What Could Be Next for the Celtics After Trading Their No. 1 Pick?

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What Could Be Next for the Celtics After Trading Their No. 1 Pick?

Post by KyleCleric on Sun Jun 25, 2017 2:12 pm

http://heathoops.com/2017/06/what-could-be-next-for-the-celtics-after-trading-their-no-1-pick/

Adam Kaufman is reporting that the Celtics are in position to trade for Paul George with a three-year extension in place, but that it would depend upon signing Gordon Hayward first.

If I had to guess the Celtics’ intentions, I would suggest that the extension to which Adam is referring would actually be a renegotiation and extension to be signed shortly after the Celtics have acquired him(1), whereby George would increase his 2017-18 salary from $19.5 million to maybe as much as the $30 million maximum (at a $99 million salary cap), and thereafter extend for the maximum allowable two additional years – that’s three years, up to $94 million total.

(If he were to wait for six months after the trade, he could extend for four additional years – that’s five years, up to $169 million total. But read the next sentence to see why he might not want to do that.)

Why would George sign a renegotiation and extension now if it only adds two additional years, when he could play out his current contract and sign a new deal for up to five years with Bird rights (or four years without them) next summer? Get this: Those two extra years would add a whopping $74 million! And, when it was over (as a 30-year-old in the summer of 2020), he’d be a 10-year veteran – eligible to sign a 35% super-max contract. Financially speaking, that’s not just better than any other of George’s options — it blows them away!

But there are challenges around which the Celtics would need to work to make that happen.

To renegotiate George’s 2017-18 salary would require the Celtics to preserve cap space equal to the increase – at the max, that’s $10 million. That’s in addition to the cap space their other plans would require.

To trade for George (without renegotiating his salary) and sign Hayward to a max contract would require that the Celtics free up at least $19 million of cap space. To do both AND renegotiate George to the max would therefore require at least $29 million of cap space. While clearing $19 million is imminently doable, getting to $29 million is unlikely (unless it includes Al Horford).

So… what could Adam’s report — that George may have the parameters of an extension worked out, but that it would depend upon signing Hayward first — actually mean?

Well… It could mean that if Hayward doesn’t sign with Boston, that George would get his full renegotiation and extension.

But what if Hayward does come?

Well… Let’s take this in two steps.

The first step is just getting both Hayward and George to Boston.

That’s the easy part.

The Celtics can just about create the cap space necessary for a max slot for Hayward as it is right now, with virtually no outside help (they’d actually be as little as $275K short; nothing more than a Terry Rozier trade away). And if you can sign Hayward outright, trading for George is exceedingly simplistic. He makes $19.5 million. According to trade rules, the Celtics would therefore only need to send out $14.5 million in salaries to acquire him (i.e., his salary, plus $5 million). That’s Avery Bradley and Jae Crowder (among numerous other combinations). Done!

The second step is getting George to commit long term.

That’s the tricky part.

You’d likely need to pay George at least something comparable to what he could get as a free agent to get him to commit. But even that could be doable. To understand why requires an understanding of two things:

First, George wouldn’t need to renegotiate his 2017-18 salary to the $30 million max. He could renegotiate to any amount upon which he agrees. The resulting cap space the Celtics would need to free up would be dictated by whatever amount he takes.

Second, the new CBA will bring with it new salary cap rules that could be very relevant to George’s situation — they allow for the first year salary in a veteran extension to be an amount up to 120% of the player’s previous salary(2), but no more than the player’s maximum salary for that season. That’s far higher than the 7.5% in the current CBA!

Combining those two together produces one powerful result: Paul George could always renegotiate and extend his contract with the Celtics for less than the absolute max and still get as much as, or even far more than, he could get in free agency next summer.

What could his contract look like in such a scenario?

To know what it would need to look like, the Celtics would need to know what exactly what they would need to match or beat. To compare fairly, let’s deal with three years from today in any case… which gets Paul George to super-max eligibility in summer 2020.

So let’s analyze what he’d get if he were to opt for the free agency route: He’d get the $19.5 million remaining on his current contract for this season, and then he’d sign a new contract next summer that starts at the $31 million max (at a $102 million projected 2018-19 salary cap), with a raise (of 5%, assuming no Bird rights) to $32 million in 2019-20 — that’s $82 million total.

To make a renegotiation plus extension scenario financially worthwhile for George, then, the Celtics would only need to match that payout. For that, George would only need to renegotiate his 2017-18 salary to $24 million. Adding 20% for the first year of the extension would come to $29 million, with a rise to $30 million in 2019-20 — that’s the same $82 million total.

To get from his current $19.5 million salary up to $24 million, the Celtics would only need to clear $4 million of cap space.

If trading for George and signing Hayward to a max contract would require that the Celtics free up at least $19 million of cap space, than doing so AND renegotiating George’s salary up to $24 million would require $23 million of cap space — still a ton(3), but not nearly the $29 million it would require to get George to the max(4).

So… what does it all mean?

Adam is reporting that the Celtics are in position to trade for Paul George with a three-year extension possibly in place, but that it would depend upon signing Gordon Hayward first.

Could that be true?

Could it be that the amount of the extension would depend upon whether Hayward signs?

Could it be that George’s extension would be for three years and up to $82 million if Hayward does join? Could the Celtics clear the up to $23 million in cap space to make it happen? Would either George or Hayward take even less if not?

Could it be that George’s extension would be for three years and up to the $94 million max if Hayward doesn’t join?

If teams were hesitant to trade for George because he has an expiring contract(5), these types of renegotiation-and-extensions would certainly alleviate all of those concerns. And if this report proves true, it must be considered an imminent threat for the Lakers — who have declared their goal to create maximum cap space for a run at George and LeBron James next summer.

Oh… and by the way, none of this would disqualify the Celtics from also pursuing a trade for Kristaps Porzingis(6)!

This would all technically be happening after Moratorium in July, so the next couple of weeks should be fun(7)!

I've had a difficulty figuring out the cap math and rules on how to put together a deal where we sign Hayward and trade and extend Paul George per Adam Kaufman's rumor. This post had been posted over on the realgm forum and I found it to be exceedingly helpful in understanding what one kind of scenario could look like. I didn't see it posted over here yet.

KyleCleric

Posts : 253
Join date : 2012-05-10
Age : 31

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