January 16, 2019
For two teams, the three way Dion Waiters trade has plenty of financial ramifications.

As you surely know by now, the Cleveland Cavaliers, Oklahoma City Thunder and New York Knicks pulled off a six-player trade last night, one sending Dion Waiters to the Thunder, along with Lance Thomas, Lou Amundson, Alex Kirk, and a Cavaliers second round pick to the Knicks, and J.R. Smith, Iman Shumpert, and a protected 2015 Thunder first-round pick to the Cavaliers. For the implications of this trade from the Cavaliers’ perspective, check out my colleague Seth Partnow’s piece here. Here, we will consider the deal for the other two teams.

For the Knicks, this move was all about shedding salary. The players they are receiving in the deal are all on non-guaranteed or minimum contracts, and reports have the Knicks waiving all three players in the coming days if not immediately. New York has already waived big man Samuel Dalembert and the remainder of his $4 million non-guaranteed contract (the base salary in all non-guaranteed contracts becomes fully guaranteed for the remainder of the season on January 10th of each season) in order to open up a roster spot to accommodate the three incoming players.

New York entered play Monday night with a 5-31 record, and after a loss to the Grizzlies and a win by the 76ers, Phil Jackson woke up this morning as the President of the team with the worst record in the NBA. Jackson surely knows that his team’s roster needs a complete overhaul before the organization will once again compete for the playoffs, let alone an NBA title. In that regard, no one on the Knicks’ current roster, not even Carmelo Anthony, should currently be untouchable.

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The Knicks thus decided it was worth it to send Iman Shumpert to the Cavaliers in exchange for the opportunity to unload J.R. Smith’s contract. Smith has a $6.4 million player option for next season [now possibly even larger than that due to a 15% trade kicker in his contract) and it is certainly possible that he will pick up that option. Were he to do so, then, before this move, the Knicks would have had just over $42 million in committed salary next season. That $42 million figure also doesn’t count the $3.7 million qualifying offer the Knicks would have had to extend to Shumpert had they decided to attempt to keep him in restricted free agency.

The salary cap for next season is predicted to be upwards of $66 million, depending on how the NBA decides to factor in the money from the new TV deal. [This $66 million figure, a projection made by the NBA itself, was made before the enormous TV deal was signed and should therefore be considered very much a baseline amount.] Thus, before this move, the Knicks would have, by conservative estimates, had somewhere in the range of $19 to $23 million in cap room next offseason if they renounced all free agent rights, including those to Andrea Barganani and Amar’e Stoudemire, and did not extend qualifying offers to Quincy Acy and Travis Wear.

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After last night’s deal, however, the Knicks will now have somewhere in the range of $30 to $34 million in cap room this coming summer. And that is with merely a conservative salary cap estimate – eventually, it could be quite a bit higher than that. While this summer’s free agent crop isn’t necessarily the most exciting in recent memory, the Zen Master will now have plenty of opportunity to prove his worth as a front office executive. And the trade was purely a financial one. In terms of their on-field product, the Knicks gave up two productive players for none whatsoever, but it is not easy to make a 5-32 team worse, nor is it impactful if you do.

As for the Thunder, and with apologies to Lance Thomas, the key asset Oklahoma City gave up to acquire Dion Waiters was a first round pick that is top-18 protected in 2015 and top-15 protected in 2016 and 2017 (becoming two second round picks if it does not convey by 2018). There is a chance that that pick conveys to the Cavaliers this year (or to whoever Cleveland ends up dealing it to if that’s what they end up doing) if the Thunder make the playoffs and finish with a better record than at least four other playoff teams. Otherwise, the pick will surely convey next year unless the Thunder have an injury-laden 2015-16 season even worse than the current one.

The question then is whether Dion Waiters, the fourth overall pick from 2012, is currently worth a late first round pick. That’s certainly up for debate. Many are viewing this move by Oklahoma City as an insurance policy in case of the likelihood that they are unable to retain Reggie Jackson in restricted free agency. However, it is not clear how Waiters will fit in to OKC’s rotation.

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Clearly, the hope is that Waiters can fill some semblance of the role formerly occupied by James Harden when he played for the Thunder. While possible, however, that is not the most likely of outcomes. Waiters has managed to increase his on-ball defensive intensity somewhat this season, as reflected in his currently averaging a career high 1.3 steels per game. That said, Waiters is still plagued by horrible shot selection and efficiency.

Dion is currently shooting only .256 from three-point range on 2.6 threes attempted per game this season.  He is also still shooting way too many long-two pointers, as 98 of his total 342 shots this year have come between 16 and 24 feet from the hoop (he is shooting 36% on those shots).  In all, despite his poor shooting away from the basket this season and his unquestioned skill at getting to the rim, Dion is only taking 40% of his shots within 8 feet of the basket, and thus he is only averaging 1.8 free throws attempted per game. He is also forever awkward on offense, as Seth depicts, and just not that effective nor efficient as an offensive player at this point.

Also of question is how Scott Brooks apportions the minutes in the Thunder backcourt.  Brooks will have to juggle minutes between Reggie Jackson, Jeremy Lamb, Andre Roberson, Anthony Morrow, and Dion Waiters, and it is yet to be seen as to whether Waiters can be on the floor at the same time as Durant and Westbrook. This question is made extra pertinent by how little he seemed to fit with Kevin Love, LeBron James and Kyrie Irving. Little about the Thunder’s situation, save for better cohesion born out of longevity, is all that different, and Waiters’s issues remain until proven otherwise.

Another interesting wrinkle is that this move now takes the Thunder over the luxury tax threshold of $76.8 million (the Thunder’s cap number after the Waiters trade is a hair over $79 million). This begs the question of whether the Thunder have another move left in them, possibly a trade of Reggie Jackson, that will get them under the tax line. If not, then this may signal that Thunder management has finally made the decision to pay the luxury tax. An interesting choice, to say the least, a little over two-years after the deal that sent James Harden to Houston.

Going into the 2012-13 season the Thunder chose to not go into the luxury tax and instead dealt Harden, now one of the front-runners in this season’s MVP race, to Houston. Fast forward some 50 months to the present-day, and now it appears Oklahoma City may be prepared to finally dip into the tax (unless of course they package Jackson and another back of the roster player before the February 19 deadline). Except now the Thunder seem to be doing so for a player in Waiters who is not nearly the caliber of Harden, who two years ago was unquestionably the third best player for the Western Conference champions.

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Dion Waiters does have significant upside, and if Sam Presti has finally convinced Clay Bennett and company to dip into the tax that is a good thing. Eventually, one would think the Thunder will have to pay the luxury tax in order to secure a title, and to retain Kevin Durant. However, the timing of this decision is curious amidst a season the injury-plagued Thunder are fighting just to make the playoffs. Even more curious is that Oklahoma City feels Dion Waiters is the player that necessitates a move (going into the tax) that many across the NBA have been clamoring for the Thunder to make since before the trade that shipped James Harden out of town.

On the complete other end of the spectrum, fully aware and uncharacteristically accepting of the fact that they are going nowhere any time soon, the Knicks here shed considerable salary so as to be able to retool. In basketball assets, they get a dismal return on two once prized players, a player formerly one of the best sixth men in the league and a young player who last year they nearly dealt for a first round pick. Indeed, in Iman Shumpert, the Knicks have sacrificed a cheap and decent enough young player in order to salary dump J.R. Smith mere months after allegedly refusing to sacrifice that very same player to salary dump Amar’e Stoudemire and really jumpstart their rebuild. Nevertheless, it seems priorities have changed, and the complete prioritisation of the 2015 offseason is indisputably sensible for a team in their position.

Financial repercussions, then, are key. Aren’t they always?

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Sean Tshikororo

I'm an attorney and teacher by trade, but my true passion is sports and above all else the NBA. I was born and raised in Cincinnati, so I didn't grow up with an allegiance to any particular team, however, my NBA fandom tends to coincide with the teams that employ alums of my beloved UC Bearcats. Here at BBallbreakdown I'll be using my legal training and love of basketball to give you the lowdown on all things related to the CBA, the salary cap, and team management. Hit me up on Twitter @HANDFULofAUGUST and be sure to check out my personal blog HANDFULofAUGUST.com for random musings on the NBA and everything else that matters!

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