is only likely if there’s some sort of injury involved), this would be the last point where he could take his $3.02M qualifying offer (same as his cap hold) and simply play out the next season in order to reach unrestricted free agency the following summer. This course of events is extremely unlikely, but technically possible.

D.J. Wilson and Donte DiVincenzo, don’t think we forgot about you! As the only two first round picks on the Bucks’ roster who are still on their rookie scale contracts, Wilson’s fourth year and Donte’s third year options must be exercised by the Bucks by Halloween, else they could reach unrestricted free agency sooner than expected. The odds of either of them not being retained on these deals are even lower than Brogdon accepting the qualifying offer.

If you made it this far, the Brew Hoop staff commends you for your persistence. Not everyone is willing to trudge through an unsolicited 4,000 word FAQ, but then again isn’t the journey it’s own reward?

No, probably not. So here’s what you should do: tell us what you think the Bucks should do in the comments! Is staying the course the right option? Should they find more creative solutions to build a contender? Were there any glaring errors or omissions that simply cannot stand? Tell us below, and stick around for the conversation.