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More Musings on the Salary Cap in Light of the Marion Trade

NBA Salary cap esoterica two days in a row!  How lucky can blog readers get?

First of all, I have to point out the irony here.  Over a week ago, multiple sources confirmed the trade of Zach Randolph from the Clippers to the Grizzlies for Quentin Richardson - viewed in these parts as an almost universally positive trade for the Clippers' future.  Before that trade is even allowed to happen based on the league-wide moratorium from July 1 to July 8, Clips Nation starts dreaming of ways to use the $7M trade exception that will be generated.  In a thousand word post, I lay out all the reasons that the Clippers might want to use said trade exception on Shawn Marion and why they might have a chance at getting the former all star.  The post generates 140 comments, and the attached poll generates over 700 votes.  By the way, 58% of you liked the idea of a one year deal for Marion, but only 14% would have been willing to offer more than a year.

Here we are, just a couple of days later, and Marion is being traded to the Mavericks BEFORE the Randolph trade is even consummated, meaning that Marion will have landed safely in Dallas before the Clippers even have the trade exception to offer.  Memphis, Randolph's eventual destination, is playing the key role in facilitating what I had described as an almost impossible transaction.  And as if that's not enough irony, when the transaction is all done, Orlando will walk away with a large trade exception of their own, creating more competition for the Clippers if a decent, semi-expensive player suddenly becomes available in a fire sale within the next year.

So somebody around here definitely jumped the gun in speculating about Marion.

But for the time being, I'm really fascinated by the Marion trade and what it says about the league.  Let's look at it from the perspective of each of the four teams involved.  (Note that the details are still a little sketchy as I write this.  The trade will no doubt be completed in a different form mere seconds after I post, but I'm doing my best with the information I have.)

[Note by Steve Perrin, 07/09/09 1:44 PM PDT ] Now that the trade is official, there are a couple of final details I can add.  Additions after the original post are in italics.  It's worth noting that the only additional player in the deal, Nathan Jawai, would seem to reduce the amount that can be paid to Marion, who only ends up a bit over the MLE by my math - that's a head scratcher.

The Dallas view - This is the easy one.  Why is Dallas doing this?  Because they covet Marion.  And really, it's not a bad gamble.  They're already pretty much all in with an aging roster by re-signing the 36 year old Jason Kidd to a $25M/3Y deal.  So bringing in the 31 year old Marion for $39M/5Y is just re-iterating what we already knew - Dallas is desperately trying to keep their window of opportunity open NOW (the one that seemed to slam shut when the Warriors bounced them in the first round in 2007) - and they don't care how much it costs or how it affects their long term prospects.  The Mavs get some cash in the deal from Toronto, and send cash back out to Memphis and Orlando.  It's safe to say Dallas sent out more than they got back.  The Mavs-specific trade, as far as I can tell, looks something like this:

  • Gain - Shawn Marion ($6.4M $6M), Kris Humphries ($2.9M), Greg Buckner ($4.1M), Nathan Jawai ($.4M), CASH  Total = $13.4M
  • Lose - Jerry Stackhouse ($7.25M), Devean George ($1.6M), Antoine Wright ($1.8M), CASH Total = $10.65M

The Toronto view - What is Toronto's incentive to make this deal happen?  Obviously, they have to facilitate the Hedo Turkoglu signing ($53M/5Y), and they have to find the money to do so.  BUT, they could have done nothing, renounced Marion, and accomplished that goal.  So why are they jumping through these hoops?  Getting rid of Humphries is part of it (by the way, I want to point out that almost two years ago I called the Raps' extension of Humphries 'strange').  Marc Stein and Chad Ford state that Toronto is working this out to help sign Carlos Delfino:  "Assembling the trade this way could also enable Toronto to re-sign Carlos Delfino, after it appeared that the Raptors would have to renounce Delfino to help make room for the Turkoglu signing."  This is a feat bordering on magic.  I'll get to it when I look at the trade from all four perspectives.  Because of Toronto's now pretty strong incentive to make this happen, they sent cash to Dallas to grease the skids.

  • Gain - Hedo Turkoglu ($8.3M), Devean George ($1.6M), Antoine Wright ($1.8M) Total = $11.7M
  • Lose - Shawn Marion ($6.4M $6M), Kris Humphries ($2.9M), Nathan Jawai ($.4M), 2016 2nd Rounder, CASH Total = $9.3M

The Orlando view - So what's in it for the Magic?  They were already resolved to losing Turkoglu when they signed Vince Carter, so why play the game?  Well, as is becoming more and more common in the NBA, teams are structuring trades instead of outright free agent signings because of the trade exception created for the team losing the FA. 

  • Gain - trade exception, CASH
  • Lose - Hedo Turkoglu ($8.3M)

The Memphis view - Ah, Memphis.  Thank the FSM for Memphis.  Without Memphis, all of the talk about franchise level parsimony and incompetence would be focused squarely on the Clippers.  Why is Memphis going along with this rule-bending deal?  After all, none of this could happen without them, and they're helping a DIVISION rival in Dallas.  The answer will end up being pretty simple - MONEY.  Having said that, we'll probably never know exactly how much money is involved since those details are rarely disclosed, but I'm having trouble understanding how it would be enough to help a division rival so much.

  • Gain - Jerry Stackhouse ($7.25M), 2016 2nd Rounder, CASH
  • Lose - Greg Buckner ($4.1M)

The Consolidated view - First of all, I'm guessing on the starting salaries of Marion and Turkoglu (all other salaries are from ShamSports, and I rounded a little).  Basically, I did the math on allowable trades, plugged in the biggest number Turkoglu and Marion could get, and those numbers came out in the ball park for the total deals reported for each (including 10.5% raises, a major advantage to the S&T as opposed to a FA signing which only allows 8% raises).  I have to admit, this is a clever trade.  If you'll notice, three of the four teams are adding more salary than they are shedding.  For Toronto and Dallas, the difference is within the 125% plus $100K margin established for trades in the CBA.  For Memphis, it is not, but since they're under the cap, they're allowed to take on additional salary.  I've never seen a trade quite like this before - Orlando ends up with the big trade exception, but it's not coming from any single team.  All three other trade partners are essentially kicking some money into Orlando's exception.  Like I said, I haven't seen it before, but it's perfectly legal as far as I know. 

So, after working through everything, it appears that Toronto does indeed get to keep their mid level exception - that's huge for them.  Basically, they just figured out how to trade Marion for Turkoglu (with help from Memphis), so they don't have to clear cap space or renounce anyone or anything like that.  So they're incentive to play is now obvious.

In the end, Memphis is the lynchpin - and their participation looks dubious.  The most cash that can be included in a deal from any single team is $3M.  We can safely assume that Cuban would not blink at that amount to get his man.  Stackhouse is only guaranteed $2M if he's waived, which of course they will do.   But based on the reporting from the earlier Randolph trades, it's my understanding that Buckner only has $1M guaranteed on his deal.  So if both players are waived as expected, the Grizz pay $2M to Stack, save $1M on Buckner, and pocket up to $2M of the max $3M Cuban might throw their way.  So I hope $2M is worth it to them.  Not to mention that Buckner's contract ($4M in trade value, but only $1M guaranteed) was pure gold on the market - they could have gotten a good player for that.  Instead, they burned that trade piece, and helped three other teams including a division rival, for at MOST $2M.  Tough times, Heisley?

As Eric Pincus tweeted and Ramona Shelburne and others have reported, all of these machinations have delayed the Randolph for Richardson deal.  If the trade really goes down as reported (i.e. as I've outlined above), Memphis will still have plenty of cap space to absorb the extra salary in the Clippers deal.  In fact, it seems like they're being overly cautious on this - I can't see any particular reason that they have to complete this deal first, but the overall complexity might have made them worry that they would.  They may waive Stackhouse before trading for Randolph, but again, by my math they don't have to.  It's important to note that everyone is involved has stated that Randolph will be a Grizzlie - this is just delaying the transaction - but I'm sure we'll all be a little nervous until that deal is done.

Finally, it's worth noting that Marion is getting a five year deal worth $39M - I suspect that very few in Clips Nation would have liked that contract.  So the idea of lowballing him into a one year deal was pure fantasy - he got a much better pay day from a better team.  Good for him.