By Adam Spinella
Beauty is in the eye of the beholder.
To some salary cap gurus and those who closely follow the league’s transactions, there was true beauty in the trade between the Cleveland Cavaliers and Atlanta Hawks Friday night. Cleveland agreed to send Richard Jefferson, Kay Felder, over $3 million in cash and two second-round draft picks to the Atlanta Hawks for the rights to Sergiy Gladyr and Dimitrios Agravanis. Yup, the Cavaliers shed salary and took back two players unlikely to ever suit up in the NBA. And yet, there’s some beauty to be found in the move.
Cleveland acted quickly to snatch up Dwyane Wade after he was waived by the Chicago Bulls and that signing gave the Cavaliers 16 guaranteed contracts. Not only that, but Felder – a valuable young point guard who raises some eyebrows with his speed and scoring – had a partial guarantee in his contract. The Wade deal, as well as the players they acquired in the Kyrie Irving trade, were all great and necessary additions that help move the needle towards Cleveland winning the East for the fourth-straight season.
It just means General Manger Koby Altman needs to finagle their way out of the guaranteed deals.
Releasing Jefferson and Felder would have put a combined $2.95 million in dead money on Cleveland’s books, and with the way their luxury tax bill is stacking up, that would have been closer to $5 million cost to the organization just to get down to 15 players at the end of camp. But by trading Jefferson and Felder to another team, Cleveland gets the $2.95 million salary off their books without a tax payment. In fact, the residual effect of saving on tax by unloading them is probably close to an $8 million net gain on Friday.
The cost for saving that money? Roughly $3 million in cash and two second-round draft picks. Any way you slice things, making the deal is worth it for the Cavaliers. The picks they give up – a heavily-protected second-rounder from Portland in 2020 and the lower of the Lakers or Wolves picks in 2019 – don’t appear to be very valuable to the organization anyway. In essence, this is just a way for the Cavaliers to save money and the creativity with which Altman was able to orchestrate a deal without giving up an asset is remarkable.
Of course, the biggest repercussion of this trade comes down to the personnel decision made by the Cavs to keep Jose Calderon instead of Jefferson. Jefferson, who was solid for the Cavaliers these past few years and played a major role in their 2016 NBA Championship win with his defense, was solely a victim of positional need. Sure, Jefferson is a better player than Calderon, and he provides value to a win-now team looking for spot minutes off the bench. But Cleveland is in a unique position with Isaiah Thomas out for an unknown amount of time due to a hip injury and the oft-ailing Derrick Rose the only other point guard on the roster. Calderon serves an important role as an insurance policy, one that isn’t worth giving up in favor of keeping Jefferson when the roster is already stocked full of wings.
Altman and the Cavs were deliberate in their timing for such a move. Had they explored a trade earlier, no team would’ve been willing to use its roster and cap space before filling it with camp invites. Wait a day longer and other GMs might be hesitant to make the move during the frenzy of last-minute additions and subtractions to gain G-League rights. The trade can be looked at on its face and seen as a dump by the Cavaliers and a sacrifice of too much cash. It’s true, that’s exactly what it was. But it was worth it, and the best version of a salary dump any team in their circumstance could have hoped for.
Atlanta on the other hand gets a low-risk addition of two draft picks. The reason they were a trade partner with Cleveland? The Cavs needed to negotiate with a team below the cap so that franchise could absorb salaries without sending anyone back in return (only teams under the salary cap can engage in such a trade). The plan all along would be to unload Jefferson; Felder was a bit of a surprise because he is talented, but the roster spot could be used on a better fit for the Hawks.
As much as many of us loathe going back to 7th grade math class, it’s crucial to go back and review the order of operations for how this plays out in Atlanta absorbing these deals. The Hawks were under the cap, but not far enough to just absorb Jefferson and Felder outright. First Atlanta had to waive Jeremy Evans, Quinn Cook and Tyler Cavanaugh to open the necessary space to absorb them.
While the guaranteed money from Jefferson and Felder’s deals is ~$2.9 million, their outgoing trade number combined was ~$3.8 million, the product of Felder’s contract only being partially guaranteed. Atlanta needed to clear that $3.8 million to take these deals, and thanks to a partial guarantee owned by Quinn Cook, they couldn’t get there by only waiving Evans and Cavanaugh. Cook is a tough loss to incur to make this deal happen, but if the organization believes one of the two second-round picks acquired will eventually yield greater value, it’s an acceptable loss.
Atlanta cut three players Friday, then waived two more after the trade. They started the day with just over $1 million in cap space and, thanks to trimming their non-guaranteed deals and clearing those five players off their roster, now have around $1.7 million to spend for a 15th roster spot, or to keep to absorb a player elsewhere.
So to recap, the Hawks got rid of guys they likely would’ve cut after camp anyway, got a cool $3 million in cash, opened up more cap space and got two second-round picks for their troubles. If you don’t find swindling like that freakin’ awesome then you don’t know fun!
There are a few other general managers and franchises that find themselves in situations where, before the regular season starts next week, have to finagle their way out of similarly tricky situations to tighten up their roster or cap scenarios. Here are a few of them:
Rockets Backcourt Problems
Houston is now in a predicament of their own as they make cuts for their final 15-man roster. The Rockets, after waiving a string of players on non-guaranteed contracts Friday, only have four backcourt players on their roster – Chris Paul, James Harden, Eric Gordon and Bobby Brown. No team can roll with that little depth in those spots, as one injury would cripple their rotation and force major minutes on some of their superstars that otherwise would benefit from avoiding an insane regular season workload.
Where do these cuts come from? Three players remain without fully guaranteed deals – one of them is Brown, who doesn’t alleviate the problem by departing. The other two, Troy Williams and Cameron Oliver, have partial guarantees; Williams’ guarantee is much more difficult to swallow than the $300k owed to Oliver. Nonetheless giving up on Oliver, who is out with a fractured hand, before they even see him play is a difficult decision to make. Nonetheless it’s one move they may have to make.
The struggle with that move is that it would essentially mean forfeiting a second-round draft pick. Oliver has a guarantee over $50k, which means he’s ineligible to be signed by the RGV Vipers, Houston’s G-League franchise. So the question is this for Houston: do they bite the bullet on Oliver, or do they look to make a trade elsewhere?
Several teams may be willing to trim some backcourt depth before camp ends and ship a player to Houston. The Rockets don’t have many small contracts that are immediately trade eligible, and Tarik Black’s 15 percent trade kicker makes him difficult to deal as well. Chinanu Onuaku may emerge as the name dangled out there to pick up one more guard.
One Too Many in Memphis
The Grizzlies have sixteen guaranteed contracts, and many have been under the assumption that former first-rounder Jarell Martin would be the player moving out of Memphis. With his strong performances this preseason that may be in doubt… or it could soak up one last bit of trade value for him. Grizz fans may prefer to see Wade Baldwin IV get the ax, another player with a frustrating track record and perhaps still some untapped potential.
Similar to the Cavaliers, Memphis is in the position where they’re above the salary cap and would need to work with a partner below the cap to absorb one of these deals. That said, they aren’t likely to give up a draft pick or any other sweetener when they can just waive a guy like Martin without fear of luxury tax ramification.
Very few teams with the necessary cap space remain. Phoenix has cap space and only 14 guaranteed deals, and they might have the right situation to give Baldwin a second chance early in his career. Brooklyn can clear enough cap space to take on Martin and might have a positional spot for him (and his three-point shooting in their system). The bottom line is that it will likely come down to one of those two, since both have team options beyond this season that can be declined, making releasing them and swallowing their salary more palatable than any other option from a financial standpoint.
Oklahoma City Keeps Spending?
Have you ever been late for work, rushing to get there on time when you know you won’t make it? You look at your watch and see that it’s already 8:55 and getting there by 9am isn’t possible. At that point, you might be able to stop rushing? It’s not like getting there at 9:20 is that much worse than 9:15.
That’s the philosophy many teams above the luxury tax threshold may have. “We’re already paying the tax, so there’s no real competitive incentive to not just keep spending” would be the basketball translation of such a mentality. For the Oklahoma City Thunder it will all come down to their ownership group and willingness to pay more than the currently $137 million in salaries they have this season.
Should ownership be willing to spend a little more, the Thunder have the right chip to add a piece to their seemingly thin bench. That trade chip: the $4.9 million trade exception from Ersan Ilyasova in their deal last Fall that brought Jerami Grant to OKC. These exceptions expire a year after the day they’re created, so GM Sam Presti must use this by November 1st or lose it entirely. There may be no better time to pull the trigger on a deal than before teams make their final roster decisions coming out of camp. It seems like the current plan is allowing for that possibility, with only 13 guaranteed contracts on the books.
There’s no doubt the Thunder have a thin bench and would benefit competitively from adding one more piece to it, although $4.9 million won’t get them too much. Devin Harris from the Mavericks would be a sweet addition, and he’s only on a one-year deal. Kyle O’Quinn from the Knicks would be available and make for a solid backup center.
Oklahoma City has options, and ones that they can feel free to explore before the season begins. Once November 1st gets here that Ilyasova trade chip will cease to exist. For a team so short on depth and so intent on challenging this season, it would be a shame to see them let that asset go to waste.
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