Milwaukee Bucks’ “Dead Money” Looms Large On Salary Cap

Each season, the NBA gives teams a salary cap number they use to limit the amount of money they’re allowed to pay their players. The number is derived from many things, and is a primary way to even the paying field for small market teams like the Milwaukee Bucks.

Some leagues, like the NFL, have a hard cap that forbids teams from going over the set amount. The NBA has a soft cap that allows franchises to go over the number with certain penalties in free agency. After the soft cap is a second number the league hands out called the luxury tax. Teams are able to spend up to the luxury tax at their own peril and without any further consequences from the league. Once they go over the luxury tax, however, they must pay a tax on every dollar they spend. And if they are over the luxury tax multiple years in a row, the penalties continue to grow via a repeater’s tax.

Although the salary cap for the 2020-21 season is in ambivalence with the league on a COVID-19 standstill, the 2019-20 cap was set at $109.1 million.

In order to maintain their status as a championship contender, Milwaukee flew past that number last summer. They made a number of significant financial commitments including re-signing Khris Middleton ($30.6 million this year), Brook Lopez ($12.1 million) and George Hill ($9.1 million) while bringing in newcomers Robin Lopez ($4.8 million), Wesley Matthews ($2.6 million) and Kyle Korver ($2.6 million).

When it was all said and done, the Bucks had committed to $120.5 million in active players, well over the salary cap threshold the league set.

With the luxury tax set at $132.6 million, it initially appears the Bucks had a lot of wiggle room to work with before having to worry about paying extra money to the league. Unfortunately, poor personnel moves of past regimes continue to haunt them to this day.

For one reason or another, the Bucks have had to get creative to rid themselves of bad contracts and free up space for players who fit their vision moving forward. They’re currently paying a number of players a combined $9.7 million not to play for them; AKA dead money. That’s $9.7 million that counts against the cap and toward the luxury tax. And $9.7 million they can’t use elsewhere or on another player to help improve their on the court championship odds.

This current string of dead money began with Larry Sanders way back in 2013. After showing potential as a rim-protector and lengthy defender, he agreed to a four-year, $44 million contract with the Bucks that August.

Unfortunately, he only made it a year and a half into the extension before mental health and other issues forced him to step away from basketball. With his contract still on the books in 2015, Milwaukee and Sanders agreed to a buyout that allowed the team to use the stretch provision on him and pay him $1.9 million over the next seven years (lasting until the 2021-22 season).

Given that Sanders had three years left on his contract, the stretch provision allows the Bucks to pay him for double the remaining years plus an additional one.

In February of 2017, Milwaukee shipped Miles Plumlee (and his horrible contract they gave him) to the Charlotte Hornets in exchange for Roy Hibbert and Spencer Hawes. That summer, they needed to dip below the luxury tax and their most plausible way was to waive and stretch Hawes and the $6 million they still owed him. This put Hawes on the Bucks cap for three more years (ending in 2019-20) at roughly $2 million a pop.

Fast forward to last summer and general manager Jon Horst had some finagling to do to ensure Milwaukee could re-sign guys like Brook Lopez and Hill, while still improving their team with outside free agents.

He began the process by flipping Tony Snell and the 30th overall pick in the NBA Draft to the Detroit Pistons for Jon Leuer. The final step was to waive and stretch Leuer, meaning they’d have to pay him a little under $3.2 million in each of the next three seasons to not play for them.

Milwaukee also had to buyout Hill from his original contact, another $1 million, to re-sign him to a friendlier deal. Lastly, they waived Dragan Bender in February, still having to pay him his total annual salary of $1.7 million, in order to create room on their roster for the veteran Marvin Williams. Although these are separate situations that only apply to this season, they still get put into the dead money pool.

When it’s all said and done, the Bucks have committed $9.7 million to ensure guys won’t play for them. That’s a lot of cash for a franchise who may have traded away Malcolm Brogdon partly because they didn’t want to go into the luxury tax in 2019-20.

Fortunately, there’s some reprieve on the horizon. That number drops to $5 million in 2020-21 and 2021-22 with Hawes, Bender and Hill (only his $1 million buyout), all coming off the books. In order to continue playing with the big boys, the Bucks will need every penny they can scrounge up.