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Breaking down the assets from the Nets trade

John - Red's Army (@RedsArmy_John) July 16, 2013 Celtics News 27 Comments

cs intro new guys

The trade is done, the guys have been introduced, and now the process of moving on begins (well, maybe it begins after the Nets introduce everyone on Thursday).  Now we’re starting to get a better feel for what the Celtics really got out of this deal.

I’m hoping this post can be a handy guide for fans who are trying to figure out what the C’s got as far as “assets” and how they can be used.  Maybe this can help ease the pain of watching Pierce and Garnett in Brooklyn.

Asset #1:  A $10.3 million trade exception

What is a trade exception? If you don’t want to drown in legalese, you can read Larry Coon’s detailed explanation in his indispensable NBA Salary Cap FAQ. But trade exceptions essentially give teams a one-year window in which to complete a trade by acquiring the difference in salary sent out.

The creative wizards in the Celtics’ front office — a group helmed by president of basketball operations Danny Ainge, assistant general manager Mike Zarren and director of player personnel Austin Ainge — were able to structure the Nets deal in such a way that a trade exception was generated for the difference in salaries between Paul Pierce ($15.3 million) and Keith Bogans ($5 million). Understanding exactly how that happened and why it works is enough to make you go cross-eyed. The bottom line is that Boston now has the ability to absorb $10.3 million worth of salary so long as it does so within a one-year window that started with Friday’s official consummation of the trade.

It’s tough to explain, but basically, the Celtics made this monster deal and walked away with the ability to acquire another player, from another team, that makes $10.4 million (the exception, plus $100,000).  You can’t combine this with another exception, or another player, or another anything.  It can, however, be broken down into smaller pieces.

So the Celtics can’t use this to get a $15 million guy, but they can use it to get a $7 million guy and a $3.4 million guy.

IMPORTANT NOTES:  

The Celtics cannot use the full $10.3 million exception right now because they are hard-capped at just under $76 million due to the sign-and trade for Keith Bogans (sign-and-trade deals trigger a mechanism in the CBA that forces teams to be under the tax apron, which is $4 million above the tax line.  This prevents big-spenders like the Nets to do a sign-and trade deal.)

The exception expires in one year.  So if the Celtics don’t use it to acquire anyone by July 12, 2014, it goes away.

Asset #2:  Kris Humphries, and his $12 expiring contract

Kardashian jokes aside, the kid is a 10-year vet who can reasonably be projected to produce a double-double with adequate playing time.  He’s 28 years-old, so he’s in the prime of his career.  And one aspect I haven’t heard anyone mention as a big plus is the other side of the “expiring contract” coin…

“Contract year”

This could be Hump’s last chance to get himself a big-money contract.  That’s valuable in one of a couple of ways:

  1. A team could understand that he’s playing for a contract and move to acquire him for a full season before he hits free agency.
  2. He could play for a while with Boston and put up big numbers, thus increasing his trade value.  

I know a lot of us want to crap all over the guy for various reasons, some of which he brought upon himself.  In pure basketball terms, though, he’s a very valuable commodity on the trade market.

IMPORTANT NOTE:

League rules prevent Humphries from being traded with anyone else for two months.  He can, however, be traded on his own immediately.

Asset #3:  Keith Bogans and his $5 million “expiring” contract

How did Keith Bogans hit the lottery in this deal and suddenly make $5 million?  It’s because he’s a “base year compensation” player.  In a nutshell, when the teams were about $2.5 million short salary-wise in the deal, they needed to make that up in a sign-and-trade with Bogans.  But because Bogans is a BYC guy, only half of his salary counts towards matching salaries in the deal.  Thus, he was paid twice what was needed.

Congrats, Keith.

Because it was a sign-and-trade, it needed to be a three-year deal, and the first year had to be fully guaranteed.  And while this windfall makes it seem like the C’s are way overpaying Bogans (and they are), it’s also a very useful trade tool for the Celtics.  Moving forward, his $5 million counts as the full $5 million towards future trades.  And because the second and third years of his deal are fully non-guaranteed (with no trigger dates to guarantee any of the cash), this deal is for all intents and purposes an expiring deal for the Celtics.

Now, the Celtics have $17 million combined in Bogans and Humprhies that could bring back as much as $21,250,000 in salary… a.k.a. a maximum-contract player.  Using 2013-14 salaries, that means there are only five players the Celtics could not trade for with the combination Humphries and Bogans:  Kobe Bryant, Dirk Nowitzki, Carmelo Anthony, Amar’e Stoudemire, and Joe Johnson.

That’s not to say other teams would.  I’m just saying that a team interested in clearing $17 million in cap space could part with a star player in exchange for those two guys.  Bogans’ deal is extremely valuable in that regard.  Expiring mid-level contracts can often be the difference between getting deals done, and deals falling apart.

IMPORTANT NOTE:

Because it was a sign-and-trade deal, Bogans cannot be traded until December 15.

Asset #4:  The Draft Picks

The Celtics received Brooklyn’s 2014, 2016, & 2018 first rounders.  They also have the right to switch with the Nets in 2017.  That means if the Nets manage to grab the 5th pick in the 2017 draft and the Celtics have the 10th pick, the Celtics can switch places and take #5.

Important Notes:

  • Atlanta has the right to switch spots with Brooklyn in 2014 (the exact same way I just explained).  As unlikely as it is, if something happens and the Nets implode, the Hawks could steal the pick if it’s better. 
  • The 2016 and 2018 picks are fully unprotected.  If, for some reason, the Nets go down the toilet and hit rock-bottom in a few years and become a lottery team, the Celtics would own those lottery picks between 2016 and 2018.

Asset #5:  Kris Joseph’s un-guaranteed $788K

He’s already been waived.  Sorry, kid.  The move saves the Celtics $788, 872

Asset #6:  MarShon Brooks

I’ve already talked about Brooks’ abilities and possibilities.  He’s a 24 year-old kid that costs the Celtics $1.2 million next season.  At a time where the team is in a bit of flux, a $1.2 million flier on a 24 year-old with potential is a virtually no-risk proposition.  And because the team holds the option on his contract next year, you can even consider his deal expiring if the Celtics, or another team, want to save some money by declining that option.   Even if that option is exercised, his salary next season is $2,179,354… which is very manageable.

Asset #7:  Gerald Wallace

This is the least valuable acquisition of the trade because he make $10,105,885 per year in each of the next three seasons.  The Celtics may find a trade partner for Wallace’s services should he prove himself to be a valuable contributor over the course of this season.  They may need to attach something of more value to entice teams to take him off their hands, though.

IMPORTANT NOTE:

League rules prevent Wallace from being traded with anyone else for two months.  He can, however, be traded on his own immediately.

In conclusion…

Wallace’s inclusion in the deal is the cost of doing business.  The Celtics acquired some very valuable pieces in this deal, but you don’t just get to do that for nothing.  Wallace’s contract was the price of admission for 2 very trade-able deals, three first round picks and the chance to improve your position in a 4th draft, and a $10.3 million TPE.  You may not like that he was included, but if he wasn’t, then none of the other stuff would have been possible.

The Celtics are CLEARLY not done making moves.  But they’ve acquired some very valuable pieces for two players who, while beloved, may not even be Nets at this time next year.  They’re also banking on Mikhail Prokhorov’s eventually fading appetite for paying massive luxury tax bills.  The 2014 pick is nice, but it’s the 2016, 17, and 18 picks that we should really be focused on.

The Nets are paying $83 million taxes this upcoming season.  Next season will be their third consecutive season paying the luxury tax, which will trigger the “repeater tax” I keep talking about.  They have EIGHT players currently under contract for the 2014-15 season for a guaranteed $83 million.  Even if we assume that luxury tax line goes up to, let’s say, $73 million… the Nets are already committed to $26.25 million in taxes next year for those eight players with a tax rate starting at $3.50 per dollar it spends after that.  A single $5 million player would add $17.5 million to their tax bill.

That’s a LOT OF MONEY.  Even a billionaire like Prokhorov has to, at some point, decide that he’s not going to hemorrhage money on a non-contender.  The 2015-16 season could be the year they decide to blow it up and start over, which is where the unprotected first-rounders start to come into play.  Meanwhile, in three years, the Celtics may well find themselves on the up-swing and back in “contender” status.  Suddenly, there is a very real possibility of the Celtics being a contending team spending consecutive years in the lottery.

Timing is everything, and the timing here could work out very well in Boston’s favor.  This upcoming season, even with Wiggins, et al.,  looming in the 2014 draft, isn’t necessarily the main focus.  This is a transition year that is really setting things up for the future.  There are obviously a lot moving parts and a few hopeful assumptions in all of this.  Things can certainly take turns for the worse along the way.  But all in all, the Celtics have set themselves up fairly well as they start this rebuilding process.

 

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  • Curt Hays

    Very helpul breakdown, John. I will use this information with my friends to sound like one of the most informed basketball fans in town.

  • kyledaustin2440

    Great breakdown. K-Love would probably be the only player in the max / near-max range that I’d go after with Bogans / Humphries expiring deals (and that’d only be possible if their shot at competing in the West goes way wrong this year). Not likely… Only other option I see at the top of that list that’s slightly attractive is Aldridge (and seems like he’s available for the right offer).

    • piecz

      What about Lamarcus Aldridge?

      • CoachAJ

        Do you think Portland or any other team is going to give away their best player for anyone not named Rondo?

        • Raoul

          Be more specific… going to give away their best player for Humphries and Bogans lol

          • CoachAJ

            I know right, that won’t happen.

        • piecz

          There were rumors that he’s unhappy in Portland. Use combination of expiring contracts and picks ?

  • eddysamson

    I think with the exception of the Vitor Faverani signing, everything Ainge has done this summer has been PERFECT to set the rebuild in motion. I expect the roster to have enough watchable players (Rondo, Sully, Green, Olynyk, AB’s D, maybe Brooks?) to still keep me watching every game. And then who knows, 2014-2015 and 2015-2016 could be back to some truly exciting Celtic basketball.

    • Raoul

      Perfectly said, with the inclusion of the Vitor comment. I think that was a pointless signing. But who knows, we might be eating his junk in the next few months.

  • Brian Pahlm

    Ah so we do get the trade exemption.. I know a lot of guys were saying that wouldn’t happen but I think that was due to the media stopped talking about it awhile back. So it looks like all the parts are in place to get this team back to where it should be, with a healthy young core, and no ugly long term deals. The draft picks and expiring contracts will be packaged with the guys we want to get rid of and see what can happen. As I said before a starting 5 of Olynk Sully Green Bradley and rondo is a 7/8 seed. I’m ok with that his year if it means we bring in help the following year, as it will help that unit gel. No matter what we are not going to win the championship next year so we might as well build for the future. With Free AGENTs going from one team to another every 3 or so years, trying to model what the spurs do seems like the best way to be a contender not for just a few years but every year. Thanx again for the Post John, A+ as always…

  • LA Flake

    Good deal. It’s still going to kill me to see PP & KG in anything other than green next year though.

  • Tony

    Let’s not forget Jordan Crawford’s expiring $2M+ when tabulating expiring deals.

    • Raoul

      True but this was specific to the Nets trade

  • Aye Run

    good analysis. wallace’s K doesn’t concern me much. with as many assets as you’ve identified, wallace’s k is small beer

  • wil

    Might actually be a great time to get these expiring deals and trade exception, im sure there will be teams willing to tank it out. You guys should write about potential trade targets for these assets.

    Gordon Hayward maybe one, though im sure we can get him through free agency next off season. Underrated, got alot of heart and most likely a border line allstar.

  • CoachAJ

    Great breakdown, hopefully we won’t see anymore outlandish trade scenarios. Thanks for the information.

  • frickenWaaaltah

    The trade exception is bizarre. I think the league is taking pity on the Celtics and/or greasing their wheels for loading up Brooklyn. There shouldn’t be any possible way to get one.

    This is really fishy. Even if they were allowed to split up the deals, they still can’t make a lopsided deal because both teams were starting over the cap. But teams aren’t allowed to make contingent deals so you can’t split one deal up into multiple deals to game the system.

    Altough it doesn’t matter, because they won’t use the trade exception this coming season or they’ll have to pay luxury tax, so it will probably expire unused.

  • frickenWaaaltah

    Ok new take: I think Chris Forsberg must just be wrong about the trade exception. He doesn’t provide any source to support the strange assertion that one exists. Meanwhile, on NBA.com the deal is listed as a single transaction on July 12th, just the way it should be:

    http://stats.nba.com/transactions.html
    “Boston traded Paul Pierce, Kevin Garnett, D.J. White, and Jason Terry to the Brooklyn Nets. In return the Celtics received Kris Joseph, Kris Humpries, Keith Bogans, Gerald Wallace, and MarShon Brooks. In addition the Celtics also receive the Nets 2014, 2016, and 2018 first round picks, with the right to swap their 2017 first round pick.”

    • Curt Hays

      I just realized that this trade happened on my birthday. WTF, Danny?? You trade away my favorite player (KG, duh) since Larry Bird…on my birthday? Thanks for crapping on my lawn.

  • RedsLoveChild

    This was a great trade for Boston…those picks in the later years will be lottery picks. Bank it.

    The Nets were just eliminated by Chicago without Derrick Rose…they are hopelessly insane if they think adding KG & PP {at age 37/36} will put them over the top! KG/PP will defy all odds by just surviving the season.

  • Raoul

    Mmmm Ainge taking a page out of Red’s book. Celtics had the second overall pick after a Championship…. Len Bias

  • Robert

    Agreed. They may have got a lot of nice trade assets but they are worthless if no other team wants them. Overpaid Bogans, Overpaid and universally hated Humphries, WAY overpaid Wallace? Nobody wants any of that garbage!
    And I’m sick of people calling Humps a double double machine. He averaged 5 and 5 last year! Why do people think he will get mins here? We have to play Sully and Olynyk so they can develop. The only way for him to get those mins is if those two aren’t working out or are hurt, either way it’s NOT good. We also have Bass and Shav who could both be better than Humphries next year.
    Just say it like it is. The trade was for the picks, and maybe the exception, the players were Albatross throw ins forced upon the Celtics. Except for maybe Brooks these players are not assets, they are cement shoes.

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  • Future Celtics GM

    I don’t understand why you think the Celtics aren’t tanking, and any good reason why they shouldn’t??

    As a management decision, wouldn’t it make sense to bench all the old Nets (sans Brooks) and play all your young talent, delay Rondo’s return and develop Jeff Green as a All-Star/Top 10 MVP candidate?

    I think you right off this season as nothing more than an opportunity to develop your young guys skill, CONFIDENCE, and experience. Consider this as a VALUABLE asset as theu develop into higher trade chips (be inflated stats because of inflated playing time) or they actually develop into cornerstone’s for Boston’s future.

    Give AB full reign to develop, let this year gauge if he really will be a starter caliber or tradeable.

    Same for KO, Melo, Brooks and whatever young (potential-filled) player we will have on the final roster.

    There is zero point to playing Bogans or Humphries.

    Also, develop Jeff Green as a Number 1 option and see if he has the potential KG saw in him as “one of the all time greats”. I see him as having the POTENTIAL to be a solid player to build around. Pair that with Rondo as the KG like soul/passion/fire of the team and Captain. You may be on to a solid future with these two as elder statesman while new talent develop under them in future years.

    Now the added benefit of this plan, is the Lottery. I’m not saying purposefully tank. I’m saying be realistic and STRATEGIC. You won’t be a playoff threat with this roster. Don’t waste a minute of playing time for players with no reason to either:

    a) develop as a player for the future

    b) increase trade value

    c) give a “test-run” to really determine value and future potential (ie who cares if Melo blows 5 games for us, better to find out if he’s worth keeping or dumping

    d) BUILD CONFIDENCE

    Lastly, apply the Greg Pop system and give EVERYONE a chance to prove their potential and worth. Doc’s biggest flaw was lack of trusting and giving people opportunities. I predict C.Lee has a breakout season because he will be used as chess piece that he is an not forced to function as a bishop when he may really a knight. I believe with our new coach we have the College mentality of earning your roster spot and opportunity based on actual output and not on fame.

    This season may be a lot more exciting if we accept it as what it is, a an experiment for growth. Low expectations. Remember how Michael Jordan became Jordan. He was on a bad team with no expectations for many years and just given free reign his first few years with no expectations or pressures to develop with freedom to shoot and play at will. I think if he was drafted in 1984 to Boston he never would have developed these opportunities and MAY have never become “Michael Jordan”, but merely a Sam Perkins. Confidence is the most important thing to develop for a newbie to the NBA. This is the year to do it for the Newbies as well as the likes of J.Green and C.Lee’s.

    Daniel Lavi

  • swissflix

    funny how Ainge gets praise all of a sudden.

  • Jason_Brighton

    essentially Danny took a risk, but he could well be one of the greatest GMs in history after assembling the 2008 team and this trade. The Celtics have the chance to build a franchise with these picks

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