"Trading" Cap Space
by shrink on Jan 27, 2010 10:10 PM CST
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Last week, I discussed the financial implications of trading our financial flexibility in a deadline deal. If we wait until this summer, there has already been plenty of discussion on free agents we should target. However, if the best free agents sign with other teams, are we forced to overpay one of the remainders to save the summer? Fortunately, a third alternative remains, and its one that could be very lucrative -- "trading" our cap space.
How does this work?
Why would it be effective now?
Who would our best trade partners be?
Read on to learn more.
First, let me discuss the rules and how the Collective Bargain Agreement handles this. Most readers who follow the Timberwolves are aware that if a team is under the salary cap, they can offer that amount of space (up to the max) in a contract to a free agent. Teams strive to be far enough under the cap that they can outbid the mid-level exception (about $5 mil next year) that any team over the cap can offer. However, teams under the cap also gain other benefits, and one is that they are not constrained by salary-matching trades within 125% + $100,000. For example, if the Wolves were far enough under the cap, they could legally trade their $2 mil player for another team's $9 mil player. The other team would get the $2 mil player and a $7 mil traded player exception. TPE's could be considered IOU's to complete a trade within one year, but most teams simply allow them to expire, to reduce team payroll. Its technically not "trading" cap space, but creating a TPE, but in effect, it moves financial relief from one team to the next -- and it can be a valuable asset in a trade.
Trading cap space has been very lucrative in the past. In 2007, the contending Phoenix Suns traded Kurt Thomas to Seattle for an $8 mil TPE. Thomas was an important part of the Suns team, and he was on an expiring contract, but the Suns were far over the luxury threshold, so Thomas would cost owner Robert Sarver $16 million. In addition to getting Thomas, Sarver gave the Sonics two future first round picks for taking on Thomas for a year!
The Wolves are experienced trading cap space, having done so the last three years. Most notably, in 2008 the Timberwolves traded a $2.8 mil TPE to Philadelphia and received Calvin Booth and a look at Rodney Carney, with the 76ers paying most of their salary, and the Jazz protected 1st on top of it. The Sixers were desperate to increase their own space under the cap so they could make a max-deal offer to Elton Brand. As you can see, if an owner is willing to spend the money, he can sometimes get a very nice deal if he can reduce another team's payroll.
Could we expect similar value this summer? Its impossible to predict this with certainty, but current events point to the ability to "trade" cap space as perhaps more valuable than in recent memory, because of a perfect storm of economic factors.
1. 2010 has one of the best free agent classes ever. LeBron James, Dwayne Wade, Carmelo Anthony, Amar'e Stoudemire, Joe Johnson, Rudy Gay and many others headline a very strong free agent class that can make historic changes to any team that can sign them. However, like Philadelphia with Brand, some teams don't have enough cap space to offer one, or two deals that they once planned on.
2. Right now, more teams are over the luxury threshold than ever, at 13. Next season, LAL, BOS, ORL, DAL, DEN, NOH, IND, and PHI are already over the lux, and CLE, TOR and PHO join them if LeBron, Bosh and Amar'e stay put. Note that some of these teams aren't even contenders, and may be very motivated to get their payroll down to a more tolerable level, particularly with many teams losing money at a time when owners' net worths have fallen.
3. As many as seven teams may be looking to sell, or at least re-locate. A team will be far more attractive to buyers without big long contracts weighing them down financially, and hindering the flexibility that a new owner would need to put his stamp on the team.
4. Its looking more and more likely that there will be a work stoppage after the 2010-11 season, when the current Collective Bargaining Agreement expires. Owners may be anxious to cut ties with expensive stars before this happens.
5. The NBA economy is shrinking, so available cap space will become more valuable. For the five previous years, total NBA payroll has risen every year. This is understandable because, in addition to adding expensive free agents and extensions, most contracts have raises written in, either by the team or the CBA's rookie scale. The major way to decrease salaries is through replacing expensive players with cheaper alternatives. What's the NBA payroll looked like lately?
2005-06 INCREASE $112 million
2006-07 INCREASE $61 million
2007-08 INCREASE $106 million
2008-09 INCREASE $100 million
.. so what happened this year?
2009-10 DECREASE $40 million!
Besides the shocking $140 million U-turn, the NBA's payroll structure will also make raw cap space more valuable. As teams cut payroll to be players in free agency, more will re-set their team payroll at the salary cap ($57 mil) than last year's (lux $70), further shrinking the size of the pie. MIN will be one of the teams pulling their payroll down from $62 mil to $50ish in 2010. On top of that, about $60 mil in guaranteed salaries for the 2010 1st round picks will eat up space. All in all, there will simply be less available cap space to meet the previous long term plans of many NBA front offices.
HOW DOES THIS AFFECT MINNESOTA?
Suppose that the Wolves are sitting with $15 mil in raw cap space this summer, and Rudy Gay demands a deal starting at $13 mil, which would be overpaying based on the current deals for non-max players. If Minesota passes, where can they find the teams who would pay the most to acquire MIN's cap space?
NEW YORK: Right now, the Knicks have the cap space for one max-deal free agent, but they can't afford two. They covet LeBron, but would he want to come to the Knicks and be skewered by their media when he couldn't turn that young team into contenders? Suppose he says, "get the cap space to bring in another elite free agent, and I'll come." If it meant adding LeBron and Bosh, could the Knicks say "no" to trading their beloved Gallinari to get the cap space they need?
CHICAGO: Same idea, different team. The Bulls are close to having the space to bring in Dwayne Wade, but with cap holds to fill their empty roster spots, they can't offer a max deal. If Noah + Salmons could get Wade alongside Rose, they'd have a hard time rejecting the idea.
PHILADELPHIA: The Sixers are looking at being over the lux by at least $6 million dollars, and maybe more depending on their lottery pick. Even $6 mil would cost the owner $16. Why pay all this if you're not going to contend? Philadelphia has a number of interesting young players.
INDIANA: Second verse, same as the first. The small-market Pacers suffered heavy financial losses last season and look to be in the same position this year. The untimely death of their owner may reduce the front office's patience.
NEW ORLEANS: The Hornets were able to slip under the luxury threshold this week, but with attendance falling and salaries higher, George Shinn still needs to cut more salary. Next season, they may be about $8-10 mil over the luxury threshold, and the team may need to be about $10-15 mil under it to break even.
SOME OTHER GUY?: The list of potential buyers won't be limited to these five teams. Injuries may turn a contender into just another team over the lux trying to cut salary, like the Wizards this year. A team who decides to sell may trade away top notch talent if its locked into long term deals, and may provide incentive to get it done. Teams may decide that their current roster does not have championship potential, and they may simply decide that its time to rebuild. The Wolves could also serve as a valuable financial intermediary in a three-team trade.
The point is, the Wolves are in a very enviable position. They have acquired numerous assets with young players, prospects and picks, but perhaps their least-heralded asset is their cap space. They are in no way locked into using it on a free agent this summer, and may find that its even more valuable as a trade commodity.
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The thing that worries me the most
is that many of the key free agents have already made so much money that a “max” contract might be a secondary consideration for them. Being with a team with a chance to win a championship might just be better at $10M a better choice than going to a lesser team at max contract. I think the weather, coach, and FO could all play into someone taking less money.
That is why I personally hope that the Twolves make a few trade deadline moves rather than wait until this summer. I think we could be sorely disappointed.
Most of these "max" guys are probably not too great at managing their money.
And if they are great at managing their money, then they’ll know you never take less than you can get. 99% of everyone will take the most they can get, every time. And they’re wise to do it. Signing a smaller contract to be with a better team also makes you more prone to be traded, where you might end up playing out your discount contract for some terrible team you don’t want to be on – like the T-Wolves.
by princelyfrank on Jan 27, 2010 9:41 PM CST up reply actions
Also
You also have to factor in the player’s union. It hurts a ton of lesser players if Lebron and Dwade accept less than max to play together. If that happens then teams can say to everyone else ‘see, the best of the best took less and so should you .’
"Come on Eddie, let's get serious."
by biggity2bit on Jan 27, 2010 10:12 PM CST via mobile up reply actions
I have a guess that the salary cap
and payroll expenses in general for pro teams will be declining rapidly in the next few years. As a result, if we want competetive teams in the near future, we would be better off holding off on signing or acquiring any high priced talent until we know where the bar is set. We could end up backing into the late KG years without the talent if we aren’t careful.
by TheEvilProfessor on Jan 27, 2010 9:41 PM CST up reply actions
There's been rumors about a lockout again
And many of the owners won’t be willing to pay guys for 6 years at max contracts so I have a feeling that many players are going to take everything they can get right now, knowing that 2011 could be a lot less favorable for players. Most owners want to see the new CBA set the maximum length to 4 to 5 year contracts with team options on the last few years with the new max being about 80% of what it currently is.
Whether this comes true or not remains to be seen but if you are LBJ or DWade, you get your money right now while you still can.
Nice post
Two opposing headlines caught my eye in the past couple of days:
Owners want severe drop in salaries and NBA Ticket Sales Only Slightly Down.
The first one is “no, duh,” but the second one puzzled me—first because I don’t believe it’s true, and second, why would the NBA say something like this in the prelude to new labor negotiations?
Then it occurred to me how many franchises either are for sale, or a rumored to be for sale:
Detroit
Charlotte
Memphis
Golden State
And some other that haven’t been disclosed (Milwaukee?)
So I’m guessing the office was doing what it could to create the perception that things were on the upswing. Of course, even if tickets sold are up year-over-year, we all know that revenues are likely down due to heavily-discounted packages and promotions.
Off the top of my head the only people I can remember taking less are guys like Gary Payton and Karl Malone, who were at the very end of their careers and badly wanted the validation of a title to go along with otherwise sterling credentials. I get the feeling that most players (in all sports) really don’t take losing as hard as they would have you think. The truly great ones all seem to have an almost pathological desire to win, but for most a few extra million talks pretty loud.
Also, I think that if the player is young (say under 24) there is a very real upside to this team in the long term. The process is clearly not anywhere near complete (not least, the Rubio situation needs to be resolved, ideally with him getting here sooner rather than later or not at all), but a forward thinking player might see that. From our end a the big part of the gamble of doing it mid-season is that we won’t yet know our position in the lottery. Supposing we get the first or second pick in the draft, the team may look a lot different to any potential joiner and we would be in a far stronger position to negotiate, especially if we were willing to put the pick in play.
The way they’ve been playing lately I’d rather hope a trade comes sooner rather than later….
Which best-of-the-best player has taken less money?
The truly great ones all seem to have an almost pathological desire to win, but for most a few extra million talks pretty loud.
Whatever pathology is involved in needing to win? Seems to apply in contract situations as well.
;-)
Tom Gugliotta took less to sign with Phoenix, back in the day. Elite free agents accepting significantly less money to sign elsewhere, though, is hardly a trend.
"It has come to the editor’s attention that the Herald-Leader neglected to cover the civil rights movement. We regret the omission."
One example
is Kevin Garnett who took less money ($20M/year) rather than the 20% over is his existing (the $126M strike inducing contract). He’s stated reason – so the Twolves could sign better free agents.
Let me take it from a different approach. Over the last 5 years, anyone name a top 30 NBA players who as free agent signed with a below .500 team in a bad weather market? I can’t think of one.
I suppose you wouldn't count
Ben Gordon signing with the Pistons, since he’s probably not a top 30 player, but that’s as close I as could think of.
$20 million
may be less than he could have gotten, but it’s still a heckuva lot of money. I don’t know what the max figure (per year) is next year, but let’s say it’s $17 million/year. Hypothectical example (with rough estimates to illustrate the point, not outline what will actually happen): Miami wants to sign both Lebron and Dwade, but only has $25 million in cap space to do it. So does one guy get $17 million and the other only $7million? Or do they both take a $4.5 million (26%) paycut to sign with Miami? If so, then other teams and players are going to have a really big problem on their hands because what are you supposed to do? If you’re NY, how can you compete for Lebron or Dwade when you can pay them $4.5 million (minimum) more per year but the player still decides to go elsewhere? If you’re Chris Bosh or Amare or Joe Johnson are you supposed to sign for nickels on the dollar too so that your team can compete with the now suddenly stacked Miami? May as well get rid of the free market free agency system then, as teams/GMs suddenly lose a lot of power and control over their futures, and players become subject to the fallout of other player’s decisions in ways that could dramatically impact their earning potential. Lebron or Dwade, in this example, could accept less to play somewhere, but my guess is that ‘less’ would still be 95% of the max, otherwise the NBA allows a precedent that’s a slippery slope. Finally, you think if these two guys did this the rest of the owners wouldn’t use it against the Player’s Union as a huge leveraging tool during bargaining?
Also, KG’s deal is also misleading as a benchmark because his starting numbers were grandfathered in to the new CBA, and those numbers are unrealistically high for today’s NBA.
"Come on Eddie, let's get serious."
The grandfathered contract bit at the end, there
Would constitute my response.
The clearest example of a true below-market-value signing by a close-to-star-level player not at the end of his arc that I can think of is Danny Manning. Manning signed for a $1 million deal or something with Phoenix; then he blew out his knee, and the Suns made good on their Joe Smithism by inking him to a pretty big deal after the injury.
"It has come to the editor’s attention that the Herald-Leader neglected to cover the civil rights movement. We regret the omission."
Shrink, I see what you are thinking, however
can you tell us how many teams will be under the cap this summer?
It seems like many will be since they are trying to position themselves for free agents, but not all will succeed. Then the problem becomes, if there are three teams that need to create cap space, but six teams have cap space, there will be more sellers of cap space than buyers.
If there are teams willing to give up picks and pay part of the salaries, then the Wolves should seriously consider taking advantage. The interesting thing is they could take back a contract with two years left, knowing that the second season may be cancelled, or at least severely shortened. The Wolves could also get a few “free” players for next season by taking on smaller contracts and getting money from the other team, while still saving the other team money by getting under the tax.
I read something recently that the Wolves should consider taking Dalembert from the Sixers in exchange for expirings, with the Wolves also getting the Sixers #1 pick next summer. The thought is, even though the pick may be a top 5, the Sixers might do it to avoid paying Dalembert and the #1 next season (it would also probably put them over the tax). This type of deal should definitely be considered, especially considering how poorly the Wolves are playing, and the fact they probably won’t be competitive next season either.
I'd certainly be willing to take on Sam Dalembert
for a season and a half under those circumstances. He’d be a useful player for us (if overpayed) and would allow us to bring a rookie C in more slowly.
As far as a shortened season/lockout goes, how likely is this? And can you reasonbly expect it to occur as part of your forward planning?
Free Alando!
I can't guarantee a work stoppage
but I know the owners will push for something similar to the NHL. I think it really depends on whether or not the players are realistic or obstinate. I could not believe the NHL players let an entire season slip away, but they foolishly did, then signed a deal as bad or worse than they could have gotten before the NHL cancelled the season.
Simple math problem, players have fairly short careers. Even good ones average about ten years. Owners keep teams for decades, and even if they are selling they know the purchase price depends on the labor deal. Just more incentive for owners to play hardball, if the players realize this there won’t be a stoppage, or it will be a short one to test the owners or try to wring out a couple concessions. I just think the new union management is going to think they have to play tough to impress the players, which will be bad for all.
I don't really want to get into an argument about labor, but I couldn't let this go
so, you’re saying that the players shouldn’t bargain hard and should capitulate to the owners’ demands; owners’ whose franchise values keep going up? While labor has already conceded on a salary cap that restricts their earnings?
I think the players should hold out against more significant concessions—they’ve given up enough already.
by Eric in Madison on Jan 28, 2010 4:46 PM CST up reply actions
They can do whatever they please
The fact of the matter is that the owners all have lines of credit to pay for their facilities and debt obligations. Both parties are hurt by losing the nations interest. If a lockout goes on too long, the league won’t be the same when it comes back. This hurts the players more because of the short career spans. The owners can wait for the value to come back up when more fans get back into the swing of things.
Not saying that one side is at fault, but pro sports in general don’t have a very good compensation model and really gouges (sp?) the fans for ticket prices. Sports have become business oriented and don’t cater to families and instead try to get corporations to buy up the tickets. Leagues are only as responsive as their paying fans request and corporations are not what you would call responsive. We shall see, but I expect both the NBA and NFL to lockout. That leaves me with only the Wild for pro sports and I am not really a baseball fan. Damn.
by TheEvilProfessor on Jan 28, 2010 4:54 PM CST up reply actions
Well stated
BTW, one of the major reasons for the ticket price problem is the tax code. Not stating a lib/conservative opinion, just the facts. A corporation/business owner can pay the inflated price and get back about a third of the cost at tax time. Unfortunately, families don’t get that same benefit.
It’s also one of the reasons for the stadium building spree of the last two decades. The paying customer that mattered switched from the family of four to the club/box/suite buyers, thus making the old stadium business model obsolete.
There was an article last fall in either SI or ESPN magazine discussing the new stadiums (Yankee Stadium in particular). Was an interesting read if you can find it. I can’t remember the exact number, but when expendable income for the typical family of four is considered, only like 25% of American families can afford the usual cost of a ballgame (including parking, concessions, etc). The writer’s theory was that in a generation or two professional sports attendance will be severely harmed because young people won’t understand the concept of attending games in person.
Well, OK
but let’s separate the question of ticket prices, stadia, and corporatization from labor relations. Ticket prices are a function of supply/demand; no matter how much players get paid, teams are going to try to maximize their revenue.
by Eric in Madison on Jan 28, 2010 6:09 PM CST up reply actions
Brings up an interesting issue
I would normally agree 100% on this comment, but I wonder if it will be as easy for owners to increase prices if they can’t blame player salaries for needing the extra revenue?? Will be interesting to see how this plays out.
Not disagreeing at all with your theory, just wonder how it will play out with season ticket buyers??
Judging from the empty seats at the Target Center
Wolves tickets should be very, very cheap.
We all know that art is not the truth, art is a lie that makes us realize the truth.--Picasso
I thought what I wrote was fairly simple
I’ll make it simpler for you so you don’t have to put words in my mouth again (I really hate that FWIW). In the future, try asking a clarifying question instead of making an assumption.
I never said the players shouldn’t bargain hard, that was you putting words in my mouth. In fact, they should bargain hard, and give up as little as possible, but then realize giving up a few things is better than sacrificing a season. If you don’t understand this, do a little research on what happened with the NHL a few years ago (I’ll summarize, the owners ultimately got their way while each player lost a year of his career).
What I said (simple, simple, simple) is the players should not make the same mistake that NHL players made a few years ago…simple enough for you.
If the players do what you suggest in your last sentence, they will get burned.
Well, they might get burned
the NHL example is instructive to a point. But I’m not entirely sure that you’re right. At some point, the players as a union have to say enough is enough. They gave in on a cap. They gave in on a luxury tax. They gave in on max salaries and rookie scale. It isn’t a given that every franchise should be profitable; if you run your team badly, and lose all the time, there is an argument that you should lose your profits.
And while perhaps you didn’t say the players shouldn’t bargain hard, you did say that they could choose to be “obstinate” (your word) and force a stoppage, when in fact if there is a stoppage it will be a lockout, not a strike. You further said that if the players realize that the owners have incentive to play hardball, there wouldn’t be a stoppage, or not a long one, implying that the players would then concede (most of) what the owners want. I don’t think I really misinterpreted what you said or put words in your mouth, but YMMV.
by Eric in Madison on Jan 28, 2010 6:17 PM CST up reply actions
Seriously, I can't figure out what YMMV is...help
I don’t disagree with what you say about concessions the union has made, but they at one time had a fairly one sided deal.
I don’t think the players will “force” a stoppage, but I think only they can prevent a stoppage. Sounds odd, but it’s true. What I didn’t write initially is that the owners WILL be obstinate. I really believe the owners are committed to major changes and are not afraid to sacrifice a season when sponsors are already backing away and many stadiums are half empty despite crazy promotions. IMO, players need to decide what they are willing to concede (shorter contracts perhaps…fewer Mark Blounts), fight for what they want, and move on. If they do this, the owners in good financial standing will push the others to give up some of what they want. Right now, too many owners will lose less money in a lockout, players need to keep this in mind.
These leagues (not just the NBA) have done an incredible job increasing revenue the last couple decades. Owners feel they deserve to keep the extra revenue they created. Reality is, players did not create suites, they don’t hold cities hostage for new stadiums, and they do not create things like NBA TV and internet sites. The players deserve to get paid, but if owners create a revenue source that brings in $1 million per season, do the players automatically deserve half when they didn’t take on the risk of failure? That’s the owner’s argument, not mine.
A longer reply to come (maybe, if I don't fall asleep on my couch)
but YMMV=your mileage may vary; in other words, you might see it differently or disagree.
by Eric in Madison on Jan 28, 2010 6:49 PM CST up reply actions
Given the current economic landscape
there will be little patience for B*&chy millionares. It will be VERY hard for players to get popular support in this climate…and the owners know it. Bottom line for me is that these deals all need clauses for voiding a contract (like you and me getting fired) for doing something stupid. If I acted like some of these players do at work, I would get fired. Why can’t they? I don’t care how much they make, that is wrong and until that changes we will always have stories of immature athletes being poor role models (which they shouldn’t be anyways).
by TheEvilProfessor on Jan 29, 2010 9:02 AM CST up reply actions
You are probably right about popular opinion
but I swear I’ll never understand it. Why owners, as a class much wealthier than players, should get the benefit of the popular opinion, especially when it’s the players that are the product driving the league, completely confounds me.
by Eric in Madison on Jan 29, 2010 1:13 PM CST up reply actions
Fair or not, it's the way of the world
3M Corp. gets credit for inventing Post-It notes, when reality is a scientist named Art Fry (and a few colleagues I believe) developed the product without much support from management. Even after Post-Its were invented, their managers had little interest and the scientists had to find creative ways to show it’s value.
Bottom line is, w/o Art Fry, we may have never had anything like a Post-It Note….3M has an entire division built around the concept, profits of probably a billion dollars over the years…Fry maybe got $5 mil for all of this…Owners of the company got the rest.
Seems as if you put words in Eric's mouth as well
I believe this is exactly what his post was doing, no?
In the future, try asking a clarifying question instead of making an assumption.
It didn't seem like a question
“You’re saying” is different than “Are you saying”…..However, upon further review I do see a “?” at the end, so what seemed like putting words in my mouth could have been a slightly awkward question. Depends on how you look at it.
I love this idea!
Sure it puts the Wolves out of the 2010 FA market, but I’m convinced free agency is not the way to go for the Wolves in a capped environment – we simply can’t compete with the weather, aura, intangibles of other NBA cities. But trading our cap space for the 5th pick (Philly is currently sitting on the 5 spot but is 1.5 from the 8th and 1.5 from the 3rd) is an excellent deal because:
1 – Another set of ping pong balls for John Wall or Turner AND nabbing someone like Aldrich/Aminu/Johnson
2 – Dalembert would actually be a useful player for the Wolves and help answer the question – do Love and AlJeff really need a defensive C to be more effective?
3 – Even though we lose our cap space for 2010, we get it right back in 2011. Dalembert becomes the useful expiring contract for all of the 2010 season.
This is a dream deal and much more likely than convincing NJ to part with their pick.
Rumblebee - Good point
I think by the deadline that we will see a few big financial moves, so I’m reluctant to specifically name the teams with cap space. However, one thing that may make you sleep better is to look at the question from a league-wide perspective.
Let’s imagine all the potential free agents leave their current situations, and maximize the number of teams with cap space greater than 5 mil to be 8 teams. With eight teams, and four elite free agents, it may appear that there is a great deal of cap space available. However, this cap space didn’t appear out of nowhere. It was created when many many very good players came off some very big contracts. These guys don’t want to end their careers. Free agency is going to be bursting with both elite talent, and a huge depth of talent as well that will soak up cap space. Moreover, as these players come off contracts, many teams will be resetting their overall payroll down to cap level ($55) rather than their current lux level ($70). This takes even more money out of the system, lowering the price of free agents and raising the value of cap space.
I agree with you that Philadelphia is a strong candidate for us to “trade” cap space. Dalembert’s deal is big, and takes them well over the lux, but its also short. Cap space for Dalembert and the 1st would save PHI close to $20 million dollars in the first year, and that’s big money for a team without play-off ambitions. I think Dally is as a dumb as a rock, but he got that big deal because he has useful physical tools. Eating that much money would require an big reason, and the PHI 1st may do it.
I was thinking along these lines
just a little nervous that too many teams are all thinking the same. On the flip side, there will still be few teams who can help a team like Philly.
I was thinking more in terms of smaller deals (like the Utah PG, Maynor??) going to OKC. Those smaller deals may have extra buyers this summer.
As summer approaches and payrolls are more locked in, this will be a good concept for you to bring up again.
Trade with the Knicks to extend our EC's another year and pick up a free asset (Hill)
NY Knicks get:
Mark Blount
Brian Cardinal
Pecherov
Wolves get:
Jared Jeffries
Eddie Curry
(And hopefully Jordan Hill)
Work hard to get Jordan Hill as the sweetener. As an advocate of slow playing the Wolves current hand I really like this. The Wolves would enter the 2011 off-season with their cache of draft picks turned into players. They would know what is going down with Rubio.
We can add in second round picks if we need to as well.
After all the Knicks have done to setup this offseason could they really turn let Jordan Hill get in the way of clearing the final contracts?
I say Hill...
because I am assuming they won’t trade Gallinari. But if they would, obviously replace him above. Gallinari is easily their most untouchable player though.
by College Wolf on Jan 27, 2010 10:41 PM CST up reply actions
For that matter
I doubt that would Gallinari get in the way of clearing out the final contracts.
A solid point.
Replace him with Hill above then. I’d do it for sure.
by College Wolf on Jan 27, 2010 10:43 PM CST up reply actions
No thanks
from a video game perspective, sure. But when Glen Taylor has to pay, what, $16M+ for Jordan Hill… absolutely not. There is no way Glen Taylor should or should even be expected to do a trade like this. And not only are we paying this extra money for nothing except for Jordan Hill, we are losing out on any deals that may go down this summer (such as what Shrink was talking about above). I would much rather have pick 20 in this years draft than Jordan Hill at a position of strength for the Wolves already.
Gallinari
Replace Hill with Gallinari and then would you?
In the end, it could be worth it…? Just a suggestion.
by College Wolf on Jan 27, 2010 11:00 PM CST up reply actions
I just can't justify
paying that much money for Gallinari. There absolutely has to be a better deal to be had than helping the Knicks become a powerhouse while paying their bad contracts. And if I can’t even think of paying half of that for Gallo and 2 crap players (would be different if we were getting Gallo and Chandler and one of the other two) I can’t imagine Glen would want to with his own money. It’s easy to spend his money, but I wouldn’t ask that of him unless we get both of those players. If Lebron and Wade (etc) are actually on the table for them at the time if this deal could go through, they would absolutely HAVE to give up more than Gallo and crap contracts for an expiring.
I suppose
But it will be hilarious to see how our FO explains letting 20+ million of contracts expire if they don’t make a move for this deadline.
You don’t own a professional team to make money. It’s about pride/ego/winning/enjoyment/etc. You should expect to spend money if you ever want to win.
by College Wolf on Jan 28, 2010 12:00 AM CST up reply actions
Owners own professional teams for 2 reasons
1. When you sell, you make huge capital gains, which are taxed at 15% right now.
2. If you have other profitable businesses, the losses in the pro team on year to year operations can be used to offset income from other sources.
The problem right now is number 2 — in this economy, other cash cows are now hurting, so the tax deductions are worth less to an owner. Ergo, the owner is looking to cut costs.
Pride and enjoyment only exist if the potential to make a profit exists.
And the potential to make a profit only exists...
if you spend money to field a competitive team. At least, in most cases. Obviously the biggest markets will still have tons of revenue (Yankees, Chicago, Lakers, etc.)
by College Wolf on Jan 28, 2010 11:33 PM CST up reply actions
I haven't researched it
but most pro franchises will turn a profit for their owners no matter how poor the team does.
We all know that art is not the truth, art is a lie that makes us realize the truth.--Picasso
"cash considerations"
Teams can include cash as part of the deal, right? If money was the only holdup, I think the Knicks would find a way to help Taylor on the financial end of things.
That said, I still wouldn’t be a big fan of this deal. ’
With Gallinari, yes.
We delay our cap space opening up which may be advantageous later on.
Free Alando!
Trades are Summer Cap Space
Keep in mind we’re not talking about trading expirings here before the deadline. We’re talking about making a trade this summer that gives the Knicks more raw cap space. There are a couple signnificant differences:
1. Since trading for expirings is far easier than trading for cap space. Almost every team has expirings, and it doesn’t matter what the team payroll is – a team can trade its expiring if they cap match. The Lakers are $20 mil over the luxury threshold, and they can still trade expirings. A much smaller number of teams have space under the salary cap this summer, and even fewer who don’t have their own plans for it. This makes it far more rare, and far more valuable.
2. Since we’re not talking about the trade deadline in two weeks, and are in fact discussing this summer, it reduces a great deal of uncertainty. I think it would be very dangerous right now for the Knicks to use Gallinari to clear cap space for the CHANCE to sign LeBron and Bosh. This summer though, they can see if LeBron and Bosh opt out, and discuss plans directly with them without tampering. If they guarantee they will both sign on in NY if the money is available, then as much as the Knicks likes Gallinari, they can’t say no to a scenario that puts LeBron in a Knicks uniform for the next five years.
I'd also trade for Iggy + Dalembert
You can find a ton of discussion about it in that TWB Forum link I posted above.
Short story: Iggy is exactly what we need (SF like Gay/Butler/Iggy) and Dalembert is the perfect center next to Love/Al. Plus Dalembert has been playing pretty well and only has one more year left.
I would rather trade
expirings to PHI for Dalembert and their first round pick. Then we really can get Turner and someone like Aldrich who can be brought along slowly. Then we can trade Pek to acquire another piece. Iggy’s deal will be horrible in another year or two.
by TheEvilProfessor on Jan 28, 2010 7:46 AM CST up reply actions
i like iggy a lot, but my concern with him is that...
he is an above average player on an absolutely horrid team. That same team probably has more overall talent than we do, yet Iggy hasn’t helped them get over the hump. What in that would convince us that he is the answer we are looking for? To throw in my 2 cents is either we trade for Gay before the trade deadline, or we hope that since Memphis is in contention, they hang on to Gay for the remainder of the year and then we can sign him at the end of the year. Otherwise, we go balls to the wall, trade Jefferson (and bits and peices) to the Suns for Amare assuming he won’t resign, then when his contract clears, we may have the cap space to try and convince both Wade and Lebron to come here. It’s highly unlikely to work, but I feel that if there is a legitimate chance that those two could play together on a team, it would be hard for them to pass up, no matter the situation with the weather or small market.
Kinda like Al and Love on our squad?
re: Iggy being an above average player on a bad team (the same ‘bad’ team that won 81 games the last two seasons before this one and went to the playoffs both timess, or has average over 39 wins per year since Iggy’s been there and made the playoffs three times?). Instead you want to sign a player whose team, prior to this year, has averaged less than 23 wins a season, and who is at most the third best player on his team (behind Zbo and Gasol) and is barely ahead of the fourth place guy (Mayo)? For me this is being too hard on Iggy and assigning Gay too much credit for Memphis’ success. By this reasoning you’d pass on CP3 in order take Derrick Rose if NOR wasn’t winning enough and the Bulls were winning slightly more. Sorry, I just have to disagree with you on this one. I personally would love to have Iggy on our squad.
As for Amare – no thanks. Whoever we’d be able to sign this summer won’t be as good or as helpful to us as Jefferson, and they’ll be more expensive and eat up more of our cap space for more years. I just don’t believe, no matter how much I want to, that any top level guy is signing here this summer.
"Come on Eddie, let's get serious."
by biggity2bit on Jan 28, 2010 11:35 AM CST up reply actions
Iggy
just not for that price. We need to see the big picture here and realize that his contract would put us back in the KG years when the cap continues to go down. At least Dalembert expires much sooner and rookies are cheaper.
by TheEvilProfessor on Jan 28, 2010 11:47 AM CST up reply actions
Agreed
Assuming contracts are going to go down.
EP, you follow this stuff, I have a question for you…Compare the contract Al Jefferson signed a few years ago with the contract Rajon Rondo signed last summer (Rondo a couple million a year less at similar point in career). Do you think this is a sign of where contracts are going (both players seemed on the verge of being All-Stars when they signed their deals), or just one player got a better deal than the other?
I think the difference has
to do with position and not so much one player getting a better deal.
by TheEvilProfessor on Jan 29, 2010 11:01 AM CST up reply actions
Agreed
The Sixers are awful right now in spite of having Iggy not b/c of any shortcomings in his game. If we added Iggy and Dalembert we would immediately become an above average to goodish team. Add to that Rubio and whoever we can get in the draft and we don’t need to worry about being hamstrung by salaries b/c we have our team to go forward with.
I would suggest something related but different. Take on a "bad contract" for a good player if that teams gives us their lottery pick.
So maybe we take Dalembert if Philly gives us their lottery pick. Same for washington. We take Caron Butler if they give us their lottery pick.
Or some variation like that. We are overpaying the “bad contract player” but that is offset by the cheap player acquired with the draft pick and this is very good draft year.
by Kevin Love Jefferson on Jan 27, 2010 11:53 PM CST reply actions
Works for me
Bring on Butler or Dalembert if we get their lottery pick. Highly doubt either team would do that though.
by College Wolf on Jan 28, 2010 12:01 AM CST up reply actions
Another quote "good one" - We take AK47 from Utah if they give us the Knicks pick (this assumes the knicks pick is still a "good one")
by Kevin Love Jefferson on Jan 27, 2010 11:54 PM CST reply actions
If philly won the lottery and had the #1 pick, would we take the Brand contract to get #1 in the draft?
by Kevin Love Jefferson on Jan 28, 2010 12:23 AM CST reply actions
Ummmm...
HELL YES. Without question.
Can you imagine Wall + Turner/Favors/Henry/whomever.
That would be glorious.
by College Wolf on Jan 28, 2010 12:53 AM CST up reply actions
They would secede from the NBA...
before they’d give us John Wall just for taking Elton Brand’s contract.
If Philly waits that long and gets lucky in the lottery
Yes, the Wolves should do it, but Philly would keep Wall and live with the payroll issue for another season.
The long arc of salary consequences outlasts most fan attention spans
Trading cap space has been very lucrative in the past. In 2007, the contending Phoenix Suns traded Kurt Thomas to Seattle for an $8 mil TPE. Thomas was an important part of the Suns team, and he was on an expiring contract, but the Suns were far over the luxury threshold, so Thomas would cost owner Robert Sarver $16 million. In addition to getting Thomas, Sarver gave the Sonics two future first round picks for taking on Thomas for a year!
The exception Seattle was trading them, too, was a result of the sign-and-trade of Rashard Lewis down to Orlando. So Presti turned the defection of the Sonics’ young star into a TPE, which he then turned over into a useful player for a year and two firsts. The neé Sonics franchise still isn’t done collecting on the return they got for Rashard. They have another pick coming from Phoenix.
"It has come to the editor’s attention that the Herald-Leader neglected to cover the civil rights movement. We regret the omission."
Sure, they’re still collecting, but what are the chances that two late first rounders will amount to much?
I want to turn our cap space into someone that will help us more than a future late first or two.
They also got three pieces for Thomas from the Spurs, for that matter
Uh, yeah, that would be the idea of this thread and all…. But what I’m saying is, Seattle (now OKC) lost their own free agent and has still collected several decent assets from so doing. Fans who moaned when Rashard left town on a huge deal probably felt devastated (and then the team left and they felt even worse), but Presti did okay.
Later on he dealt Thomas in turn for Brent Barry, center Francisco Elson and a 2009 first-round draft pick. The pick was used to take Rodrigue Beaubois, but they dealt up a single pick to get BJ Mullens from Dallas.
So far, then, the trade exception from losing Rashard was used to get:
- A year’s worth of Kurt Thomas and Francisco Elson filling their gaps in the frontcourt. (They let Brent Barry walk.)
- A center project (Mullens, injured since preseason.)
- Serge Ibaka, Congolese power forward, whom they drafted at #24 in 2008. (He’s a rookie this year, playing so-so with a PER of 12.8 — right around that of Eric Maynor and Chase Budinger, using that as a quick yardstick.)
- Whatever first-rounder Phoenix (currently 7th in the Western conference at 27-21 but hitting a little 3-7 dry spell over the last 10 games) winds up with next year. That pick is unprotected.
Whether Mullens or next year’s pick come to much is an open question. They’re maybe not going to be star-level players, but still…. Pretty yoemanlike work for a GM facing the defection of his star.
"It has come to the editor’s attention that the Herald-Leader neglected to cover the civil rights movement. We regret the omission."
Carmelo Anthony?
First three letters are right, but it should be Carlos Boozer. Melo can’t opt out until 2011.
My ideal target: Chicago
I’ve been arguing with their posters for a few pages worth of thread over on RealGM and they all seem to be in denial, but the fact is, they will not have enough cap space for a max deal once John Salmons inevitably picks up his player option.
Noah+Salmons for cap space is a good idea, but might be asking too much. We could give them Pekovic for that package, who’d be a nice compliment to a shotblocker like Taj Gibson (or Ty Thomas, if they sign him as a free agent). Also, if they cap comes in high enough that they only need to cut a million or so off the top, they could be a team willing to sell its 1st rounder for cash. We could get in on that, too.
I love them both.
If they seem unrealistic now, we just wait and let the financial beatings continue.
Sergio left Portland because he didn't want to be buried on a full roster
Not sure what his mindset is right now, but that was why Pritchard and Nate decided to deal him.
"It has come to the editor’s attention that the Herald-Leader neglected to cover the civil rights movement. We regret the omission."
I'd love...
to get Philly’s first for Dalembert. I’d add one of our later firsts as well…or both? Or a pick and Pekovic’s rights. Philly would save a ton of money dumping that contract. They’d still get one or two young assets to start their rebuilding. I’d prefer this to Iguodala’s contract. Lot’s of possibilities with a 2nd top 10 pick. Aldrich? Or a 2nd wing (assuming Turner).
How about this:
Trade Deadline:
Trade Blount, Pecherov, the Charlotte first and Pekovic’s rights for Dalembert and Philly’s unprotected first rounder.
Trade Gomes and Hollins for the expirings of Scalabrine, Giddens, and Walker adding a protected Boston first in 2011.
Summer:
Draft Wall or Turner, Aldrich and Jarvis Varnado.
Trade Al Jefferson and Jonny Flynn for Kevin Martin and Anthony Randolph with Jason Thompson going to GS.
Sessions, Turner, vet FA
Martin, Brewer,Ellington
Turner, Brewer
Love, Randolph, Varnado
Dalembert, Aldrich
I like the potential of a big rotation of Love, Randolph and Aldrich. A good mix of complementary skills although it counts on Randolph making strides offensively.
Just a thought.
Not sure what I think about the rest of the post
but why wait til the deadline if we are going to do something like this? Might as well do it now and take Dalembert’s wins away from them to improve out draft pick we are getting. Might hurt our own… but probably not.
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