TRADING DEADLINE & THE CAP - HOOPSWORLD

Trade Deadline: Setting the Stage

By: Eric Pincus Last Updated: 1/26/10 11:24 AM ET | 15010 times read


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As the February 18th trade deadline nears, many teams have a sharp eye on the high profile free agent class of the summer. For just a shot at stars like LeBron James, Dwyane Wade and Chris Bosh - a number of franchises feel obligated to try . . .

The difficulty is in clearing cap room. Moves need to be made in the coming weeks since expiring contracts can't be dealt after the deadline.

There may be a few small deals after the season leading up to the July moratorium but the only way to be sure there's spending power in July is to make a deal in February.

Calculating Cap Room
The key variable that won't be set until July is the actual 2010/11 cap number. While projections vary, a number of teams are using an estimate of $54 million - a drop from the current position at $57.7 million.

It's a somewhat complicated formula to calculate a team's cap space. It's more than just committed salaries but also unsigned first round picks, all exceptions and a nearly half million charge for each empty roster spot up to 12 (inclusive).

To get far enough under the cap to offer a max contract, some teams will have to renounce the rights to all of their own free agents and exceptions. If they do land a big name, the only spending power they'll have left to complete the roster will be minimum contracts.

Example: L.A. Clippers and LeBron James

If the Los Angeles Clippers wanted to make a run at LeBron they'd have to renounce everyone not under contract (Marcus Camby, Rasual Butler, etc.)

With a first-round pick (estimated at $2 million) and a seven-man roster (Baron Davis, Chris Kaman, Blake Griffin, Eric Gordon, Al Thornton, Sebastian Telfair and DeAndre Jordan), the Clippers would only have around $11.1 million to spend despite having only $39 million in committed contracts.

If LeBron James opts out of the $17.1 million left on his deal with the Cleveland Cavaliers, he'd be eligible for a 5% raise over his current salary of $15.8 million. Regardless of where he goes, barring an extension with the Cavs, he'll be taking a pay cut next season to $16.6 million.

The Clippers would be about $5.5 million short.

To clear more space the team can look to trade away Thornton and/or Telfair for expiring contracts or a trade exception. They can also deal their 2010 pick.

A number of teams have big enough trade exceptions to take on Thornton's $1.9 million this season. Telfair may be a harder sell since he makes $2.7 million next year. Technically Sebastian has an opt-out but there's no certainty he'll use it- even if he doesn't like his limited role behind Baron Davis.

If the Clippers don't get a deal done to open more space, there's not much chance James is going to exit Cleveland for LAC at a discount.

A better move for the Clippers might be a trade at the deadline for a second-tier small forward. It would eliminate the risk of rejection and help the team maintain its depth.

Recent buzz has Andre Iguodala of the Philadelphia 76rs available. A package of Camby and Thornton - perhaps bolstered by some sort of draft considerations - might help Philly clear Andre's $68.7 million contract from their books.

A number of contracts expire for Philadelphia after next season including Samuel Dalembert's and Jason Kapono's. Once the 2010 frenzy subsides - they'll be the 2011 chase.

Should Philly be amenable - the Clippers would be able to add a borderline All-Star while maintaining their ability to keep useful veterans like Butler and Craig Smith. LA would still have their major exceptions including the $3.36 million left over from the Zach Randolph trade (expiring July 19th).

In essence it'd be LeBron and approximately five minimum contracts - or Iguodala, Butler, Smith, Telfair and any players brought in on the Mid-Level, Bi-Annual or trade exceptions.

Max Cap Teams

Currently the New Jersey Nets look to have the most cap room at about $25 million.

Players like James, Wade and Bosh will probably get 16.6 million in their first year. The Nets would be able to land one and still have around $8 million to spare.

There had been some recently speculation that the Nets might look to move Devin Harris at the deadline to expand that space to two max slots. While arguably that's in their best interest as it may be more appealing for a player like LeBron to join with Bosh in New Jersey than go it alone - it doesn't look like Harris will be moved.

Should the Nets land the top pick, presumptively guard John Wall, then Devin would be expendable - but that won't be known until long after the deadline.

The New York Knicks are in a similar position with about $24 million of spending power which again is enough for one star - and then a solid veteran. Of course to spend on the open market means waiving the rights to David Lee, Nate Robinson, Al Harrington, Chris Duhon and the like.

New York might be able to keep Lee and add LeBron - but from there it's minimum contracts to round out a relatively unimpressive roster where Danilo Gallinari, Wilson Chandler and Lee are the big draws.

This is why the Knicks are desperate to move players like Jared Jeffries and Eddy Curry who are under contract for next season.

If New York could manage a trade for an All-Star big like Amar'e Stoudemire, the right package might make the Knicks more attractive to LeBron while maintaining some of the team's financial flexibility - but Jeffries would have to be a part of it.

The Miami HEAT may be in the best position of all with ~$22 million to spend on a player to join their existing superstar. The Heat may also have the fast-track on Bosh who has the same agent as Wade.

Miami should also be looked at as a possible trade destination for a big man like Amar'e - which would give the HEAT the rights to two stars and no need to actually get under the cap.

If Wade does leave, the HEAT would be sitting on roughly $38.5 million in space.

Similarly - should James leave the Cleveland Cavaliers in the lurch, they'd have about $18 million to spend on a replacement. Rumors have them linked to Antawn Jamison, Troy Murphy, David West, Iguodala and Stoudemire with hopes that a run to the title will keep James at home.

Not Quite Max Teams

The list of true max teams this summer is short. If you exclude the Cavaliers (who won't have space if they keep LeBron), it's just three.

The Oklahoma City Thunder have about $12.5 million available. The Thunder are one of this year's best stories currently at 24-20 and fighting for a playoff berth. OK City has the flexibility to trade now, shop with the decent chunk of space the currently possess or just continue to build slowly without over-extending themselves economically.

Whatever they've been doing thus far - it's been working.

The Chicago Bulls have a more aggressive position as they'd love to have a shot at Chicago-born Wade (or as a consolation Chris Bosh) but are about $4.2 million short (roughly $12.4 million). Monday's trade for Devin Brown (giving up Aaron Gray) was about adding a guard so if and when the opportunity comes up to trade Kirk Hinrich and/or John Salmons the team will still have some depth at the two.

Hinrich is a valued part of the rotation but he's set to earn $9 million a season for the next two years. Salmons has just one additional year at $5.8 million.

Equally, the Bulls have a ton of expiring contracts and a solid but expensive player in Luol Deng. If they can land Stoudemire for a combination of Deng, Hinrich and/or Salmons - they might be able to add in the All-Star big now and still make a run at Wade.

The Clippers would be next with $11 million to spend followed by the Minnesota Timberwolves at $10.8 million (although they can gain additional space should they cut Ryan Gomes) - and the Sacramento Kings at $10.4 million.

That's It

That's it for eight-figure cap teams. They total nine deep. Only three have max slots available - four if LeBron leaves Cleveland.

Players looking for major deals include James, Wade, Bosh, Carlos Boozer, Stoudemire, Joe Johnson, Rudy Gay (restricted) and David Lee. Not all are worth max deals.

Others have opt-outs they're not necessarily expected to use like Kobe Bryant, Dirk Nowitzki, Yao Ming and Paul Pierce. Some high paid stars are due for a reduction in pay like Ray Allen, Manu Ginobili, etc.

Ultimately there's just not enough cap teams for the available stars which means the odds are high that some re-sign with their existing teams.

Tax Teams

On the flip side of the coin are teams over the luxury tax threshold of $69.92 million. The Hornets will squeak under by $342k after they officially send Bobby Brown to the Clippers.

Note that teams under the threshold receive a share of the taxes paid by the big spenders which could be in the neighborhood of $4 million.

By moving Brown's $736k, the Hornets will be getting that $4 million share.

The Miami HEAT are $2.81 million over which mean Dorell Wright at $2.89 million should expect a change of address in the next few weeks.

The Houston Rockets would love to dump Brian Cook's $3.5 million off their tab as they're $2.6 million over. If there's no Cook suitor, the only obvious cut big enough to do the job might be a Tracy McGrady trade or buy-out if they can get it done at the right figure.

Currently the following teams are payers and estimated taxes: Los Angeles Lakers ($21.4 million), Dallas Mavericks ($15.6 million), Boston Celtics ($13.9 million), New York Knicks ($13.7 million), Orlando Magic ($12.2 million), Cleveland Cavaliers ($12.1 million), San Antonio Spurs ($10.1 million), Washington Wizards ($8.7 million), Denver Nuggets ($5.4 million), Phoenix Suns ($5.0 million), Utah Jazz ($4.5 million) along with the aforementioned Rockets and HEAT.

Cap/Trade Exception Teams

Only four teams are currently under the cap with the Memphis Grizzlies on top with $3.3 million followed by the Thunder ($1.9 million), Kings ($1.4 million) and Portland Trail Blazers ($1.3 million). The league allows $100k of wiggle room - so that can be added for trade purposes.

The following are some teams with large exceptions including the extra $100k: Magic ($7.0 million), Jazz ($6.6 million), HEAT ($4.4 million), Hornets ($4.1), Nets ($3.9 million), Nuggets ($3.8 and $3.3 million), Clippers ($3.5 million), Bobcats ($3.1 million), Lakers ($2.6) and Bulls ($2.0 million).

Only the Clippers and Nets can use their exceptions without hitting the luxury tax threshold. LAC will have a full roster of 15 after receiving Brown which could be an impediment to a trade exception deal.

The Nets and Grizzlies may be the best bet for a team looking to trim. Obviously a team like the Hornets isn't going back over considering how they worked since the summer to get under.

Sign and Trade

Another option would be sign and trade which would give a prospective free agent the chance at a longer contract (by one year) and larger raises (10.5% vs. 8.0%). For instance, the rumored Chris Bosh for Andrew Bynum discussion could wait until the summer.

The concern there is that it adds another party to the mix with a separate agenda. For instance, the Lakers may repeat as champions and decide that Bynum is untradeable.

Now the Raptors have to solicit a team that is willing to meet Bosh's contract demands and is willing to give up significant assets to make such a deal. Additionally Chris must agree to play for that specific team. Lining everything up is no guarantee - be it for cap space/picks or impact talent.

It becomes very possible that a deal becomes impossible and Bosh leaves for a simple option like joining Wade in Miami.

The only way the Raptors can be absolutely certain they get what they want back for Chris is to trade him at the deadline. The rest is a leap of faith that he'll re-sign or that a sign and trade can be resolved.

The latter option may work out perfectly - but that's a pretty big if.

Now What?

So the deadline nears. Some teams are looking to get under the tax. Others are looking for cap space next year.

Oh - and some teams actually want to improve their on the floor product.

Of the top free agents this summer, it appears Amar'e is the one most likely to be traded before then - followed perhaps by Boozer.

The Raptors have played too well to trade Bosh. It would take a major power play by Chris to force an exodus and that doesn't seem to match his personality.

Equally Memphis is rolling, the future isn't clear for Rudy Gay but a trade seems counter-productive for a team flirting with a playoff seed.

Chicago needs to make a deal to get further under the cap. The Brown deal is likely a precursor for what's to come - even if nothing is imminent. If the Bulls don't get a better deal, the Lakers may have a package for Hinrich that would provide Chicago the space they covet.

The Cavaliers may add a stretch four to complete what they feel could be a championship roster. The Mavericks are always a threat to get involved in a blockbuster deal. The Nuggets may add a defensive-minded big for their playoff run.

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The Clippers won't move Camby and sacrifice their 2010 cap space unless they're bringing in a choice player via trade. The Pistons haven't been able to move Rip Hamilton - so Tayshaun Prince may be the guy they deal.

Golden State has some assets - although many are injured. That's a team that needs a change.

The Blazers are also in a good position to make a trade although the shift may be away from a wing player to a big man after losing Greg Oden and Joel Przybilla to knee injuries.

The Wolves might move anyone . . . Wizards too.

New York has pieces to move but they may not be able to dump the guys they truly want to part with.

The Kings may (and probably should) make Kevin Martin available.

As always, it'll be an interesting few weeks until the deadline finally hits.


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