Calling All Unwanted Contracts: How the NBA Trade Deadline Will Flow Through Portland

The Portland Trail Blazers are one of the NBA’s hottest teams. They won 8 of the last 9 games heading into the All-Star Break, and have surged to 7th in the Western Conference playoff race. Although the bottom of the playoff picture out West is the weakest it has been in years, the fact that Portland sits in the thick of the race is a testament to Neil Olshey and the front office’s shrewd mini-rebuild in the wake of LaMarcus Aldridge’s departure to San Antonio. Now, the team is set up with the talent, youth, and financial flexibility to become a formidable force in the West for years to come.

For the Trailblazers, pivoting away from their core wasn’t easy. During the 2014-15 season, among the 23 lineups with at least 300 minutes played, the 5-man unit of Damian Lillard, Wesley Matthews, Nicolas Batum, Aldridge, and Robin Lopez ranked 6th in net rating (per stats.nba.com). That unit broke down defenses with pristine ball movement and floor spacing around Aldridge post-ups and Lillard pick and rolls. This efficient free-flowing offense, combined with plus defense on the wing and Lopez protecting the paint, resulted in Portland cementing itself in the upper echelon of the West. Before Matthews went down with a torn achilles, the Blazers were 41-19 and on pace for 56 wins, which would have tied them with the Clippers and Rockets for the 2nd best record in the conference. They were legitimate contenders.

Just weeks before Wes was lost for the year, Olshey used a first round pick and Will Barton to acquire Arron Afflalo and bolster the team’s bench. They were all-in for the championship run, even though they knew Aldridge could leave town after the season. However, after Matthew’s went down, Portland wasn’t the same. They struggled down the stretch, going 10-12, and went out with a whimper in their 4-1 playoff series loss to the Grizzlies. Wes Matthew’s torn achilles spurred the unraveling of that devastatingly effective and delightfully fun Blazers team.

In the aftermath, Olshey didn’t dwell on the lost opportunity. As the possibility of Aldridge leaving town heightened, the front office swiftly shifted gears away from the core that was about to get extremely expensive. Aldridge, Lopez, and Matthews combined to earn $208 million in free agency (per basketballinsiders.com), and Batum is destined for a max contract in the summer of 2016. So, on the eve of free agency, Portland dealt Batum to the Hornets for prospect Noah Vonleh and veteran Gerald Henderson.

Then, Portland eschewed bringing back Lopez or Matthews and instead pursued young free agents on reasonable contracts. As the clock struck midnight on July 1, Woj’s first tweet was to announce Al-Farouq Aminu signed a 4-year $30 million contract.

The move was met with some shock. Aminu played on a minimum contract the year prior, and wasn’t thought to be a major free agent target. This season though, he has more than proved his worth with improved shooting, flashes of offensive creativity, and his usual energy on defense and on the glass. He will be getting paid $7 million in 2018-19 when the cap is projected to be over a $100 million. That is, Aminu will be getting paid the equivalent of $5 million in today’s terms, the price of a decent rotation player, while providing starter-level production in the middle of his prime.

They also locked Ed Davis into a 3-year $21 million contract, which has already been a tremendous bargain. Three-fifths of the way through the season, Davis is on pace to provide more than 6 wins worth of value, according to both ESPN’s Real Plus Minus wins metric and Basketball-Reference’s box-score based VORP metric. In other words, Davis’s production has far outstripped his salary in year one of a deal that extends through his prime and descends in annual salary. Portland got great value in free agency, targeting young players to develop with their core on smart contracts that give the team immense flexibility moving forward.

The most remarkable part about Portland’s success this year is that they’re doing it while sitting more than $20 million under the salary cap and $13 million below the floor. They’re on pace for 41 wins with $49 million in total salary, which is absurd given that teams like the Bulls and Heat are projected for similar win totals and have around $90 in team salaries. With so much leftover cap space, they can rent it out to teams above the luxury tax threshold looking to shed some of the burden, and of course collect some assets in the process.

There are currently eight teams set to pay the luxury tax this season. Some, like the Rockets and Spurs, are barely in the tax, and wouldn’t necessarily be interested in giving value up to save a little cash. Other teams could stand to benefit immensely from moving salary onto the Blazer’s books. So in analyzing what Portland can do before Thursday’s trade deadline, I mapped out some of my favorite options for a salary dump.

 

Franchise Total Salary Over Tax Tax Payment Player Traded Player Salary 2016 Savings
Chicago Bulls $89,024,375 $4,284,375 $6,426,563 Joakim Noah $13,400,000 $14,002,623
Cleveland Cavaliers $109,270,293 $24,530,293 $61,988,599 Anderson Varejao $9,638,554 $41,991,179
Golden State Warriors $95,487,927 $10,747,927 $18,119,818 Jason Thompson $6,908,685 $18,440,597
Los Angeles Clippers $95,505,710 $10,765,710 $18,164,275 Lance Stephenson $9,000,000 $23,435,710
Miami Heat $88,124,243 $3,384,243 $8,460,608 Udonis Haslem $2,854,940 $8,222,227
Oklahoma City Thunder $97,157,411 $12,417,411 $22,293,528 Steve Novak $3,750,001 $11,675,561

All of these trades would net significant savings for the teams mired with large luxury tax bills. The Grizzlies have already engaged in one of the most obvious suggestions by taking on Chris Anderson in a salary dump from the Heat. However there are plenty of other scenarios. In particular, a trade revolving around Anderson Varejao would be a big deal. I had to triple check my calculation that Cleveland would save $41 million this year alone, an outrageous amount. In addition, Varejao is guaranteed a little more than $9 million next year as well, so the move could save Cleveland another massive chunk of change next year when I forecast them to be well over the projected $108 million tax threshold. Dan Gilbert could redistribute these savings toward better values in improving the roster.

Doing a little historical analysis could give us a blueprint of the cost of doing such a deal. In the offseason, the Kings sent Jason Thompson and Carl Landry to the Sixers, giving up Nik Stauskas, a loosely protected 2018 first rounder, and swap rights to Philly for the privilege. The guaranteed salaries owed to Thompson and Landry add to $13 million in 2015-16 and $9 million in 2016-17. Varejao is owed about $3.5 million for the remainder of the season and is guaranteed $9.3 million next year. However, the fact that Cleveland stands to save so much money with the trade would seemingly increase the Blazers leverage in negotiations, and make the two scenarios somewhat similar. Thus, it seems the Blazers should ask for something similar to what the Sixers received.

A deal could be built around Cedi Osman, the Turkish forward the Cavs drafted 31st overall in the 2015 draft, and a protected 2018 first round pick. The Cavaliers would certainly be reluctant to trade away Osman, who represents one of their only options to add young talent in the upcoming year. On the other hand, savings well into the tens of millions can be diverted to add value in other ways. They can add a player using Brendan Haywood’s $10 million trade exception, they can far more easily pony up big money to keep Timofey Mozgov next offseason, and they can always buy second round picks.

On the other side, while Portland wants to put their extra cap space to work this season, taking on Varejao’s $9.3 million guaranteed in 2016-17 isn’t ideal. Lillard will get a big raise when the first year of his contract extension kicks in, and Meyers Leonard, Allen Crabbe, and Maurice Harkless are restricted free agents the Blazers will most likely hope to keep. Factoring in Varejao’s salary, Lillard’s extension, and salary projections for the restricted free agents, the Blazers could only have $15-20 million to spend in free agency. This number isn’t exceedingly low, but could prevent them from pouncing on a top tier free agent should the opportunity present itself.

On the Cleveland side, the fact that they inked Varejao to this contract extension about a year ago makes giving up significant pieces to get rid of him a difficult pill to swallow. Possibly more important, Varejao has a close relationship with Lebron James and the Cleveland organization. Nonetheless, while there are some consequences both sides need to consider carefully, this swap of assets for cap space could provide a lot of value for both teams.

Another trade that’s probably more likely is Portland taking on Joakim Noah’s $13 million salary. He’s out of the year, and getting rid of his salary would have huge financial benefits for Chicago. The Bulls could get out of paying the $5 million or so in salary owed to him over the rest of the season, they would get out of the approximately $6.5 million in luxury tax payments they would currently owe, and, in an added benefit from getting under the tax, would be entitled to receive their portion of the luxury tax payments from the teams that are over the threshold. All of which add up to around $14 million, which ought to sound extremely enticing to a Bulls front office that has a history of skirting the tax. A protected 1st round pick would do the trick, although I’d try to get it done with 2 second rounders if I’m Chicago.

It’s pretty unlikely a blockbuster move like a Varejao will happen, but I would bet big money on at least one of these teams sending some salary into Portland’s cap room, and probably more. Let the bidding begin.

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