FanPost

A Trade Scenario and Paradigm Shift

ASSUMPTIONS

For the purposes of this article, a few assumptions will be made:

1. LeBron James wants a max contract

2. LeBron James wants to win

3. LeBron James is willing to leave Miami to remain competitive for the duration of his next contract

4. The Houston Rockets want to add a superstar to their roster

5. The Houston Rockets want to maximize their assets

6. The Los Angeles Lakers want to be competitive next year

7. The Los Angeles Lakers value young veterans over draft picks

8. The Los Angeles Lakers would prefer to add players on one year contracts

9. The Los Angeles Lakers are willing to offer long-term contracts to the right players

LEBRON JAMES’ OPTIONS

With the recent news that LeBron James is opting out of his current deal with the Miami Heat, it is time to assess his potential landing spots. This is pure speculation, but it stands to reason that LeBron James is looking out for himself and his legacy. If that is the case, it is in his best interest to leave Miami as Dwyane Wade is declining and Chris Bosh is not good enough on his own to help James win another title. To land James, a team will have to either sign him outright or acquire him through a sign-and-trade. If he leaves Miami, the most fortuitous destinations for James are the franchises persistently linked to Carmelo Anthony, the Houston Rockets and Chicago Bulls.

Chicago’s title prospects appear to be exaggerated since Derrick Rose’s long-term future is impossible to project. Additionally, given that Chicago must, at the very least, amnesty Carlos Boozer and trade Taj Gibson (either through a sign-and-trade for James or in an unrelated trade) to clear the space necessary to acquire James, Joakim Noah will be the only valuable member of the Bulls. In this scenario, the Bulls’ roster does not constitute an improvement over the Heat’s returning roster.

Houston, on the other hand, is seemingly one star player away from title contention. While Houston has a fairly deep roster, the team is led by stars James Harden and Dwight Howard, who will be 25 and 29 years old, respectively, in the upcoming season. Both players are younger and more productive than the core members of the Bulls and Heat. James’ first year salary on a max contract with a team other than Miami will be $20.0 million. If Houston is to sign James, they must clear roughly $27.4 million plus cap holds for open roster spots. As the NBA universe learned last summer, superstars are willing to forego a 5th year on a max contract to sign with the Rockets, contend, and keep the team’s assets intact.

The players most likely to be traded to gain the requisite cap space are Omer Asik and Jeremy Lin, whose combined 2014-15 salaries are $29,797,876.

HOUSTON’S OPTIONS

If the Houston Rockets want to maximize their assets, they will not orchestrate a sign-and-trade for LeBron James. It is in the team’s best interest to gain an asset other than James in return for the players that Houston must jettison. Since reports have already made it clear that Houston does not expect much in return for Asik and Lin, a potential trade partner must both see the value in acquiring those players and have the requisite cap room to take on almost $30 million in salaries. The Rockets may also have to trade away other contracts so that the team can, theoretically, fill out 12 roster spots and remain under the cap by utilizing the league minimum cap hold of $507,336 per roster spot. For example, getting rid of Asik and Lin while signing James will cause a net reduction of $9,797,876 from the Rockets’ 2014-15 payroll. Given the holds for team options for Chandler Parsons, Patrick Beverley, and Troy Daniels, this payroll reduction gives Houston a 2014-15 payroll of $60,865,741 for 10 roster spots. The projected salary cap is $63.2 million for next season, leaving the Rockets with over $3.3 million to spend on its 2 remaining roster spots. Therefore, trading Asik and Lin without taking back any salary in return would allow the Rockets to sign LeBron James.

Unfortunately, this could become much more complicated if another team signs Parsons to an offer sheet before Houston can finalize its deal with James. Since Parsons is a restricted free agent, Houston has the right to match an offer sheet that Parsons signs. If Houston were to match any offer over roughly $3.2 million annually, it would not have the cap room to sign James to a max contract. So, if Parsons were inclined to leave or offered a substantial contract, he could sign an offer sheet that would impede Houston’s pursuit of James. This may force the Rockets to let Parsons walk.

Even if Parsons abstains from signing an offer sheet or extension until after James signs with Houston, the Rockets would be weak at point guard and Parsons would be relegated to the bench. The team’s projected top 8 players for 2014-15 and corresponding 2013-14 PER and EWA (according to ESPN) would be as follows:

Player

Pos

PER

EWA

Dwight Howard

C

21.36

12.8

Terrence Jones

PF

19.14

7.9

LeBron James

SF

29.40

27.3

James Harden

SG

23.51

18.0

Patrick Beverley

PG

12.43

1.2

Chandler Parsons

bSF

15.90

7.5

Troy Daniels

bSG

16.01

0.2

*Jarnell Stokes

bPF

N/A

N/A

*projected as 25th pick in the 2014 draft

The most obvious shortcoming of this projection is that it does not account for Houston’s mid-level exception, which the team would undoubtedly use to acquire a point guard as Patrick Beverley is, by far, the weakest member of the starting lineup. It is also worth noting that Lin and Asik would not rank as top 5 players in that lineup and that their combined EWA (5.1) falls drastically short of James’ 2013-14 total. Additionally, the non-LeBron members of Miami’s "Big 3" had a combined EWA of 20.9 last season, while Harden and Howard’s combined EWA was 30.8.

While this roster is appealing, Houston will have to decide if paying Parsons in the range of $7 to $10 million per year to be the team’s sixth man is better than trading Parsons for a good starting point guard. If Houston prefers to obtain a better point guard than Beverley at a lower cost than Parsons’ expected 2014-15 salary, the following scenario is logical.

POTENTIAL TRADE

The idea behind this trade is that it will allow Houston to sign James and draft a high-quality, yet relatively cheap, point guard. Additionally, this scenario will allow the Lakers to accomplish their seemingly conflicting goals of acquiring young veterans, becoming competitive next year, and only committing to short-term contracts. The validity of this last goal has to come into question as the Lakers are reportedly willing to chase Kyle Lowry, Eric Bledsoe, Lance Stephenson, and/or Greg Monroe in free agency. The reasonable conclusion from this is that the team will consider long-term contracts for the right players, but would like to be in a position to offer a max contract to someone in 2015.

Based on that information, the Los Angeles Lakers should trade the 7th pick in the 2014 draft to the Houston Rockets for Omer Asik, Jeremy Lin, Isaiah Canaan, the rights to Chandler Parsons, and the 25th and 42nd picks in the 2014 draft. Asik and Lin are worth virtually nothing and Houston may have to include a draft pick to get some other team to acquire them. This essentially means that the Rockets are trading Parsons, Canaan, and a first round pick to move up to the 7th pick. Houston is most likely getting the better end of this deal in terms of total assets and cap space acquired.

The salary and EWA implications for the Lakers will be discussed later. For now, the focus is on Houston. With the 7th pick, they could most likely draft Marcus Smart, giving the team a tough, defensive-minded guard capable of playing both backcourt positions. The first year salary for the 7th pick is $2,497,800. By adding that salary figure and removing Parsons and Canaan, Houston would have a 2014-15 payroll of $61,582,309 for 9 roster spots, leaving the requisite cap space for minimum cap holds.

The team’s projected top 8 players for 2014-15 and corresponding 2013-14 PER and EWA (according to ESPN) would be as follows:

Player

Pos

PER

EWA

Dwight Howard

C

21.36

12.8

Terrence Jones

PF

19.14

7.9

LeBron James

SF

29.40

27.3

James Harden

SG

23.51

18.0

*Marcus Smart

PG

N/A

N/A

Patrick Beverley

bPG

12.43

1.2

Troy Daniels

bSG

16.01

0.2

Robert Covington

bSF

15.06

0.1

*projected as 7th pick in the 2014 draft

IMPLICATIONS FOR THE LOS ANGELES LAKERS

The Lakers’ roster was horrible last season and it figures to get worse as Pau Gasol and Jordan Hill are unlikely to return. Furthermore, the team needs to add youth, athleticism, and defense on cheap or short-term contracts. Asik and Lin are free agents next year and, by renouncing their rights, the Lakers should have more than enough cap space to offer a max contract next summer even after signing Parsons to an extension. Lin and Parsons will both be 26 years old next season and Asik will be 28, giving the Lakers 3 "young veterans" for the 2014-15 season. Asik is an excellent defensive center, Parsons is a great athlete, and Lin is a capable point guard. While Asik is less valuable than Gasol or Hill, he is probably the best center the Lakers can acquire on a one year deal. Parsons provides a building block that will help the franchise entice free agents in 2015 and beyond.

In terms of payroll obligations, this trade will have to be a handshake deal that is not finalized until the Lakers waive Steve Nash using the stretch provision. By doing this, his salary will count as $3,233,667 for next season, which represents almost a $6.5 million reduction. After making this trade and waiving Nash (but before re-signing Parsons), the Lakers 2014-15 payroll will be $60,219,018 for 7 roster spots. The additional cap room is sufficient for minimum holds and retaining the rights to a single player with a hold that does not exceed $951,000. This means that the Lakers will most likely retain the rights of either Nick Young or Jordan Farmar, both of whom have a cap hold of $915,243.

The Lakers’ projected top 8 players for 2014-15 and corresponding 2013-14 PER and EWA (according to ESPN) would be as follows:

Player

Pos

PER

EWA

Omer Asik

C

14.05

1.7

*Jarnell Stokes

PF

N/A

N/A

Chandler Parsons

SF

15.90

7.5

Kobe Bryant

SG

10.74

0.0

Jeremy Lin

PG

14.31

3.4

Nick Young

bSG

16.11

5.1

Robert Sacre

bC

12.17

0.9

Isaiah Canaan

bPG

9.57

-0.2


*projected as 25th pick in the 2014 draft

The primary shortcoming of this projection is that it does not account for the Lakers’ mid-level exception, which the team could probably use to bring back other players from its 2013-14 squad, such as Farmar (1.8 EWA), Ryan Kelly (0.8 EWA), and Kent Bazemore (0.4 EWA). Any additional money from the exception could be used on a relatively cheap post player, like DeJuan Blair. Key departures Gasol, Hill, and Jodie Meeks combined for 19.5 EWA last season, whereas Parsons, Asik, and Lin combined for 12.6 EWA. It is worth noting that Asik and Lin were worth an additional 5.4 EWA in 2012-13.

KEY CONSIDERATIONS

This deal heavily relies on the Lakers’ willingness to waive Nash and trade down in the draft. As the Kobe Bryant contract indicated, the team is trying to show its loyalty to veteran players, which may keep Los Angeles from getting rid of Nash. Most reports indicate that the team is willing to trade down, but trading down to the 25th pick is a significant move.

It is always difficult to determine what Houston’s front office is going to do, and this summer does not appear to be an exception. For the Rockets to make this move before the draft, the team will have to be very confident in its pitch to LeBron James or, as a backup plan, Carmelo Anthony. The problem here is that the draft takes place before free agency begins. This creates a few scenarios:

1. Houston makes this trade before the draft hoping that it can entice James to sign. The Lakers and Rockets make their draft picks for each other.

2. Houston waits until it knows James will sign with the team. The Lakers and Rockets make this trade and have to accept whoever the other team drafted with the 7th, 25th, and 42nd picks.

3. Houston waits until it knows James will sign with the team. The Lakers and Rockets do not want to trade their respective draft picks and the deal falls apart.

This plan clearly eliminates the Lakers from the James and Anthony sweepstakes. But let’s be honest, they’ve been eliminated ever since Kobe signed his extension. Even the most die-hard Lakers fans need to face reality: James and Anthony are not going to come to the Lakers for approximately $16.5 million each while Kobe Bryant is making $23.5 million next season. His hubris and ridiculous contract have sealed the Lakers’ fate until he retires. Had he proven his commitment to winning and taken a drastic pay cut, like Tim Duncan did with his last contract, the Lakers would be poised to land James and Anthony this summer.

As a handful of teams clamor for one or both of those coveted free agents, the Lakers should take the road less travelled and acquire assets from teams frantically pursuing James and Anthony. Only one or two teams will get James and/or Anthony this summer. While this is intuitively obvious, it seems that quite a few GMs and fans have forgotten this. Or maybe they have simply deluded themselves into believing that they have the best pitch or that they will somehow get lucky and win the sweepstakes. This is a poor plan and the Lakers should avoid its pitfalls. If the Atlanta Hawks want to trade Jeff Teague and/or Paul Millsap in pursuit of James/Anthony, the Lakers (and other teams that either exist in a subpar market or lack the necessary cap room to offer max contracts) should attempt to buy low on Teague and/or Millsap. The goal should be to maximize assets and build roster depth, rather than acquiring 1-3 stars and surrounding them with minimum contracts. If the 2014 NBA Finals imparted a lesson upon the basketball universe, it was that an efficient, deep team could beat a few superstars with a poor supporting cast.

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