Tax Payers, Trade Kickers, And Other Deadline Day Bookkeeping
February 26th, 2011
|He looks happy. And why shouldn’t he.
That was one of the most interesting trade deadline weeks you’ll ever see.
Fourteen trades, one kind of funny near trade, 50 players traded, 3 players signed, 4 players waived, 16 draft picks traded, 1 rights to swap traded, and two absolute Stone Cold Stunners of trades that no one expected. And these weren’t trades like Sam Cassell and cash for a 2016 top 55 protected second rounder, either. These were trades that changed teams significantly, and altered the landscape of the entire NBA.
(Well, except for the Marquis Daniels one.)
Superstars Carmelo Anthony and Deron Williams were dispatched from teams they didn’t want to stay with. Shane Battier and Mo Williams were dispatched from teams they didn’t want to leave. Draft busts Brandan Wright and Hasheem Thabeet were shipped for minimal returns; recently drafted rookies Derrick Favors and Jordan Crawford were shipped before even completing a season. And while my T.J. Ford for Dan Gadzuric idea never got done, Gadzuric did move to the New Jersey Nets, where he can grab as many rebounds as Brook Lopez in a third of the minutes.
New York and New Jersey made the two biggest moves by acquiring the two All-Stars, Williams and Anthony. The Knicks finally closed the deal on the Anthony saga, their additional acquisition of Chauncey Billups and their retention of Landry Fields keeping the price tag just about on the right of ‘acceptable.’ Meanwhile, the Nets’s genuinely staggering trade for Williams, whilst ultimately a backup plan, turned out to be better then their original plan. If their intention was to chase Melo for half a year, then give up and trade less in a deal for a better, cheaper player with less mileage on the clock, then they pulled it off beautifully.
Cleveland finally did something with their angry owner’s willingness to spend, taking on Baron Davis’s exorbitant outstanding salary, and getting a top 10 pick for their troubles. The upcoming draft is going to be truly bad – we’re talking 2000 calibre bad – but nevertheless, every draft has talent in it. Even the crap ones. Cleveland, who inevitably have to build through the draft, is right to trade into it, as long as they are sure that Baron’s salary proves not to be prohibitive down the road. Meanwhile, L.A. ends the entirely unproductive B-Diddy era, and opens up $6 million in 2012 cap room. Why a team with 2012 cap room aspirations decided to sign Ryan Gomes to a contract that will pay him $4 million that summer is not immediately clear, but it’s too late to change that now.
Houston’s trade of Aaron Brooks to Phoenix in exchange for Goran Dragic and a lottery protected first-round pick represents quite a decent return for a man whose value has imploded this season. In freefall from his 19/5 averages last season, Brooks lost his starting job to Kyle Lowry, didn’t take it well, and has crawled to a 11.8 PER. If you’re a fan of win shares, note also that Brooks has thus far recorded only 0.2 of those puppies this season, quite the collapse from being a near 20 point scorer last season. The same could be said of the value of Dragic – one of the game’s best backup point guards last season, Dragic has struggled mightily this season, turning the ball over at an enormous rate and rocking a true shooting percentage of only .492%. Nevertheless, Dragic has a team option on his contract this summer, which, if declined, will see him enter restricted free agency. If Houston has Dragic in their long term plans, it might be worth considering declining the team option and retaining him long term for a cheap price while his value is low, rather than having to pay him in the summer of 2012 when he may have rebuilt his value and is no longer restricted. A Carlos Boozer-type situation seems unlikely.
(Also note: while such a conclusion is obvious, this does not automatically fuel a Steve Nash trade. Only Steve Nash fuels a Steve Nash trade now.)
In trading James Johnson to Toronto, Chicago somehow managed to somehow obtain a first-round pick for a player they drafted in the mid-first round, then never played, and whose valued they crucified. It’s the Thabo Sefolosha all over again, with one subtle difference; benching Johnson behind Luol Deng and Kyle Korver is entirely justified, while making Thabo sit for Adrian Griffin and Chris Duhon was not. Toronto takes a worthwhile shot at a player with size, athleticism and talent, who hasn’t learnt how to put his tools together or play under control, but who now has the opportunity to learn on the job with a team not headed anywhere quickly.
Oklahoma City shone this week, shoring up their weakest position and picking up a quality backup guard in the process, all for spare parts. D.J. White (a power forward who was never going to crack the rotation), Jeff Green (a talented sixth man type caught on entirely the wrong team), Nenad Krstic (who was a good candidate to leave this summer anyway) and Mo Peterson (who was definitely going to leave this summer anyway), combined with a future protected first-round pick from the Clippers, saw them land two starting calibre centres in Kenny Perkins and Nazr Mohammed who should greatly improve their defence, along with Nathan Robinson, who won’t.
Perkins fits the big defensive anchor role for Oklahoma City that Cole Aldrich hasn’t. His perennially underwhelming numbers belie his impact; he will slide right in and sure up a frankly rather average defence. The same is true of Mohammed, who will be an incredibly good rental for the Thunder. Mohammed did not want to leave Charlotte, going so far as to mention retiring if he did not re-sign there this summer, but now he’s gone to a very good situation, where he’ll play big minutes on one of the league’s best. Throughout his entire career, people have underappreciated how productive Nazr Mohammed has been, and still is. When you see him average 8/6 in the playoffs, you’ll remember.
Even when looking at those numbers, the Mohammed trade was also good for Charlotte, who picked up a solid power forward prospect in White in exchange for a veteran who was expiring anyway. If they really want Nazr back, they can sign him back in 2 years, when the lockout ends. And the Gerald Wallace trade was not bad either – two first-round picks, a potentially useful backup small forward and complete salary absolution from a struggling and expensive player who seems to have already peaked is a pretty good return in any deadline deal. Gerald Wallace isn’t Pau Gasol; this trade wasn’t that trade. It’s a good deal for Portland, but not a fleecing.
It was the Thunder’s other trade that reverberated. Seemingly perturbed by the risk of losing him this summer due to his unrestricted free agent status, and perhaps exacerbated by his troublesome knees this season, Boston annoyed Kevin Garnett greatly by trading starting centre Perkins for backup centre Krstic and backup forward Green, filling their need for some forward depth but at the expense of creating a gaping hole at centre.
Not so long ago, the Celtics had five centres; Perkins, Shaquille O’Neal, Jermaine O’Neal, Rasheed Wallace and Semih Erden. They had more centres than they had roster spots for them, and had done it this way on purpose. But Rasheed followed through on his retirement plans, Shaq has struggled to stay healthy, and Jermaine lost that same struggle four years ago. Not even Erden exists any more; like Daniels, he and the Skillz Train were pawned off to the Cavaliers in exchange for a second-round draft pick, simultaneously opening roster spots and saving money. Without him on the bench, the Celtics become even shallower. The team that has to go through Dwight Howard now has to do so while relying on Nenad Krstic and Big Baby at centre.
They shook up the roster, but we’re not sure why.
(Incidentally, Perkins passed his medical with the Thunder, in spite of the issues in both his knees. This is telling, for this is the team who once vetoed a trade for Tyson Chandler on the basis of his medical. If there was something in there to worry unduly about, they would surely have found it.)
|He looks happy. And why shouldn’t he.
With all these deals comes some necessary bookkeeping.
A summertime post, entitled “Creative Financing In The NBA, 2010” gave a list of all active trade kickers found in the league at that time. With all the moves that have transpired since that time, particularly in the last week, that list needs some modernisation.
Carmelo Anthony’s trade kicker, equal to the lesser of 5% of his remaining salary or $1 million, was not activated upon his trade to the Knicks. He was already earning the maximum salary, and putting a trade kicker amount on top of that would have pushed his salary above the maximum, which is not legal. Therefore, his trade kicker was not invoked, and his salary remained unchanged. (It could therefore be argued that this trade kicker was redundant from the start, and needn’t have been included at all. Probably true. But it was put in anyway, just in case the cap had grown beyond all reprehension since the date he signed the deal. As it turns out, the global economy went the other way, we had a recession, and I lost my job. Swings and roundabouts.)
Meanwhile, Eddy Curry’s trade kicker was invoked upon his trade to Minnesota. Curry’s trade kicker called for a bonus equal to 15% of his remaining contract, up to a maximum of $5 million. Since this $5 million was not legal by the time of his trade, the 15% figure was used instead.
However, because half of Curry’s salary this season was paid before the season began, the trade kicker was adjusted accordingly. Whereas Curry’s outstanding salary upon the date of his trade would normally have been $3,338,059, only $1,691,529 was actually outstanding due to the upfront payment. 15% of that amount is $253,729, and thus that was the amount of Curry’s trade kicker. A small amount relative to the size of his contract, perhaps, but enough to almost cover Curry’s hitherto unexplained debt to Juwan Howard.
Joel Przybilla also had a trade kicker, invoked upon his trade to the Bobcats, and Peja Stojakovic’s trade bonus was invoked upon his trade to Toronto, about a month before the deadline. Additionally, Lou Amundson’s deal with Golden State, signed after the publish date of the original post, also contained a 15% trade kicker, as did Shannon Brown’s new contract with the L.A. Lakers. Taking all those moves into account, the updated trade kicker list now looks like this:
– Ray Allen (15%)
– Louis Amundson (15%)
– Ron Artest (15%)
– Andrea Bargnani (5%)
– Kobe Bryant (10%)
– Chris Bosh (15%)
– Shannon Brown (15%)
– Jose Calderon (10%)
– Tim Duncan (15%)
– Jeff Foster (lesser of 15% or $1 million)
– Pau Gasol (15%)
– Manu Ginobili (5%)
– Udonis Haslem (15%)
– Eddie House (15%)
– LeBron James (15%)
– Amir Johnson (5%)
– Chris Kaman (lesser of 15% or $4 million)
– Shawn Marion (15%)
– Antonio McDyess (10%)
– Mike Miller (15%)
– Yao Ming (15%)
– Jermaine O’Neal (7.5%)
– Chris Paul (15%)
– Quentin Richardson (15%)
– Brandon Roy (lesser of 15% or $4 million)
– Josh Smith (15%)
– Anderson Varejao (5%)
– Dwyane Wade (15%)
– Luke Walton (7.5%)
As their contracts are expiring this summer, and thus they are no longer eligible for trading, the trade kickers of Yao Ming and Jeff Foster can now be considered to be redundant. That leaves 27 trade kickers currently possible in the NBA, 6 of which belong to Heatles. None of which will probably ever be used.
Also contained within that post was a list of players who had the right to veto any trade. Full no-trade clauses are an incredibly rare occurence; it takes a very specific set of criteria to become eligible for one of those, and for that reason, only two players (Kobe and Dirk Nowitzki) have them. However, players who are signed to one year contracts and who will have either Early or Full Bird Rights when they expire also have the right to veto any trade they are involved in. It’s what’s colloquially known as the Devean George Rule. The list of players in such a situation was quoted as follows;
1) Jason Collins (Atlanta)
2) Marquis Daniels (Boston)
3) Anthony Carter (Denver)
4) Rasual Butler and Craig Smith (L.A. Clippers)
5) Shannon Brown (L.A. Lakers; this can be avoided if he invokes his player option for next season concurrent to the trade.)
6) Jamaal Magloire and Carlos Arroyo (Miami)
7) Aaron Gray (New Orleans; same as Brown.)
8) Josh Howard (Washington)
Additions to that list that came after it was published included Kyrylo Fesenko, Cartier Martin and Patty Mills; additionally, an omission from the previous list was Ray Allen.
Two of those players were traded – Anthony Carter as a part of the Melo drama, and Marquis Daniels was salary dumped onto Sacramento (due in no small part to the fact that Daniels is possibly out for the rest of the season with a spine injury). Neither played utilised their right to veto – obviously – but perhaps there was a case for Daniels to use his. Daniels stood to gain nothing from the trade – he’s probably not going to play this season, and with their depth of younger and/or better wing players (combined with a predetermined need to do it all as cheaply as possible), there is little chance of Sacramento re-signing him this offseason. Given the choice between an expensive seat on the bench of a title contender, with the vague security blanket of Early Bird rights at the end of the season, or a seat on the bench of one of the league’s worst teams with an uncertain future, and non-Bird rights in a summer of anticipated league-wide turmoil, Daniels accepted the latter. I’m not sure I understand why.
In Carter’s case, even if he had chosen to pull a Devean, it was no great obstacle to the trade. Fellow minimum salaried expendable veteran Melvin Ely has no such Bird rights, and thus had no such veto power; substituting him into the deal in Carter’s place made absolutely no difference to the salary implications, which is all that Carter was included for in the first place. In that respect, this wasn’t news.
But it would have been an amusing way for the immortal Melo deal to die.
|He looks happy. And why shouldn’t he.
Denver’s underappreciated achievement in the Carmelo Anthony deal was getting themselves under the luxury tax threshold for the 2010/11 season. This is what they mean when they say they included Billups due to a need to “make the deal bigger.” They needed to make it bigger to dodge the tax. This wasn’t necessarily THE priority, but it was A priority, and one they pulled a semi-miracle to achieve.
Before the deal occurred, Denver were slated to be one of only eight luxury tax payers in the 2010/11 NBA season. Alongside the L.A. Lakers ($20,074,756 over the threshold), Orlando ($19,591,145), Dallas ($13,446,319), Boston ($7,369,052), Utah ($6,733,605), Houston ($3,827,155) and Portland ($2,700,572), the Nuggets, at $13,552,541 above the luxury tax and lumbered with a $83,478,756 payroll, figured to be one of the most expensive teams in the league. Once luxury payments were taken into account, Denver was due to pay just short of $100 million for a team they didn’t want.
Not now, though.
In trading away Anthony, Billups, Balkman, Williams and Carter, while receiving Chandler, Gallinari, Felton, Mozgov, Koufos and three draft picks, Denver traded away $33,683,021 in 2010/11 salary (pre-trade kicker), while receiving $17,300,778 in return. Even when accounting for the salary of rookie swingman Gary Forbes – whose salary of $473,604 counts as $854,389 in luxury tax calculations – the Nuggets luxury tax number is now only $67,477,298, a comfortable $2,829,702 beneath the luxury tax threshold. And that was no mean feat. Not only did they disband a decent yet somewhat moribund team; they put together a young, 10 deep, playoff-calibre team, while saving themselves roughly $30 million in the process.
You don’t see that often.
In addition to the aforementioned tax evasion, the trade also saves Denver long term salary. Mozgov, Koufos and Gallinari are the only incoming players with salaries beyond this season, and the three combine for a $9,737,870 price tag next season. Pre-trade, Denver’s total committed salary including this season stood at $178,632,999; after the trade, it now stands at $146,620,481.
However, those savings won’t last forever. New York’s decision not to sign Chandler to an extension this past offseason not only inadvertently facilitated the trade – had Wilson signed one, his Poison Pill Provision would have significantly complicated the salary ramifications – but it has also created something of a welcome problem for Denver. While they have cut costs and accumulated young talent, it won’t be long before Chandler needs a new contract, as will starting guard Arron Afflalo, another key piece moving forward who unfortunately won’t be a bargain for much longer.
In the midst of his breakout season, a re-signed Wilson Chandler will not come cheaply, and the retention of both he and Afflalo will end any cap space aspirations that the Nuggets may otherwise have had. With Kenyon Martin’s seven year deal finally expiring this summer, and with Nene potentially opting out of his final season, Denver currently stands to have only $30,047,610 in committed salary, split between the incoming Felton, Mozgov, Koufos and Gallinari, and the incumbent Al Harrington, Chris Andersen and Ty Lawson. However, retaining Afflalo and Chandler will not be cheap; the pair’s cap holds will combine for $12,270,177 alone, before a single dollar has even be committed. That’s how it stands to be under this CBA, at least.
So if they want to save more money, how about declining to match Chicago’s full MLE offer to Afflalo next summer? Everyone’s a winner if that happens. Except Denver.
|He looks happy. And why shouldn’t he.
Denver’s tax paying compatriots were not so successful.
The L.A. Lakers made their big tax-saving move back in December, when they traded Sasha Vujacic and a first-round pick to New Jersey back in December, in a trade that was so predictable, even an idiot like me could predict it. The Lakers also received Joe Smith in that deal, a minimum salary player with no contributions left to give on the court; it was subsequently predicted by the author that Smith too would be dealt, his one year minimum salary contract being easily tradeable due to its ability to be absorbed by any team, even those over the cap, via the Minimum Salary Exception. However, for whatever reason, this did not happen.
(Other possibilities for this type of trade included Portland with Sean Marks, Utah with Francisco Elson, Dallas with Brian Cardinal and Orlando with Malik Allen. As mentioned elsewhere, Marks was dealt elsewhere; however, the other three teams held onto their little-used veteran big men, and will now pay luxury tax on their salaries. To put that into context, that troika of treasure have combined this far this season for 99 games and 1,093 minutes played, 235 points, 163 points and 146 fouls, all for a combined $5,126,334 after tax. Their teams clearly value them anyway, but enough to pay luxury tax on them? Seems so.)
Orlando, Dallas and Portland made no real effort to dodge the tax. In their one deal back in January, Dallas pawned off the excess salary of Jinx Ajinca to Toronto, then promptly spent half of it again on Peja Stojakovic. They didn’t even trade Cardinal. And in their one deal, Portland took on money, in both 2010/11 and future years, by trading for Gerald Wallace’s large salary.
(Incidentally, note that Wallace’s $10.5 million salary contains a $1 million all-star incentive currently listed as “likely,” due to the fact that he was an all-star in 2009/10. Because he was not one this season, that incentive will be deemed “unlikely” when such matters are addressed in the offseason, thereby making Wallace’s price tag a bit cheaper than it initially appears. And with the current depth of Western conference forwards, he is probably never going to be an all-star again.)
Conversely, all of Boston’s moves have had salary repercussions, mostly in the future. Their pre-trade tax number of $77,676,052 has dropped to $75,527,599 after the signing of Chris Johnson (and his intriguing shot blocking skills) to a 10 day contract; however, once they hit up the waiver for the Jason Kapono types that will pad out their now-thin roster, that number will shoot up.
What their trades did do, though, was open up future salary. By trading away Perkins, they now no longer have to pay him in the future, and there seems to be no intent or purpose to retaining Krstic after this season is over. The deal also saw the team dump Nate Robinson’s $4.5 million salary next season, a rather large amount for a backup point guard. Jeff Green is a restricted free agent in the summer, but his market value is (or rather should be) below that price. Boston have also made an opening in the 2012 free agency market; as of right now, only Paul Pierce and Rajon Rondo are destined to be under contract. The obvious target now becomes Dwight Howard. It’s a longshot, but it’s a shot nonetheless, and Perkins would have been an obstruction to that end.
Boston did not get themselves under the luxury tax this season, but they did open up future salary prospects. However, they had to submarine their title hopes and piss off their veteran core to do it. Was it worth it for a transparent positioning at a free agent summer full of free agents who might not even become free agents? They seem to think so.
(Note: Speaking of Boston, and their equally transparent attempt to land Troy Murphy once he’s been bought out by Golden State, there is no date by which free agents must be signed to be eligible for the playoffs. This is proven by the historical cases of players such as Lawrence Funderburke with Chicago in 2005, Derrick Zimmerman and John Thomas in 2006, and the oft-mentioned Anthony Carter with Denver in 2007. There is only a waive-by date. Players on an NBA roster on March 1st can only play in the playoffs with the team whose roster they are on. If they’re a free agent on that date, or signed with a non-NBA team? They’re eligible for anyone. Go nuts.)
That leaves Utah and Houston as pre-deadline projected tax payers. And as of today, both still are. Utah saved a little bit of 2010/11 tax when they made the Deron Williams deal, but they were still $4,907,732 over it in the aftermath, and never made another deal. Rumours of Raja Bell to Minnesota went nowhere – the Timberwolves presumably realising just in time that they don’t need 34 year old veterans for the stretch run when they have only 13 wins – and players like C.J. Miles and Andrei Kirilenko were not moved to cut costs. Strangely, neither was Ronnie Price; his $1,321,250 salary was not enough to get the Jazz under the tax, but a simple trade him and cash to a team with cap space, as predicted way back when, would have saved them that much again in luxury tax. Alas, it did not happen. And I’m not sure why.
From the same link came a predicted trade of Jared Jeffries:
Before yesterday’s four way trade that saw them move Trevor Ariza for Courtney Lee, and before the dump of David Andersen onto Toronto, Houston were about $10 million over the luxury tax threshold. After those moves, they’re now about $3.2 million over it. They also currently have 16 players, eight of whom are big men, and only two of whom can play point guard. The unguaranteed contracts of Mike Harris and Alexander Johnson are easy enough to cut, yet they save only $1.7 million and are not enough to get Houston under the luxury tax. Cutting those two, as well as trading Chuck Hayes for no returning salary, would achieve this. Yet Hayes has done nothing to deserve to be salary dumped; at $2 million for one season, he represents good value for the amount he contributes. Jeffries’s $6.8 million expiring will be harder to dump, but it’s possible; pairing him with a pick like above and sending him to Sacramento or Washington, or trading him with sweetener (maybe Jermaine Taylor, who was just made redundant by Lee’s arrival) to Minnesota for Sebastian Telfair, are all possibilities.
However, this, too did not happen. As of trade deadline day, Jeffries had $1,984,154 remaining on his $6,883,800 salary; trading him plus $2.5 million to the Sacramento Kings would have gotten the Rockets under the luxury tax, opened up a roster spot, and allowed them to use it to audition others. But it didn’t happen. Indeed, no salary dumps did. The trade of Battier and Ish Smith for Thabeet and DeMarre Carroll alleviated some payroll this season, and the Brooks for Dragic swap got them another $40,000 closer. But it wasn’t enough and no outright salary dumps were made. Jeffries, the prime candidate for one, stayed put. And because of that, the Rockets’s payroll of $71,759,254 puts them a mere $1,452,254 over the luxury tax threshold.
Jeffries has since negotiated a buyout from the Rockets, the details of which are not currently known. But unless he gave up more than $1.5 million, this buyout will not have been enough to get the Rockets below luxury tax territory. If there’s a good reason why he was not traded to Sacramento – or even to Minnesota for Telfair, or something of that nature – then I don’t know what it is. I’d like to.
(A non-tax paying team got damn close to becoming one. Atlanta’s trade for Kirk Hinrich did not push them into luxury tax territory, but it did push them really, really close to it. Specifically, their tax number now stands at $70,140,069, a mere $166,932 below the luxury tax. They also have little depth on the wings now, and they have only a 14 man roster, one of whom is the unsuitable Pape Sy. So if one or two players get injured, and they need to bring in some reinforcements, they will now struggle to do so. Indeed, if they want to sign someone to a minimum salary contract for the remainder of the season, they must wait until March 12th until they can do so without becoming luxury tax payers. But then, this is the team with the third highest committed salary in the whole league. They are not fiscally responsible. Oh and additionally, how do they justifiy giving up both Crawford AND a pick?)
[EDIT: As previously mentioned regarding Gerald Wallace, performance incentives in contracts are subject to modification. Incentives are projected for the upcoming season during the July moratorium, deemed to be either likely or unlikely based on what happened the previous season, and then the relevant cap numbers are modified accordingly. However, they are also modified retroactively – that is to say, if a player had performance incentives regarded as likely for a season, but then failed to meet the criteria during the season, then the cap number is readjusted during the tax calculations and the unmet incentive is removed. Similarly, in the case of a player who is assumed to have unlikely incentives that he later meets, the cap number for that season is retroactively adjusted upwards during the tax calculation process. This might have some relevance to the Hawks, for Marvin Williams has “likely” incentives this season totalling $550,000 that he may not have met. It depends on the specifics of the incentives, and what achievements they call for. Unfortunately, I don’t know those specifics. Nevertheless, if his incentives have not been met, the Hawks will have more wiggle room than first suggested in this space.]
Due to the nature of contract incentives – confusing, often complex, and highly private – projecting ultimate luxury tax figures is an incredibly difficult thing to do. Nevertheless, based on current figures, and pre-Jeffries buyout, here is a list of projected tax payers this summer. Figures still subject to change in the future, but not by much.
L.A. Lakers – $20,074,756
Orlando – $19,591,145
Dallas – $13,446,319
Boston – $5,242,998
Utah – $4,907,732
Portland – $3,233,972
Houston – $1,452,254
|He looks happy, ish. And why shouldn’t he.
At the other end of the spectrum, there is still residual cap space.
Sacramento went into deadline week with a payroll of $44,588,548, a total of $13,455,542 in cap space. They used only $150,285, and more than offset that amount by ensuring that both of their trades had incoming cash considerations. This is no new thing for Sacramento, who in the past two seasons alone have used their financial flexibility to absorb the contracts of Hilton Armstrong, Sam Cassell, Will Solomon, Dominic McGuire and Jermaine Taylor. It’s perhaps just a surprise that they didn’t more, such as with the aforementioned Jeffries, Price, Elson, Allen and Cardinal deals.
That, more than anything, was the overriding nature of this deadline. Far more big deals than expected, and far fewer financially-motivated deals than anticipated.
Sacramento’s main cap space rival was Minnesota, who used almost all of theirs in the Melo trade. Their role in that deal saw them change from the mediocre production and limited upside of the struggling Corey Brewer, to the substantial upside yet volatile production of Anthony Randolph. Their cost for making this perceived upgrade in prospects was taking on what’s left of Curry’s salary, and more importantly, taking on his cap hit. Before the deal, Minnesota had $12,366,964 in cap room, but after shedding Brewer’s $3,703,472 and Koufos’s $1,298,640, while adding Randolph’s $1,965,720 and Curry’s post-trade kicker $11,530,592, that number quickly dropped to only $3,873,394.
One of the only two teams with significant remaining cap room – eight figures worth of it – just spent it all on Anthony Randolph. The other didn’t use it all. We’ll see if it was worth it.
A couple of other teams had dregs of cap room, or sizeable trade exceptions. By moving James Johnson’s salary to Toronto, Chicago opened up $2,922,559 in cap room, money they probably anticipated using in a second trade. While this did not come to fruition, this cap space could prove to be an asset if they enter into the Bought Out Players market, for whom trading begins this week. That same trade saw Toronto themselves used about as much of their Chris Bosh trade exception as they could without going into the tax; previous trades for Ajinca and Jerry D. Bayless, combined with the Johnson deal, has seen that TPE shrink from its initial $14.5 million to only $9,025,960. Cleveland used most of their $14.5 million LeBron James-related traded player exception on Baron Davis, creating new ones for the outgoing salaries of Williams and Moon in the process. And that same trade saw the Clippers actually open up a further $0.7 million in 2010/11 cap room, which will now go unused; they already had $4.2 million’s worth that did not get used.
Ronnie Price would have fit in there, but I guess Utah values his contributions.
These amounts can still be used during trades around draft time, but it is too late now for it to be used in trade by teams facing tax ramifications. A team’s luxury tax position is calculated based on their salary on the last day of the regular season, with incredibly little able to change it after that. That’s why teams cut all their costs in February.
Apart from the ones who didn’t.
|He doesn’t look happy. Maybe he should.
Finally, Oklahoma City’s two trades carry more than on-court ramifications.
Not only did they bring in talented centres and a good backup guard for expendable pieces; they also opened up some financial flexibility. After restructuring Nick Collison’s contract earlier in the season, the Thunder found themselves right at the salary cap line, below it by mere pittance. Their two deals, though, have seen them open up $2,056,512 in cap room that they did not previously have.
This is significant for one simple reason.
Earlier in the season, Boston offered Kenny Perkins a contract extension, which he declined. Perkins said no because the extension that the Celtics offered, whilst the maximum they were allowed to offer under CBA extension rules, was probably lower than what Perkins could corral in the summertime on the open market. But by creating this small amount of cap room, OKC can now offer him a bigger extension than Boston could.
NBA contracts are only renegotiable if
a) they’re going upwards, and
b) the team has cap room.
Because teams so rarely have cap room, and because it rarely behooves teams to pay their already-under-contract players more money, it almost never happens. Indeed, before this season, I could not name you a single occurrence of it happening; it probably has at some point, yet that’s a testament to how rare it is.
However, in this modern, sabermetric, MIT-laden internet-era NBA, executives are far more cap creative than they used to be. Therefore, this barely-used strategy has been used twice far already this season. Washington used their leftover cap room to increase Andray Blatche’s salary, almost doubling his pay over the final two seasons of his contract and simultaneously tacking on a three year extension. Rather than chancing losing him on the 2012 open market, the team tied him in for five years for a total of $35,730,997, tying down a productive young player for a significant period of time. The Thunder themselves later one-upped this move with a $17.55 million extension for Collison that deliberately, humorously and yet craftily made him the fourth highest paid centre in the world ($13,670,000), behind only Amar’e Stoudemire ($16,486,611), Dwight Howard ($16,647,180) and Yao Ming ($17,686,100).
By simultaneously acquiring cap space with the underpaid Kenny Perk, OKC can now do a Baltche with him. OKC can use their cap space to renegotiate Perkins’s current $4,640,208 salary up to as much $6,696,720. From there, they can concurrently offer a new four year extension totalling a a maximum of $33,818,436, or any number below that that they feel happier with.
Add in the extra negotiated salary, and that’s over $35 million for four years that OKC can theoretically offer him, as-near-as-is $9 million per. In contrast, Boston could only offer circa $6 million per. It’s a significant difference.
If Perkins thinks he can get that much on the open market, he’s wrong. He’s not even worth that much, especially with his current injury concerns. Yet if OKC anticipates his return to full health, and wants to tie in the defensive centrepiece that they have thus far lacked during the entire Kevin Durant era without running the risk of him hitting the open market, they can do so right now.
But they’ll also have to do so right now.
Because there’s a problem.
They only have until March 1st to do it.
So they’d better impress him quickly.