The nature of the Clippers’ dilemma with two-way contract player C.J. Williams is well-documented at this point. Two-way contracts, which are additional deals that NBA teams may sign on top of their 15-man roster, allow a G-League player to be under the control of an NBA team (normal G-League players are free agents), and transferred back and forth between the NBA and G-League teams. To prevent these deals from simply becoming additional roster spots for full-time NBA players, the league caps the amount of days that a two-way contract player can spend with the NBA team at 45. This quota includes game days, but also days where the player participates in travel, practice, or team meetings with the NBA team.
If a player hits his 45-day allowance, and the team wants to keep him, there’s a rule built in for that: any two-way contract can be converted to a rest-of-season minimum-salary contract. All you need is an opening on the 15-man roster for that player to move in to, which the Clippers have. Unfortunately, however, a rest-of-season minimum-salary deal carries a cap hit, which a two-way contract does not. And for a team like the Clippers, who are narrowly underneath the luxury tax threshold, that’s a big deal. Adding a minimum-salary deal would put the Clippers into taxpayer territory, where the penalty for every dollar spent over the tax line is $1.50. Williams’ salary would be a pro-rated amount of the rookie minimum ($815,615) but his cap hit for tax purposes would be a pro-rated amount of the 2-year veteran’s minimum ($1,471,382). That means that a rest-of-season deal for C.J. Williams would cost the Clippers about $400,000 in salary (pro-rated rookie minimum), and $900,000 in luxury tax payments (the pro-rated cap hit, minus the $120,000 in space the Clippers have below the luxury tax line, multiplied by 1.5 for the tax penalty).
That’s... not very much money when you consider the value that Williams has brought to this team. Hell, he already hit a game-winner earlier this week against the Hawks. That shot alone has gotta be worth at least a million dollars.
The problem is that the Clippers are eligible for the NBA’s repeater tax, which raises the penalty for going over the tax threshold. That means that instead of a $1.50 penalty, there would be a $2.50 penalty—so pull that tax payment up to $1.5 million. Still, that’s palatable.
Here’s what’s less palatable: as the Clippers try to build their team long-term, those repeater penalties are going to be costly. Between the increased penalties in the years to come, and the inability to collect luxury tax revenue sharing checks (the payments of luxury tax teams are distributed equally among non-tax teams), keeping C.J. Williams for the second half of this season could end up costing Steve Ballmer upwards of $50 million in the next half-decade.
As time runs out for the Clippers to figure out which direction they want to go with C.J., let’s take a look at their three options:
This is, of course, the easiest way to keep C.J. Williams around—sign him to a rest-of-season contract. Unfortunately, it brings with it all the negative luxury tax consequences I described above. The team could probably dodge those tax penalties by getting rid of some money elsewhere, but it could get tough.
The only way for the Clippers to shed salary at this point in the season is to trade away a contract. If they cut a player, their salary stays on the books, and it’s too late to use the stretch provision on salary for this season. Injury exceptions, like the one the team got for Patrick Beverley, give you another tool with which to acquire a player, but don’t remove the cap hit of the injured player, so that isn’t particularly helpful in this case. It has to be a trade.
If the Clippers can take back less salary than they send out in a trade, they can open up enough room to sign C.J. Williams. This could mean a massive DeAndre Jordan trade where the Clippers bring in less than D.J.’s salary, or a minor move where the team dumps Brice Johnson or Willie Reed’s deals for nothing. Johnson is probably more difficult to move, meaning the Clippers might have to include a second-round pick to get the deal done. Willie Reed has on-court utility, and his minimum-salary deal can be absorbed by any team with a roster spot, but he’s also a valuable depth piece. The Clippers could be hesitant to move Reed, a backup center, while Jordan’s status is still up in the air.
If the team wants to sign C.J., it would be better to do it sooner, rather than later. Williams is using the 42nd of his 45-day allowance tonight against the Golden State Warriors, and if the Clippers send him down on off days, his 45th and final day would be January 15th against the Houston Rockets. A week from today, when the Clippers take on the Denver Nuggets on January 17th, he will not be able to play unless he has a new contract. Additionally, the deadline to sign new two-way contracts is January 15th. If the Clippers move C.J. onto the NBA roster full-time, it would make sense to do it in the next four days so that they can sign someone else (perhaps standout Agua Caliente SG/SF LaDontae Henton) to that two-way contract slot.
But that doesn’t necessarily mean that a trade has to happen in the next four days. Taxpayer status is determined at the end of the season, so the Clippers can avoid the repeater tax if they spend into the tax and then drop back out of it at the trade deadline. It would be risky though—it gives future trade partners increased leverage, and there’s no guarantee a deal would get done to help you dodge the tax.
This would suck. C.J. has now played in 27 games for the Clippers, starting 12 and averaging 19 minutes per night. In the team’s last 13 games (during which they’ve had a 7-6 record), he’s logged 11 starts, and averaged 29 minutes and 9 points per game, being a really solid glue guy on the wing. He hit a game-winning three against the Atlanta Hawks on Monday. Doc Rivers clearly trusts him and has given him starts and minutes over players like Sindarius Thornwell, Wesley Johnson, and Sam Dekker. Frankly, if the Clippers ever get healthy, I could see him being the 7th player in their playoff rotation (assuming Patrick Beverley is the only player who doesn’t return), playing both wing positions off of the bench. How do you move on from a guy like that?
Only if you have to.
If the Clippers aren’t convinced that they’ll be able to get underneath the tax by the deadline, and they are adamant about staying under this season, then one can see how they’d decide to cut him. With his 45 days running out, and the team super shorthanded (they’re playing a 9-man rotation), they can’t really afford to have a two-way contract spot sitting unused. So, they could choose to release C.J., and let him become a free agent, where multiple teams would surely be interested after seeing what he’s done for the Clippers this year (they could also trade C.J.’s contract to a team that is willing to convert him to a rest-of-season deal, if another team is willing to give up a second-round pick for him). If cut C.J., it would likely be on January 14th or the morning of the 15th, so that they can sign a replacement two-way player before the January 15th two-way contract deadline.
Send Him Back to Agua Caliente
This option is probably the last appealing to C.J., and it presents some problems for the Clippers as well, but it’s a safe way to keep him within the organization. When a player hits their 45-day limit, the team is not obligated to either convert or release them. Instead, the Clippers can just choose to not call C.J. up again for the rest of the season, and have him serve the remainder of his two-way contract with the Agua Caliente Clippers of Ontario.
This is kind of a lame outcome for C.J., who would probably be able to land a shot with another NBA team relatively quickly if he became a free agent, but it’s allowed within the parameters of the contract he signed with the Clippers. And for the Clippers, it would mean continuing to use a two-way contract slot on a deal that has very little NBA utility, as they wouldn’t be able to bring him up for any more days.
However, there’s one upside: the Clippers could retain control of C.J. so that he could join the team later on this season. He would play the night of the 15th against the Rockets, and the morning of the 16th re-join ACCO indefinitely. If at any point between now and the trade deadline, the Clippers happen to make a move that gives them additional room underneath the luxury tax line, they could then convert C.J.’s two-way deal to a rest-of-season deal, putting him on the 15-man roster and making him available for the rest of the season. At that point, they would not be able to re-use that two-way contract slot this season.
Even if the Clippers don’t make a trade, they’d still be able to get C.J. back eventually. With the $120,000 in wiggle room that they have underneath the luxury tax line, the team could convert C.J.’s deal the last couple of weeks of the NBA season, giving him six or seven more regular season games with the team and making him playoff eligible.