NBA Trade Deadline Minutiae

In the comments following the Alex Acker trade, a few citizens requested a quick reminder of the various salary cap implications of these minor deals (Cheikh Samb, Hassan Adams, Acker).  Your wish is my command.

First of all, there's some question as to whether the Acker trade actually gets Detroit under the luxury tax threshold.  But that's obviously the incentive, so let's assume it did the trick.  100% accurate cap data is hard to come by, not to mention that there are several confusing rules, some of which I understand, and some of which I probably don't.  For minimum salaries, for instance, what a player takes home and what he counts against the cap are two different things.  Players with more experience get paid a little more, but the minimum salary cap number is always the same, with the league picking up the difference - I think that's how it works anyway.  And I find it strange that the NBA doesn't prorate the salary when calculating the cap - the Pistons have paid Acker over $400K this season, but the final luxury tax calculation is a snapshot of their payroll at the end of the season, which makes no sense, but that's what they do.

Here are the fiscal considerations for the Clippers while making these deals, as far as I can tell.

Debits

  • The Clippers are responsible for the player's salary of course.  Bear in mind, that's prorated for the rest of the season.  So for Acker, that should be 29/82nds of his full salary of $711,517, or $251,634.
  • The luxury tax threshold is $71.15M.  There are now 8 teams above the threshold, and that's how it will stay - they're all at least $4M over, and they won't be able to change that.  (I suppose it's possible that one of the teams BARELY under may do something to go back over, say if they had a key injury and felt they had to take on another contract to compete - but suffice it to say that they will do anything and everything they can to avoid that).  The 8 teams paying in are cumulatively about $103M over the threshold by my quick math.  Call it a distribution pool of $100M for simplicity's sake.  The teams UNDER the threshold split that money (and the NBA takes one share as well, I believe).  So with the Pistons now expecting a piece of the pie, it has to be sliced 23 ways, where before the Acker trade that was 22 ways.  The delta for each team is about $200K. 
  • Total debits for the Acker trade - $250K in salary, $200K in lost tax distribution = $450K.


Credits -

  • Cash considerations. 
  • In the cases of Samb and Adams, the trades included 'cash considerations' coming to the Clippers.  These were usually reported as the remainder of the player's salary.  Was the lost tax distribution taken into consideration?  Was there a service charge or a profit margin added in?  We don't know, that information is simply not available to us.  Michael Heisley, in the case of the Shaun Livingston deal, was quoted saying 'This was strictly a money-making deal for us - we made a little money.' 
  • The Collective Bargaining Agreement allows for up to $3M to be included in any deal, so the rules definitely allow for the receiving team to turn a nice profit on these deals provided the incoming player doesn't make TOO much money.
  • In the case of Acker, the final deal as reported by the Clippers above did not include any cash.  It did include Detroit's 2011 second round pick. 
  • Total credits for the Acker trade - Acker and a 2011 second round pick. 

So the Clippers essentially bought Acker and a second round pick for $450K.

Remember also that the conditional draft pick the Clippers have sent back in each of these trades is so restrictive as to likely never actually change hands.  The Clippers would have to become one of the five best teams in the league to lose any of these picks.  We'd like to have that problem.


Other problems with all of this -

The Clippers have now helped three teams get under the luxury tax threshold - the Nuggets, the Raptors and the Pistons.  Each time, it reduced their piece of the pie a little.  The sum ends up being about $650K, give or take.  Of course the Clippers were compensated for that.

But consider this - the Clippers also cost 18 OTHER teams $650K each.  They helped the Nuggets, Raptors and Pistons, and the eight teams over the cap are unaffected, but more than half the league has reason to be pissed off at Dunleavy, if they have thought this through. 

There's also an interesting question to me as to whether they are getting full value for this service.  Take the Acker deal specifically.  They bought a player (by some accounts a promising prospect) and a second round pick, and it cost them $450K.  That sounds like a pretty good deal, right?  Well, on Detroit's side of the ledger, they lost the player and the pick, and saved over $5M!  It's a good deal for the Clippers - but it's a GREAT deal for the Pistons.  Seems to me like they left some money on the table.

Of course, if the Clippers don't do these deals, there's no guarantee that another team wouldn't.  The Kings just did a similar deal for Sam Cassell, although Boston's incentive was more to free up a roster spot since they're still way over the threshold. 

I want to re-visit the Darius Miles situation quickly as well.  The Clippers, as I've pointed out above, have been doing deals that have cost most of the league money.  The Grizzlies did the same thing when they traded for Shaun Livingston, but they more than made up for it by signing Miles.  When Miles' $9M went back onto Portland's books, basically the entire amount went into the tax distribution pool.  Split 23 ways, that's about $391K for each NBA team. 

I'm a big believer in the law of unintended consequences.  The NBA has worked hard to try to establish rules to help keep the league competitive.  But there's no way that anyone wanted all of this crap going on.

UPDATE: A couple other tangets - minutiae to the minutiae if you will.  Now that Samb is gone, someone with better information than I could do a near-final reckoning on that deal.  How much money did the Nuggets send to the Clippers?  Did it cover his salary and the lost luxury tax pie slice?  It was always a long shot of course, and he got his chance given all the injuries.  But now he's gone.  Finally, one cost that you have to bear in mind for all of these deals is the roster spot.  That's why Boston dealt Cassell.  Samb was taking up a roster spot while he was here.  There are only so many you can use, and they start becoming precious when you're hit with injuries, as the Clippers have been.  What did the Clippers get out of having Cheikh Samb on the team?  Well, he did help win that OKC game. 

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