One Way to Get Quality in a Trade for Eric Gordon

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Published: February 16, 2013
GordonProud

Nothing has occupied those who follow the New Orleans Hornets as much as the Eric Gordon saga, especially once the ownership situation was settled and the rebrand was defined. It’s taken so many public and unexpected turns, Gordon proponents, opponents, exponents, and nonponents all follow this story.

Recently, Rohan from At the Hive gave reasons why trading Gordon sooner rather than later may be unwise, essentially saying that the risk is worth the reward at least until the 2015 offseason.

Michael McNamara here at Hornets247 took the opposite stance, saying that it’s better to just cut ties sooner rather than later.

Part of any decision to trade Gordon will be the value one can get in return. Rohan claims his value is at an all-time low at the moment, and uses that as a reason to wait before considering any trades for the shooting guard. Michael acknowledges that his value might be low, but sees the value that can be had now as superior to the potential iceberg of missed games, of which we may have only seen the tip.

The heart of the matter is the old pair of idea that plagues fan bases and drives GM’s salaries through the roof: If this guy has value to other people, then he may have value to me; if this guy has no value to me, then he may not have value to the other guy.

So, how to `win’ this game? Looking for people who want to trade a good player with a high to very high salary for one with a very high salary that has played in 27 of 119 games (22.7%) is about as pointless as looking for people who want to accept high salary players who have a guaranteed low output. This is where sweeteners etc. normally enter into the equation, but there’s no sweetener being added to a deal to send Eric Gordon out at this point given all the cap space the Hornets have coming to them and his potential, as noted by Rohan.

So how to work this?

Well, other things can change someone’s view of a trade. In particular, new tax rules come into effect this offseason. So, it’s possible that a team looking to avoid the increased tax rates might be willing to accept some risk to reduce tax payments.

There may be other forces that can provide incentives other than sweeteners to view Gordon and his contract more favorably than the Hornets do, which opens the door for a trade for quality.

So, let’s look around for a team that is paying the tax, has made moves to lower tax payments, and has incentive to make changes to their roster.

Oh, the Lakers.

There may be others that fit this criteria, and there may be other criteria. I’m using this one and walking through it so the process can be critiqued, and possibly improved, by readers. We’ll get the good trades, Dell will read them, and the Pelicans will win a title.

Easy, right?

Cool.

Let’s rock.

Lakers

The Lakers have around $100m in payroll, leading to a tax bill of about $30m, as the current tax rate is $1 for every $1 over the tax line, which is around $70m this season. They dumped current Clipper Lamar Odom ($8.9m, $8.2m) to Dallas, along with a second round pick, for a protected first round pick just before the last season. This moves saved nearly $18m in payroll and tax that season. Odom had value, but they chose the pick rather than pursuing potential players. Also, Odom was reported disgruntled and might have had a less of a role worth his cost to Coach Brown than he had to Coach Jackson.

Given their record and star power, the Lakers clearly fit the bill as team. They may be looking to shed some salary in the right way. Additionally, they have over $70m committed to just 6 players next offseason ignoring all not-currently guaranteed salary, Metta’s player option included, but it’s closer to $80m when that option is included along with Meeks’ team option for $1.5m.

This does not include (potentially) re-signing Dwight Howard.

Looking farther ahead, the Lakers have $9,701,000 committed the following season. Yup. Just Nash is on the books. The Lakers will likely have to chew up some of the enormous amount of cap space that corresponds to, and they may want to stay close enough to the cap to they can use the Bird exception to sign Kobe, for instance. Regardless, while likely not interested in piling up a ton of bills going into the 2014 offseason, they may be fine with piling up some.

Enter, or exit, Pau Gasol. Another disgruntled player who does not fit with the new coach’s system very well, as evidenced by D’Antoni’s relegation of Gasol to the bench. Gasol has been mentioned in trade rumors for a couple of years now, and the team has told Howard that he will not be traded. Such claims do not always turn out to be true, but it stands to reason the team may would be happier moving Gasol than Howard.

So, Gasol and his soon-to-be-expiring ($19m, $19.3m) contract are going out according to our assumption. They’ll want a forward that fits their system a little better, so a stretch-four, and a reduction in salary to be happy. Long-term deals will likely be refused.

Well, that’s almost as far from Eric Gordon as you can get . . . no, I didn’t forget this is an Eric Gordon trade article.

Also, with $30m invested in Kobe Bryant at shooting guard, the Lakers have no need for Eric Gordon.

So, we need another team.

Toronto

Toronto has a stretch-4 they have been trying to move for a while, but have been reluctant to do a deal with Chicago consisting of Carlos Boozer and Nate Robinson for Andrea Bargnani and John Lucas III.

While it’s hard to know why they’d be reluctant to move Bargnani (if that is why), they may be ok moving Bargnani if they can get under the tax line next season, and the Boozer trade would put them over that line further than they are.

Also, the addition of Rudy Gay and departure of Calderon has changed the balance of the team.

We take note, and follow this thread for a little longer.

Chicago

As noted, they are looking to move Boozer and get Bargnani. Well, we want to send Bargnani to Los Angeles, so something has to change.

Letting Gasol land in Chicago gives them a forward to replace Boozer. He’s not as strong of a rebounder as Boozer, but has some advantages.

Also, Chicago is a team that could use a shooting guard this season, as they lack Rose’s scoring from the point, and beyond. A Rose-Gordon backcourt could be deadly on both ends of the floor for years to come, so this is the incentive for Chicago to play here, plus they get Gasol over Boozer.

The upgrade on the wing with Gordon will be paired with a downgrade on the wing by sending Luol Deng to the Hornets. Deng is a great defender and a quality player who was invited to play in the 2012 and 2013 All-Star Game, has led the NBA in minutes per game twice, led the NBA in minutes played per game last season and is leading again this season, and has not missed more than 20% of a given season in 5 years (he played 82 games twice in his career). His attitude and age would fit with the team’s basketball and fiscal philosophy. He’ll turn 28 as this ends and going into the last year of his deal. His salary is slightly less than Gordon’s this season and next, but Deng expires after the 2013-2014 season.

The Bulls had a shot in 2011 to get past the Heat, but they could not. Adding some additional scoring in the form of Gordon and an enhanced presence in the paint to replace the forward they have are perpetually open to moving may be what they need to match up with the Heat. Also, another scorer on the wing and a much taller target in the paint may help ease Rose’s transition back into active duty. Gordon is not a sure thing, but no championship team is full of sure things. A core of Noah, Gasol, Gordon, and Rose is to be feared when healthy. They can’t all be injured at the same time, can they?

Moving Boozer for a blue chipper isn’t really possible without sweetening the deal, so that leaves Deng as the loosest piece that can bring back value by way of his talent and expiring, fair deal. Boozer-Deng for Gordon-Gasol gives them an upgrade they may not be able to duplicate, though it comes with some risk. I think it’s acceptable risk given that they are stronger title contenders after the trade.

Additionally, given the Bulls’ tradition, outlook, and proximity to his home, Gordon would have many reasons not to veto this trade, which is key.

Lastly, the Bulls work and patience with Rose’s potential delayed return to action bodes well for their patience with him. In fact, Gordon’s independent doctor that gave the 4-6 week timetable for his return this season was in Chicago.

Making It All Work

So that’s the skeleton of the deal. It still needs to work in terms of the CBA and in terms of basketball. Some of the financial comments depend upon unofficial published salary information and projections of the salary cap, tax line, max deal values, etc.

From the Lakers perspective, they’re happy. The swap a forward they don’t want at a large salary for one with a far lower salary. Still, they can take on a little more salary and still save some money, and something has to change to make this deal work within the CBA’s parameters. The Lakers have the declining Metta World Peace and the declined Devin Ebanks at small forward. That’s it. Adding Landry Fields reunites him with D’Antoni, the coach he played very well under in New York. Fields has also been made a little redundant in Toronto with the addition of Rudy Gay.

This move nets the team a payroll savings $2.75m this season (prorated, so closer to $1m), with another $2.75m in non-prorated tax payments. Next season, the next tax rules come into effect, and the tax rate the Lakers will pay on their last bit of salary will depend on the amount their salary exceeds the tax line, and it depends in the positive way. In other words, it’s a graduated progressive tax . . . the more you exceed the line, the higher rate goes, and it increases in discrete jumps. Depending on the total Laker payroll aside from Gasol or these two players, the team could will be saving at least $5.7m in tax payments and about $2.3m in salary, for a total of at least $8m. This $13.75m over the two years is about 75% of the additional $17.75m payroll the team is committing to in 2014-2015, and they have time to move those two in smaller deals. If they payroll is higher, the savings could be dramatically higher as well, perhaps even enough to pay for the extra year for Bargnani and Fields with some leftover.

Really.

That’s how significant the new tax rules are, even without the repeater rule that comes into play the following season.

At any rate, the seeming small savings is actually a huge one for the Lakers, and they can get a wing that should fit and make Metta World Peace expendable while getting a forward that may fit better than their current one.

The Raptors get a forward they are interested in while saving a prorated $1.25m this season and $1.7m next. This amount will drop their committed salary closer tax line, which is considerably more favorable than the current Boozer deal which increases their salary. Remember, teams that do not pay tax receive a share of the tax paid, so avoiding paying even a small amount of tax can cost an owner $1m or more.

They will also save about $1m in the final year of Boozer’s deal.

Also, Toronto is 6 games out of the playoffs, in the 10th spot, with 29 games left to play. If they can make a move forward while someone else makes a move back, they can make the playoffs. That combined with a new core set of featured players that came in at the expense of holders from a prior push, it may buy Colangelo some time. So, the GM has some motivation to give the team some curb appeal.

This leaves just Chicago and New Orleans to get sorted. Luckily, this is quite easy. New Orleans is getting Chicago’s small forward, so New Orleans sends them Al-Farouq Aminu. Likewise, Chicago should send a shooting guard to New Orleans. Since Chicago used the non-taxpayer MLE, they can not end the season over the tax line. A simple way to account for this is to actually send Roger Mason to Chicago along with Gordon, getting Rip Hamilton and Kirk Hinrich in return.

This deals saves Chicago less than a prorated $0.5m this season, but saves them either $1m or $5m next season, depending on if they were going to waive Hamilton or not (he is only guaranteed $1m next season is waived at the end of this season). This deal along is not enough to keep them from being a tax-payer this season, but it will give them a measure of help on that front next season when the penalties are much higher.

As far as the Hornets go, they will spend an extra prorated $4.5m this season, leaving them below the tax line, and will eat up about $5m from this offseason’s cap space assuming the team waives Rip, paying only the $1m that he is guaranteed next season. This cap hit will not prevent the then Pelicans from offering a max deal to a free agent with less than 7 years of experience. It will affect their ability to offer max deal to free agents with at least 7 years of NBA experience. On the other hand, having a good deal of space to work with a large expiring contract of a solid player may increase the chances of landing a highly talented, highly salaried player in trade. Another road is to use the small committed salary and other assets to tinker with the roster, then use the Bird exception to sign Deng to a fair deal after he’s had a year in the system.

On the basketball side, they get a defensive-minded combo guard to pair with their other new defensive wing. Both players would be on contracts expiring after 2013-2014.

Summary

Lakers

Lose: Pau Gasol
Gain: Andrea Bargnani, Landry Fields
Financial: Potential 8-figure tax savings

Raptors

Lose: Andrea Bargnani, Landry Fields
Gain: Carlos Boozer
Financial: Short-term savings, may avoid tax

Bulls

Lose: Carlos Boozer, Luol Deng, Rip Hamilton, Kirk Hinrich
Gain: Pau Gasol, Eric Gordon, Roger Mason, Al-Farouq Aminu
Financial: Short-term savings, may avoid tax

Hornets

Lose: Eric Gordon, Roger Mason, Al-Farouq Aminu
Gain: Luol Deng, Rip Hamilton, Kirk Hinrich
Financial: $5m in 2013-2014 Season, could eliminate highest value players as free agent targets

The deal works in the Trade Machine, and the analysis shows that each team remains pretty stable in terms of predicted wins this season. However, fit and performance in the future (e.g. as Gordon potentially returns to form or better), and salary concerns may tip the scales. To me, that result clearly shows that no team is clearly winning or losing . . . a good sign.

This is not the only such deal that will work. For instance, the deal work with Vasquez in place of Mason, or with Vasquez added in the Chicago package and with Nate Robinson in the New Orleans package. None of this even gets into picks or cash changing hands.

The bulk of the post is just putting down the logic of constructing this trade from the starting point of financial pressure. My hope is that the inspiration other have to seek other such trades ends up with a value exceeding the boredom that’s been inflicted upon the world.

((Thanks to Michael McNamara for discussing this trade with me and giving the last tweak to make it work.))

8 comments
504ever
504ever

I applaud this trade idea, which is more realistic in terms of material than any other I have seen. Without trying to put myself in the shoes of each team's GM, I can say a four team trade involving Eric Gordon level salaries is a very tricky thing to pull off. Unfortunately, I think the odds are very much against this before we start to play GM and find other problems. I still say this is much more realistic (in terms of material) than any other Eric Gordon trade I have seen. Maybe it will spark more realistic trade ideas.

Jason Calmes
Jason Calmes

The bigger the trade, the harder it is to put it together. Dell's been a part of such a deal before (Ariza), but this one is higher stakes. The point was to tied Gordon leaving to quality arriving. Sparking other ideas is EXACTLY the point. You've been around enough to know this isn't my thing, so I'm not expecting this to be the `best' trade. Just showing that the set is nonempty. It's for someone else to find the extreme value in the finite set.

Chuck
Chuck

I agree the Lakers probably need a sweetener, maybe our first round pick top 10 protected or something. I also am not sure Chicago would be willing to take on Gordon, given that Rose's health is already an issue and Thibs likes to play his guys 40 minutes a night. Can you imagine Gordon making it through even a week under Thibs? I can't... Aside from that though, I really like this trade because it gives us 3 hardworking, quality veterans who all play hard and well on defense (Monty-type guys) to mentor our young guys. Could you name some guys who the Hornets could hypothetically offer a max contract to, after this trade? I assume you're thinking someone like Jennings or Pekovic.

Jason Calmes
Jason Calmes

Thanks. I think there are things to be discussed tweaked with this. What I'd love is for readers to come up with trades in a similar vein to see what else we can get for this guy. All good comments. I tend to think the Lakers thing is works since it saves money and they have two pieces to move in separate deals if need be, rather than the 1, or just move it in one big chunk . . . so more options. I see Chicago as the weakest link. Just goes to show, it's near that balance point. In terms of targets, Dell has typically offered multi-year deals to young players, not older ones. Last summer, the players that got multi-year deals were RFA's. He's done this for young players on our team, too (Smith). So, I see Jennings as the top prospect and the only player that could get a max that I would see coming here. This is not my bailiwick, however. Your thoughts?

Mason Ginsberg
Mason Ginsberg

Here's the trade in the ESPN.com Trade Machine: http://espn.go.com/nba/tradeMachine/?tradeId=cu42vdv I can see every part of this deal playing out except for Los Angeles. I totally get the HUGE financial savings, but I still don't think you can get away with simply swapping Gasol for Bargs and Fields, two guys on pretty terrible contracts (especially the latter). The Lakers could probably cut costs in a deal that would net them a better return elsewhere. Otherwise, it all looks good. Sweeten the deal for Los Angeles, and you may have something here. Good work.

Jason Calmes
Jason Calmes

Thanks. Your take is 100% valid. In the other column are the savings (which you noted), and the fit of Bargnani and Feilds with D'Antoni, with the ability to trades the less bad deal (shorter) of MWP. Also, the seem to think Gasol is one guy on a terribler contract who is all mad. None of this includes cash or picks, so all of that is in there, and potentially other player tweaks. So, yeah, the fixes you suggest are all on the table. Good feedback. Thank link does not work for me.

Michael McNamara
Michael McNamara

Agree. It depends on how much of a say D'Anotoni has inside the organization because he would choose Bargnani and Fields over Gasol in a heartbeat. He'd be an idiot to do so, but hey, that's his "system"

Jason Calmes
Jason Calmes

I agree on those points, Mike. I'm not sure they can pay for Brown and D'Antoni and a third coach while trimming all these bills, so he should de facto be the man. We shall see. With the other potential turmoil over there, who can tell?