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Trade Deadline – Preaching Patience

Alex Harari

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Del Demps, vice president and general manager of the Pelicans, answers questions during their NBA basketball media day in New Orleans, Monday, Sept. 25, 2017. (AP Photo/Doug Parker)
AP Photo/Doug Parker

The trade deadline is tomorrow and this year will be weirder than most. We’ve already seen the Pels move for Mirotic and as Zach Lowe referenced yesterday, a lot of teams feel clogged. So let’s spend some time looking at why teams feel clogged, what that means for the Pels this year, and what it should mean as the team moves forward.

How We Got Here

The NBA signed new multi-billion dollar TV deals that went into effect a few years ago. The players had the choice of smoothing the cap to account for the growth or go for big jumps. The players went for big jumps. With this extra cash, the salary cap jumped from $70 million in 2015-16 to $94.1 million in 2016-17. The cap went up only $5 million from last year to this year and currently sits at $99 million (and rumors suggest it would have been $101 million if the Cavs pushed this past finals to 7 – just another reason to hate Golden State).

The players who made the call to do the big jump might be regretting it as they look at what teams can offer them this season. Teams spent big during the summer of 2016 (hey Solo and Moore) and it’s now coming home to roost. Numerous teams are over the cap and several of them are approaching the tax. Some are perilously close to the tax (like the Pels), or way into the tax (think Golden State).

Teams are going to be stingy this summer because being in the tax is something that scares a lot of teams. The NBA has a penalty for teams that are consistently in the tax and the repeater penalty can take a big chunk out of an owner’s bank account. Take the Cavs this year. With all the rumors about the Cavs needing to add talent, they need to cut salaries too. For every extra dollar the Cavs take on in salaries from trades they might make today or tomorrow, they need to pay up to 4x for each dollar. So adding $3 million in salaries is really taking $12 million from Dan Gilbert’s bank account. If you want to see more of how the tax works, read up here.

League Impacts

Most contracts are generally structured to increase slightly over time, so a team that might be close to the tax this year will likely be in the tax next year if they keep their same team. Which means GMs have to be creative about how they add talent, not because they don’t want to pay to add talent to their roster but because they will be limited in their method to do.

On the Woj podcast on Friday, Woj and Bobby Marks were discussing Marcus Smart. Smart is a guy who plays outstanding defense but can struggle shooting. In previous years, he may have commanded between $12-$15 million for his services. Woj and Marks were saying that Smart may have to settle for a team willing the pay $8 million, which is the mid-level exception for non-tax paying teams. And with several teams close to the tax, there will be few teams that can even offer the full $8 mill.

Impacts for The Pels

The Pels have already done one smart piece of business this season in trading for Mirotic. As Jake outlined the other day, the Pels are already close to the tax. With the financial restrictions the Pels would face (assuming they re-sign Boogie), it would have been tough for the Pels to add players of Mirotic’s level during free agency, as they would be one of the teams that can’t use the full MLE.

As of right now, the Pels have the following cap situation for next year and the cap is supposed to only go to $101 million.

Pels Contracts in 2018-19 (Data from Hoops Hype)

All told, the Pels are pretty restricted by dollars already for next year. A good GM has his eyes not just on this year but also on the next few years. So Dell needs to think not only about this trade deadline but also about the upcoming free agents this year and next.

Current Trade Deadline – Eyes on 2019

The Pels could go for a rental at any position since Liggins and Okafor might not be the options moving forward, but that would cost the Pels the second rounder they got back from the Mirotic trade. And even if the Pels got back a player with Bird Rights (meaning they could go over the cap to sign them), the team would be going deep into the tax to pay for them. Without Cousins, it might not make the most sense for the Pels to be uber-aggressive as the most successful they could be this year is winning their first round series in the playoffs [sorry to be a killjoy].

And tying up your finances now means that you won’t be in play for good players that come available next season and in the free agent market in 2019. As Lowe and Woj discussed on Lowe’s podcast on Monday, there are going to be a lot of bargain contracts offered this year to really good players since teams just don’t have money. Guys like Smart, Avery Bradley, etc. might go for short-term deals to a) see what it’s like at a situation and b) make themselves available in 2019 free agency when teams should have more money. So there should be several guys available during next season for rentals that would be good fits on this Pels team, even if the cost might be a little steep.

It’s hard to be patient as a fan, especially a fan of a team with Anthony Davis. It feels like the clock is always ticking down to the moment Davis tells us all that he’s leaving New Orleans, but the way to keep him for the future might just mean waiting out this deadline and free agency. Raby made the point yesterday  that Dell might have saved his job with his current moves. He can secure it for the future by being patient for this trade deadline.

Alex Harari is a converted Pelicans fan, hoping this team won't let him down like the Knicks always did.

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