The exhilaration of winning an NBA championship now turns to an offseason of uncertainty for the Toronto Raptors.
That uncertainty starts with Toronto and the entire league being in a holding pattern waiting on Kawhi Leonard's free-agent decision. Will he return to a Toronto team that could be favorites to repeat as champions? Or will Leonard leave and force the Raptors to choose between retooling and rebuilding?
Let's look ahead to the free agency, draft and trade decisions facing Toronto this offseason.
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Waiting on Kawhi Leonard
The in-house recruiting that started the morning of July 18, when Leonard was acquired, now turns to the waiting game.
Yes, the Raptors will go through the formality of meeting with their franchise forward at the end of June. There will likely be a second meeting on the first day of free agency to reconfirm Toronto's best case for Leonard to stay.
"I'd rather have the free agent in my building or in our organization for one year rather than a one-hour pitch," Raptors president Masai Ujiri told ESPN's Get Up! in February. "I don't know how much of a chance we have with a one-hour pitch, but you have him for one year, he can deal with your culture, he can know what the organization is about, you can develop a relationship with him -- and we are developing a relationship with Kawhi and I think he's enjoying the organization. I think even medically, that's been huge for him -- getting better and getting back to the level he was a couple years ago."
With Leonard and rising star Pascal Siakam, Toronto would have two foundational pieces in place for the foreseeable future. Outside of free agent Danny Green, Toronto would return four starters plus reserves Fred VanVleet, Norman Powell, OG Anunoby and Serge Ibaka.
There's no doubt that Toronto can make a strong case for repeating as champs next season. But the front office will have to sell that it can reshape a roster that will see Kyle Lowry, VanVleet, Ibaka and Marc Gasol (if he opts in) enter free agency in 2020. The Raptors could flip one of those expiring contracts or enter 2020 with up to $60 million in room. As seen through the Leonard trade, identifying talent in the draft, development of their own players and the Gasol deal at the deadline, the Raptors can point to their strong history of crafting this roster with smart maneuvers.
However, what happens if their lead architect in Ujiri leaves before he even gets a chance to pitch Leonard on staying? As ESPN's Adrian Wojnarowski reported, the Washington Wizards will ask Toronto for permission to interview Ujiri to run their basketball operations department.
Would Leonard have faith in the front office without Ujiri? Toronto could be faced with losing the two most important people in the organization -- Ujiri to the Wizards and Leonard, perhaps, to the LA Clippers.
The contract
The opportunity to sign a $221 million contract vanished in mid-July when Leonard was traded. That supermax extension is now replaced with a five-year, $189.7 million contract, the most that the Raptors can offer. When it comes to the structure of the contract, the negotiations will come from Leonard and his representatives. The Raptors' front office will basically tell Leonard to pick his desired amount of years, ranging from one to five.
While there is a case for the forward to sign a three-year, $106 million contract with a player option after the second year -- thus allowing him to enter free agency in 2022 when he will have 10 years of service -- the short-term deal comes with significant risk. After missing all but nine games in 2017-18 and seeing his workload heavily monitored this year, Leonard would be leaving $82 million in guaranteed money on the table.
Here is the contract breakdown for Leonard staying with the Raptors vs. signing elsewhere with a cap-space team:
Taking into account the possible $221 million extension he could have signed if he had stayed in San Antonio and what he could earn with the Raptors, Leonard will lose $80 million in guaranteed money by signing with a team that has cap space.
Financial implications toward the roster
There has been no shortage of a commitment from Raptors ownership when it comes to spending. With a top-five payroll and $25.3 million luxury tax penalties this season, Toronto is willing to spend if the on-court product can justify the cost. Signing Leonard to a max contract with Gasol opting into his $25.6 million salary leaves the Raptors with $144.8 million in salary, $13 million above the tax threshold.
Green's free agency will dictate the severity of Toronto's tax payments if this core returns. Even projecting a conservative $12 million annual deal, Green becomes expensive to retain.
*Remaining roster spots signed with the minimum exception.
**Signing Green to a $12 million annual salary would cost Toronto an additional $40.9 million toward the tax. Essentially, the shooting guard turns into a $51.4 million player in 2019-20.
In the scenario that Gasol opts out and Green is signed, Toronto is still over the luxury tax.
What's next if no Kawhi?
Any time you lose an MVP-caliber player for nothing, there will be a domino effect on the roster. What direction the Raptors take will be based on their confidence level in this team competing without Kawhi -- which returns seven players and went 16-5 with Leonard out.
Here are three options for the Raptors if Leonard walks:
1. Do nothing (for now)
Without Kawhi, Toronto would still be in a mix for home-court advantage in the East, but a Finals trip would likely be off the table. Assuming Green becomes too expensive to justify keeping on this retooling roster, Toronto would be right at the salary cap, with the $9.2 million midlevel, $3.6 million biannual and minimum exceptions available to use in free agency.
Playing out the season without making any major moves would leave Toronto with $86 million in room in 2020.
2. Find trade value for Lowry, Ibaka and Gasol
How will the rest of the league value these three players with an average age of 32 and an average salary of $27.1 million in 2019-20? Toronto might find the trade market lukewarm.
Despite their past accolades, teams would view each player as a rental, making it difficult for Toronto to get a real first-round pick in return.
There's also the inability to match salaries. With nearly half the league hitting free agency, finding a trade partner that comes within 125% of each salary presents a challenge. In the case of Lowry, teams would have to send back $28 million in contracts. As Memphis found out this season with the $30.5 million contract of Mike Conley, making the finances work when trading large salaries is tough, even if a deal makes basketball sense.
Toronto would have the option of targeting teams with room that miss out in free agency. For example, does Gasol make sense in Sacramento in exchange for a lottery-protected first?
3. Trade for contracts that extend into 2020-21
This approach would signal a clear rebuild, similar to how Cleveland took on some long-term salary after LeBron James left in order to acquire more draft assets.
Unfortunately for the Raptors, there just aren't that many dead-weight contracts extending past 2019-20 out there. Heading into the offseason, only 58 players who earn more than $10 million have guaranteed salary that extends past 2020-21. For comparison, there were 105 players this season that met the same criteria heading into 2019-20. That drop-off is due to the bloated contracts signed in 2016 expiring next summer.
Extension options for Pascal Siakam
Despite the breakout forward being eligible, Siakam should not get an extension this offseason -- or the Raptors should at least think twice before exploring a new contract.
Siakam is certainly deserving after going from developmental project to borderline All-Star. But the decision for Toronto will come down to finances.
Because the power forward was drafted in the late first round (pick No. 27), Siakam will have a $7 million cap hold in 2020 -- a projected $22 million less than where his max salary would start. With $91 million in expiring contracts, Toronto is set up to have between $69 million and $86 million in cap space in 2020 (without Leonard on the books). Signing Siakam to an extension would cut into that number significantly.
In the scenario that Leonard returns, holding off on an extension leaves the Raptors with $35 million to $50 million in room.
Summer cap breakdown
Until there is a resolution with Leonard, Toronto will be in a holding pattern with its finances. If Leonard returns, Toronto will have $145.4 million in committed salary -- $14 million over the luxury tax with Green still unsigned. The team would have the $5.7 million tax midlevel exception and minimum contracts available.
Leonard signing with another team would leave Toronto over the cap with $113.6 million in salary and the $9.2 million midlevel and $3.8 million biannual exceptions available. The Raptors would still have the option to bring back Green and exceed the cap. If Gasol opts out of his contract and Leonard does not return, Toronto will have $20.1 million in room.
Resources available to build the roster
Cash to buy draft picks
Own free agents
Cap exceptions: minimum, tax midlevel and four trade exceptions
Dates to watch, restrictions and extension candidates
• This is more of a formality, but expect Leonard to opt out of his $21.3 million contract for next season. Leonard has until June 27 to opt out and become an unrestricted free agent.
• Gasol has until June 29 to decide on his $25.6 million player option. For Gasol to opt out, his agent, Steven Heumann, must find a likely landing spot at a comparable starting salary or a multiyear deal that gives Gasol long-term security at a lower annual number (think two years, $40 million). Outside of Toronto, the market for Gasol could include the Hawks, Mavericks, Clippers, Lakers and Kings.
• Once again, Patrick McCaw is a restricted free agent. After a lengthy holdout last year in Golden State, McCaw signed an offer sheet with Cleveland in late December, only to be waived on Jan. 6. Because the guard has three years of service, Toronto can elect to tender him a $1.87 million, one-year qualifying offer by June 29.
• Former two-way players Chris Boucher and Malcolm Miller have $1.58 million contracts with upcoming guarantee dates. The Raptors have until July 24 to decide on Miller and until the first regular-season game for Boucher.
• To offset the finances as part of the Leonard trade, Toronto received $5 million cash from the Spurs. As a result, the Raptors are restricted from receiving cash in a trade until July 1.
• Lowry, Ibaka and Gasol (starting Aug. 7 if he opts in) will become extension eligible, but expect Toronto not to conduct talks on new contracts.
The draft assets
For a second consecutive June, Toronto will not have a first-round draft pick (having used this year's in the Leonard trade).
Here's how ESPN's Jonathan Givony and Mike Schmitz have Toronto selecting:
No. 59 (own): Marcos Lousada Silva | F | Franca
The Raptors own all their future first-round picks after 2019.