2010-11 Free Agent Salaries: Sign and Trade or Sign as a Free Agent?

I would think this has been discussed previously, but for those that care and are interested in this subject, I have put together some numbers to show you the differences in the amount of money a free agent can make in a sign and trade vs. signing as a free agent.
1) The NBA is estimating that the salary cap will be at approximately $56.1m for the 2010-11 season. Let's use that number for this analysis.
2) A 7 year veteran (Bosh and LeBron) can sign for a maximum of 30% of the salary cap.
3) Their 2010-11 salary is maxed at $16,830,000 ($56.1m x 30%)
4) If a free agent signs with their old team they can sign for 6 years and receive 10.5% increases each year.
5) If a free agent signs with a new team as a free agent, they can sign for 5 years and receive 8% increases each year.
6) As a summary, if one of these 7 year fee agents signs with their old team or signs with them and is traded, they can receive 1 more year of a contract and can earn an additional $32,768,102 over the course of the contract.
7) A team that makes a trade that is over the salary cap can receive back no more then 125% plus $100,000 in salaries from the other team.

Below is a chart showing the annual salaries for a sign and trade vs. a free agency signing for a maximum contract in the 2010-11 season.

Sign With Original Team or Sign and Trade
Season Salary 10.5% Increase

2010-11 $16,830,000 $1,767,150
2011-12 $18,597,150 $1,952,701
2012-13 $20,549,851 $2,157,734
2013-14 $22,707,585 $2,384,296
2014-15 $25,091,882 $2,634,648
2015-16 $27,726,529 $2,911,286

TOTAL $131,502,996 $13,807,815



Sign as a Free Agent
Season Salary 8% Increase

2010-11 $16,830,000 $1,346,400
2011-12 $18,176,400 $1,454,112
2012-13 $19,630,512 $1,570,441
2013-14 $21,200,953 $1,696,076
2014-15 $22,897,029 $1,831,762

TOTAL $98,734,894 $7,898,792

TJ,

Ok, now I realize you were doing the math and not just listing the possible free agents.

So, if LeBron re-signs with Cleveland he still can only make $16.8M? Doesn't that just piss the little prince off!

Here's a link that lists the possible free agent targets.

http://basketball.about.com/od/nbaplayers/a/2010freeagents.htm

To get info on their current, but expiring, salaries (to get a feel for what their value/contribution in a sign-and-trade might be) start here:

http://hoopshype.com/salaries.htm



bob

.

This is a good analysis TJ.

The only way the sign and trade makes sense however, is if the team that you wan to work the deal with a) has players you want back in return and b) is a place your soon to be free agent wants to play for and c) the players they are offering have attractive contracts that fit in with your plans.

In the case of Bosh and the Lakers - as long as Toronto thinks that Bynum is worth the 30+ million dollars he is due over the next two years - and as long as Bosh still wants to go there, even knowing Lebron is not going there - then sure, it makes sense.

But if Lebron goes to the Knicks for example...and Bosh wants to play with him there...and the Knicks refuse to give up David Lee (because he is one of the few players there that would make Bosh and James want to go there) then both Cleveland and Toronto are out of luck.

Your original point that if Bosh is leaving anyway, it makes sense for Toronto to get something for him instead of just letting him walk away - only makes sense if what they are getting in return is the kind of deal that think makes sense. If Bynum's knee is shredded and he is unable to deliver more than 40 games a season - then his 13.8 and 15.1 million over the next 2 years is NOT a good deal for Toronto. Trading a player that is leaving soon for a bad long term contract is a bad deal no matter what way you look at it.

kleen,

I agree with all of your points (I knew we could do it).
NY can sign Bosh and LeBron without trading Lee, but they will have to let Lee walk away as a free agent. It's really hard to tell what teams will be willing to pay for Lee's services. I would think he will sign in th $12m/year range.