With all the talk about what to do with Kendrick Perkins and where the Thunder is headed this offseason, it's first important to understand exactly where they sit financially.
Last season's NBA Salary Cap was $58 million, but the tax level was $70.3 million. We'll assume the same figures for next season.
Thunder's cap this season was $68.92 million, so approximately $1.08 million shy of paying the tax.
Once you deduct Martin, Brewer, Fisher, Liggins and Orton's salaries, OKC's cap is at $52.98 million.
But of course, you have to add salary increases. So take that $52.98 million and add raises for virtually everyone else on the roster.
Once you factor in all the monetary changes for next season, OKC's new cap number is $66.1 million. Assuming the luxury tax remains at $70.3 million, the Thunder will be about $4.2 million shy of paying the luxury tax.
If the Thunder decides to amnesty Kendrick's contract ($8.48 million), they would sit at $57.6 million. That's only about $400,000 shy of crossing the cap ($58 million).
With that said, it's time to talk about ways around this problem: cap exceptions.
The NBA's new collective bargaining agreement essentially pressures franchises into re-signing its own players rather than going after high-priced free agents.
Part of the CBA is that the salary cap is soft. In other words, there are ways to exceed it. These are called cap exceptions, and anything the Thunder wants to do in the offseason is going to be through one of these cap exceptions.
This allows NBA teams to go over the salary cap by signing a "mid-level" free agent for essentially a "mid-level" salary. In the Thunder's case, it would be signing a free agent (or two) whose base salary would be $5 million for four years.
Larry Bird Exception:
Named after the legend himself, the Larry Bird exception allows teams to exceed the salary cap in order to sign its own players.
This goes in line with the fact that the NBA is trying to eliminate "superteams" like the Miami Heat from forming in the first place. The NBA wants to give franchises the edge when it comes to re-signing its own players, in turn creating a more loyal environment for fans and eliminating scenes like post-LeBron Cleveland.
To qualify for the Bird exception, a player must have played three seasons with his current team without getting waived or traded, or have changed teams via trade (like Kevin Martin).
Minimum Salary Exception:
Teams can sign free agents to minimum contracts for up to two years even if they're over the cap.
So here's what it boils down to. If Oklahoma City doesn't amnesty Perkins, it won't be able to afford to re-sign Kevin Martin without entering the luxury tax. Nor will it be able to sign anyone to a mid-level exception because that would also send them over the tax. It will rely solely on the emergence of Jeremy Lamb, Perry Jones and whomever they draft this summer.
(Just a note, OKC could always enter the tax, but has clearly shied away from it in the past.)
If the Thunder does amnesty Perk, the options will be limited but there will at least be SOME flexibility via cap exceptions.
Amnestying Perkins would help – but not that much.
Of course, this all could have been avoided had Perk not received that four-year, $34.8 million extension in 2011. Without Kendrick's $8.48 million on the books, OKC could have afforded (barely) to squeeze James Harden under the tax.
But in the here and now, it's up to owner Clay Bennett to decide if he wants to pay roughly $17.5 million (Perk's salary over the next two seasons) out of his own pocket to free up just a little bit of cap flexibility.
The thing Bennett must realize is that he'll be paying Kendrick that money either way; that's a given. The only logical reason for OKC to not amnesty Perkins is if they think he can still contribute to the team in any way. From what we saw this season and in the playoffs, the answer to that question is pretty clear.
And there's numbers to back that up. According to basketballreference.com, Perkins finished the postseason with a Player Efficiency Rating of -.7. That's the lowest PER of ANY player in the HISTORY of the NBA Playoffs to play at least 200 minutes. That stat ranges all the way back to the 1946-47 season. He is literally the worst.
The Thunder would be better off drafting Mason Plumlee or Kelly Olynyk, two athletic and mobile bigs, and running one of them out there instead. While either guy would take time to develop, either would be upgrades over perhaps the worst player in the NBA.
Or, the Thunder could package its No. 12 pick with its late first-round pick and move up a few spots for a Cody Zeller or Alex Len.
Regardless of what OKC decides to do, it will have to acquire another post player before next season's playoffs. Whether it's via the mid-level exception, the draft or a trade, this team needs another body in the post. Perkins has proved he isn't the answer.