Breaking Down Cavs’ Offseason Ahead And Major Cap Crunch That Awaits

The Cavaliers delivered one of the most successful regular seasons in franchise history, finishing 64-18 and staking a claim as a top-tier contender in the Eastern Conference. But like so many times before, April and May told a different story.

Despite ranking in the top eight in both offensive and defensive efficiency and logging the league’s second-best record behind only Oklahoma City, the Cavs faltered in the second round.

Indiana exploited a battered Cleveland roster, topping 120 points in three of four wins and exposing a defense that suddenly couldn’t get a stop. The Cavs, who were eighth in defensive efficiency during the season, posted the worst mark of the eight playoff teams remaining.

Injuries to Darius Garland, Donovan Mitchell, Evan Mobley and midseason acquisition De’Andre Hunter didn’t help. But in this league, you don’t get extra credit for being banged up. The result was another second-round exit — and this one, unlike last year’s loss to Boston, comes with massive financial consequences.

Cap Crunch Coming

Cleveland enters the offseason an estimated $30 million over the luxury tax line and $13 million above the NBA’s punitive second apron. The result: a projected $57 million tax bill — the largest in franchise history — and a laundry list of restrictions.

The Cavs can’t aggregate salaries in trades, include cash in deals, or sign players waived with preexisting salaries over $14.1 million.

Why push that far into the tax? It’s the price of going all-in. Mitchell and Mobley signed long-term extensions. Hunter was acquired at the deadline as a pre-apron maneuver. The top six players are under contract, and only four roster spots remain open. But keeping even role players now comes at a steep cost.

Jerome the Bellwether

No player better illustrates the new calculus than Ty Jerome. After missing almost all of 2023-24, Jerome reemerged with a vengeance, finishing second in Sixth Man of the Year voting and averaging 12.3 points on 52% shooting — including 43% from deep — over 70 games. He was a +11 per 100 possessions and poured in 16.2 points per game in the first-round win over Miami. Then came the letdown against Indiana.

Still, Cleveland holds early Bird rights and could offer Jerome up to four years and $64 million. But a $14.3 million salary would trigger an $80 million tax penalty. That’s not a typo. Eighty. Million. Dollars. It’s why the Cavs may have to pivot to using only the veteran minimum exception to fill the bench.

Next in Line for an Extension

While Mitchell and Mobley are locked in, eyes now turn to Garland. He’s eligible starting July 8 for a two-year, $128.4 million extension — and though he played through a toe injury, he was one of just four players to average 20 points and five assists on 39% 3-point shooting.

He also led the league in clutch-time plus-minus. If healthy, he’s worth the commitment. If not, he’s another expensive variable.

Other extension candidates include Sam Merrill (through June 30), Dean Wade, Max Strus, and Hunter (as of Oct. 1).

Needs and Assets

If Jerome walks, the Cavs will need guard depth — badly. They also need a rotational big behind Mobley and Jarrett Allen. Development from Jaylon Tyson, a former first-rounder, would help offset roster inflexibility.

Cleveland holds picks No. 49 and 58 in June’s draft. But with future firsts heavily tied up (they owe unprotected picks in 2027 and 2029 and have swaps in 2026 and 2028), they may only have one last shot to trade a first — either in 2031 or 2032 — before restrictions kick in for second-apron teams.

Final Word

The Cavs have built a winner. Now they have to keep it together — and that’s where the real challenge begins. Winning 64 games is great. Paying a $57 million tax to do it again without a deeper playoff run? That’s where things get tricky.

Welcome to the NBA’s new economy and the Cavs’ attempts to make things work within its guidelines. It’s doable, but a great challenge nonetheless.