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How Lowry, Ibaka Deals and Maintaining Status Quo Impacts Raptors

Locking up Lowry and Ibaka should extend Toronto's competitive window another three years. But a lack of cap space will make it difficult to push the ceiling any higher during that stretch.
Photo by Dan Hamilton-USA TODAY Sports

Facing down one of the most important and difficult decisions in franchise history, the Toronto Raptors opted for the certainty of being good over the uncertainty of being bad and then maybe being good again later. The choice between remaining competitive with a core that tops out somewhere below championship contender and blowing things up for a better theoretical shot somewhere down the line was not one the Raptors took lightly. In the end, they decided a few more years tacked on to the best run in franchise history was worthwhile.

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It's easy to see the logic. Tanking is painful, and with a half-dozen teams in the Eastern Conference already setting up to beat the Raptors to the bottom, there may have been a sense that they wouldn't have been able to get bad enough fast enough. It's a five- or six-year trek through the wilderness if things go well, and it can run longer and more depressing if they don't. While LeBron James still exists in the East, that may not be true for more than another year, and the conference's other threats are either timed for a run a bit later down the line or still question marks themselves.

The Cavaliers and Warriors and Rockets exist—Golden State has very clearly shifted the NBA landscape, both in terms of competitive balance and market aggression—but there will always be impediments, and the Raptors at least know right now they can win 50-55 games and probably a playoff series for the next few seasons.

How they get better with this group is a pretty difficult question, and in extending the window by three years, Raptors president Masai Ujiri has started a bit of a clock on himself. In giving Kyle Lowry a three-year, $100-million deal and Serge Ibaka a new contract for three years and $65 million, Ujiri and the Raptors have committed some $248.2 million to their core trio over the next three seasons. The new deals for Lowry and Ibaka line up with a player option year for DeMar DeRozan, who last offseason inked a five-year, $139 million deal to stay in Toronto.

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There's a pretty clear line of demarcation following the 2019-20 season, when Lowry and Ibaka will be free agents and DeRozan can opt out. Lowry will be 34 then, Ibaka 30, and DeRozan 31 sometime that summer. The Raptors will likely have made the playoffs in seven consecutive years, Lowry and DeRozan will have ascended to form a holy triumvirate of historical Raptors figures with Vince Carter, and the pivot foot that Ujiri has long maintained will move the team in a different direction.

It makes sense. Toronto avoided giving out four- or five-year deals this summer, a win regardless of the annual hits for Lowry and Ibaka, limiting the downside here. But this is it.

The Raptors have committed a lot of money and flexibility to a top-heavy trio, because the NBA and collective bargaining agreement more or less demand as much if you're going to be competitive. By capping those deals on term, they're moveable in the event they want to take steps backward earlier. Making moves to fortify this group is going to be incredibly difficult, though, and it's becoming more clear by the day why the Raptors have put a major focus on player development.



The Raptors will face some harsh realities during this window to compete, and tough fiscal decisions are going to have to be made. What follows is a rough look at their situation for the next three years.

2017-18

Winds are already blowing that the Raptors want to shed salary. Any of Cory Joseph, DeMarre Carroll, or Jonas Valanciunas could be on the move. This isn't because the Raptors are out of cap space (they are) but because they stand, as currently constructed, to have an exorbitant luxury tax bill. Ujiri has said he has permission from ownership to spend into the tax, but doing so egregiously for this team probably isn't the best use of his trips to the boardroom. They need to get the tax number to a reasonable spot.

It has little to do with the players. Joseph is well-liked and among the best backup point guards in the league. But his replacement is already on the roster, and he may be able to net Toronto a draft pick in return. The team is stocked with centers and Valanciunas would bring the most fiscal relief by heading out. The market for centers is also exceptionally cool. Carroll has fallen on hard times and may require sending out picks to find a home for him, which is a difficult price to pay when finding and developing talent on the back end is going to be so important in the next few years.

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Something will break here, though. Based on some assumptions and estimates for the Lowry and Ibaka deals, the Raptors could get under the tax by dealing Carroll or Valanciunas, while Joseph would only limit the hit. They still have a 15th roster spot to fill, and if they're in cost-cutting mode, using the taxpayer mid-level exception wouldn't seem likely. Unload a big contract and the non-taxpayer mid-level comes back into play, a more useful tool for rounding out the roster.

They have to move someone. It hurts to more or less give good pieces away, but it's exactly why Ujiri has kept a stockpile of decent prospects ready to step into larger roles, and it's a reality of paying three very good players market value at the top. This is the year to trust the younger players, even if it's occasionally painful.

2018-19

Think this summer is bad for a cap crunch? Consider this: If the Raptors don't dump any salary, they'll enter next summer with $123.7 million committed to nine players (assuming rookie options are picked up and Cory Joseph declines his player option), already a hair over the projected salary tax line. That means filling the roster out with exceptions, trades, and more low draft picks (the Raptors own their own first-round pick and the lesser of the Magic/Lakers second-round picks next year).

Worse still: Norman Powell will be a restricted free agent, and competing teams who have saved their cap space (hi, Brooklyn) will almost surely come with a major offer. Powell is eligible for an extension after July 15 this summer, but the rules covering extensions are such that he'll almost surely wait to test the market. Lucas Nogueira, Fred VanVleet, and Bruno Caboclo will also be restricted free agents, potentially costing the team some inexpensive depth.

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Maintaining the status quo isn't a bad thing. Photo by Jeff Swinger-USA TODAY Sports

At this point, Carroll would be a large expiring contract, and the new cap realities should return us to the point of expiring deals having some market value. If all goes well, OG Anunoby could be ready for a bigger role by this point, anyway.

2019-20

There's finally some breathing room here, maybe. Carroll's contract expires and Valanciunas can opt out (not a sure thing if the market for centers continues as it has). If Valanciunas opts out and rookie options are picked up, the Raptors would have $95.2 million committed to seven players, with Delon Wright a restricted free agent. That's a bit more comfortable a number, but it doesn't include any deal for Powell the year prior, and it leaves them with half a roster.

This year is very interesting depending on how things go the two years prior. Because while the Raptors have clearly committed to extending this thing for the next three years, Lowry, DeRozan, and Ibaka will all be pretty moveable in this season. If things plateau or, worse, take a step back in the next two seasons, the Raptors could turn 2019-20 into Year One of the teardown they've now kicked down the road twice since James Dolan changed everything.

The status quo made sense given the value to the franchise of remaining a quality team, given the shifting (and emptying) tides in the East, and given the lack of back-end risk Toronto ultimately had to attach to keep things together. The new television deal that sent the salary cap soaring last year has changed the market, overspending in 2016 has dampened the market so far this summer, and a good chunk of the league figures to be in the luxury tax sometime in the next two years.

The Raptors can start with these two in their efforts to dump salary. Photo by Dan Hamilton-USA TODAY Sports

The Raptors want to prop the window open longer, and that's more than fine. They'll be good. And fun. The reality of doing so, though, is that tough decisions are going to have to be made while surrounding that core. And in terms of upside, there aren't going to be many great means of adding another significant piece—the Raptors will have to strike gold on the exception market, develop their young players at an even faster rate, and hope someone—Anunoby, a late pick in another year, maybe even Caboclo—outshoots their expectation.

Locking up Lowry and Ibaka will keep the Raptors good for a while longer. But it might take some cap gymnastics, strong player development, and maybe some trade wizardry to push the ceiling any higher during that stretch.