Understanding the NBA Trade Market: The Bigger Picture

A few of the writers here at Bourbon Street Shots are going to be putting together a series on the NBA Trade Market leading up to the trade deadline. Our goal is to publish around a couple of pieces a week on various topics relating to trades. This article will serve as the introductory article. At the end of this piece, we have a list of possible topics to be included in this series. If you see a topic you are really interested in (or don’t), please let us know in the comments so we can narrow down the list. Enjoy!

NBA trades don’t happen in a vacuum. Every trade has a context. Every decision has an underlying logic, and most importantly, every move is just a part of a much bigger plan for the NBA General Managers and teams involved. Nevertheless, when we discuss trades, we tend to remove trades from these contexts as a shortcut to clear answers. Once you add these additional facts and circumstances to whatever trade you’re hoping to understand, things get messy, but it is the only way to really understand what’s going on. Without it, any analysis of a trade is simply cursory.

To explain my point, I will use a case study from our own team’s history, and why not use the biggest trade in recent memory, the Chris Paul trade. Right after the trade to the Clippers, I think a lot of people were ho-hum. It seemed like it wasn’t a great deal for a player like CP3, but it looked like it would better than the Lakers deal in the long run. As time passed, those same people forgot about the Lakers’ offer and Gordon struggled with injuries, now all of the sudden the CP3 trade was an awful one. Let’s jump back in time and try to see if we really find an uneven trade.

The Chris Paul Trade

First of all, why did we want to trade Chris Paul? It’s pretty simple. Paul said he wasn’t coming back after his contract was up, and he wanted to give us a fair shot to trade him to a bigger market with a team that was ready to win. The Hornets’ options were simple keep Paul, struggle to make the playoffs, and receive nothing when he leaves, or we could trade Paul, get something in return, and build for the future. Clearly, we wanted to trade him.

Let’s skip all the Lakers trade stuff and look at what deal actually happened.

Clippers ReceivedChris Paul

Two Future 2nd Round Draft Picks

Est. Cap hit that year: $16,359,805

Hornets Received Eric Gordon

Chris Kaman

Al-Farouq Aminu

First Round Draft Pick (From Minnesota)

Est. Cap hit that year: $20,616,744

Now, ignore what has happened since this trade and take yourself back to December 2011, and don’t think of players as part of our future as a team. Instead, think of them as assets that can be used to acquire more talented based on what the team needs.

Having said that, we effectively traded the best point guard in the league (who didn’t want to be here anymore) for the following assets:

  • Eric Gordon: A young player on a rookie deal with the potential to be a star.
  • Chris Kaman: An expiring contract worth just over 14 million.
  • Al-Farouq Aminu: A young wild card with a high ceiling and low floor.
  • Draft Pick: A first round pick that is almost certainly in the lottery.

Our goal was to rebuild completely with young talent, cap room, and assets in the draft. Clearly, we acquired the type of assets that accomplish that goal. However, if we take our goals and the value of the assets at the time of the trade out of our analysis, then this trade can look a bit lopsided. Kaman is no longer on our team. Aminu has not established himself as a consistent player, and we all know about Rivers and Gordon. What’s my point? Things like a team’s long term and short term goals, salary cap constraints, and roster constrains are essential factors that need to be considered when analyzing a trade. Don’t try and force things into a vacuum and ask, “Who won?”

Now, let’s take this back in a different direction. Since not all of these assets are still here, what did we end up getting for them? That is the important thing in the long run right? That draft pick became Austin Rivers. Kaman left in free agency, and we used his cap space to get Robin Lopez and Ryan Anderson.  Of course, Lopez and Vasquez (who acquired in trade for Pondexter) were used to acquire Tyreke Evans and Jeff Withey in a sign-and-trade. We also used some of the cap space from trading Jarrett Jack to the Warriors. So a few years after the CP3 trade, Chris Kaman turns in to Tyreke Evans, Ryan Anderson, and Jeff Withey . . . with assists from Jarrett Jack and Gustavo Ayon.

Does this deal feel lopsided given our recent goals of acquiring young veterans and leaving some flexibility for the future? I don’t think so. We also don’t know what will happen in the future with those remaining assets. Maybe, one of these guys gets traded for a piece than can contribute to a championship run, then who cares if the CP3 trade was lopsided from one perspective?

It’s all Part of the Plan

When we talk about trades or even trade rumors, we want the simple truths and answers. The problem is that trades are not simple. There are always many layers and much activity around trades. The point I want to leave you with is that a team’s plan for the short and long-term matter. Next time you comment on a trade, first consider what each team really wanted to gain from the move. In other words, what was the plan? Think about how the team changes in the long term and the short term. Think about what a team might have really wanted to accomplish by taking on a ton of salary or by trading a superstar.

Using this article as an introduction, we are going to explore the NBA trade market more in depth leading up to the trade deadline, and as promised, here is a list of a few of the topics we are considering. Please, let us know what interests you in the comments.

Understanding the NBA Trade Market Series

  • Why there are often no winners and losers in the trade market
  • If there are no winners and losers, why are there bad trades?
  • The layers of asset values in the NBA trade market
  • Opportunity Cost: What it actually means and how it matters
  • When does cap space mean nothing? How about something?
  • Dealer Dell: Is there a method to his madness?
  • What is the value of roster flexibility?
  • The problem with skill redundancies
  • Value beyond the court and salary cap

17 responses to “Understanding the NBA Trade Market: The Bigger Picture”

  1. Neat series and a great idea. Here are the topics I find most interesting:
    What is the value of roster flexibility?
    The problem with skill redundancies
    Value beyond the court and the cap
    The layers of asset values in the NBA trade market
    Dealer Dell: Is there a method to his madness?
    I also think it would be cool to find a place for blogging buddies of different teams to give their takes on trades- real or imagined, Pelicans involvement or not. Give us perspective outside the Pelican bubble

  2. good stuff. how about also at some point getting into some specific trade proposals or at least starting points — if you were dell demps, what moves would you be looking to make and how could they work?

  3. Don’t forget the trade also increase the value of our own draft pick that year, which turned into AD.  We don’t have AD if we kept CP3 for the final year contract or did the lakers deal.

  4. anyone here the rumors about joakim noah and kirk hinrich being on the trading block?
    we get the perfect compliment to Davis and some shooting to replace gordon. they get a scoring mate for D-Rose in the backcourt and a energy/hustle guy to replace some of the things Noah did for them. this would also allow them to tank and get a lottery pick as well

  5. dxxpxxDetroit could possibly put Monroe on the block, but we will have to get them something to convince Dumars to pull the trigger. EG for Monroe would not be enough straight up; we would have to take either Stuckey’s or Villanueva’s contract as well.

    Bobcats could be a last resort if they really want to do EG for BG straight up. Ben Gordon is on an expiring deal and I would believe the Bobcats will like to add some more fire power if they want to make a push for the playoffs. Same thing as Detroit.

    Chicago could be a possible destination, but I would believe they want to get rid of Boozer or  Noah because of the play of Taj Gibson.

    If the Knicks keep on slipping down before the deadline, Denver will be a heavy player in the trade block since they have the Knicks ’14 1st Rounder via the Carmelo deal. Anyway, hope Dell has a big stick and pulls off some crazy acquisitions come the deadline.

  6. if it were to go down, I’d rather them take steamer too. I just thought it seemed a little more realistic with Jason smith cause they’d get more production from him

  7. I really like the Noah trade, but I am at that point where I feel like if we make a trade for EG for Ben Grodon, where we have an expiring contract that would give us more cap room for the future, we would find it a lot more beneficial. I know Benson wants success now, but really good teams are not made over night. If you look at our team compared to OKC/SEA in the construction, they are very similar. In their first year in the lottery they got their franchise player in KD, and as did we in AD. That year they were terrible but saw growth in their emerging star, much like we did. The following year they went back to the lottery and got their next piece in Westbrook, much like we did in acquiring Jrue with our draft pick. That year they still were not very good, but had a ton of potential… much like we are this year. Despite huge improvements by their star KD they still made basically no run for the playoffs, very much like what we are seeing this year with AD and the Pels. After that season they  ended up in the lottery again, and got their final piece in James Harden…. and the rest is history. They went from a 23 win season, to a 50 win season, and became one of the NBA’s youngest and most talented teams. I believe the Pels are right where OKC was in their second year with KD; they have a ton of potential but are still missing that one guy that makes the equation work. As much as I despise the tank, being able to get our top 5 draft pick back would be exactly what we are missing. Imagine this team with the addition of a Parker, Wiggins, Embid, or Randle, it would be a FORCE of the next generation. I believe that if small market teams become great through the draft, this season of losing is somewhat of necessary evil that we have to put up with. I hope to see the Pels make a trade for Gordon that helps us for the future, not just for the next two or three years. If becoming a Champion is our ultimate goal, one more season of struggle might just have to happen. If your one of those people who believe great teams are not made with losing games, your wrong, OKC did it and it turned out to be not to bad of an investment. 

    I know its long, but I think its worth reading.

  8. If we are posting fake trades,
    Boston gets cap space. Aminu has to consent or can be removed and replaced with Morrow.( http://espn.go.com/nba/tradeMachine?tradeId=l2o82e5 ) If you add both we can take Bogans, Bad contract, hey its better than Gordon or Posey’s IMO.(http://espn.go.com/nba/tradeMachine?tradeId=ka7rdxv)
    Charlotte gets a player to help push for the playoffs, who can score consistently with Kemba Walker hurt. And Roberts also to fill some not all of the PG minutes. I think Jordon likes gunners like Roberts incentivize the trade. (Roberts can also be removed or moved to Milwakee, or Boston with no effect on the trade)
    Milwalkee gets rid of locker room trouble(Gary Neal and Larry Sanders)  ( http://probasketballtalk.nbcsports.com/2014/01/05/bucks-larry-sanders-gary-neal-argue-in-locker-room-following-loss-to-suns/ ) and receives a competent guard (Tyreke, I still believe he is a point guard and doesn’t fit here).
    US (New Orleans) we get cap space Ben Gordon, Jeff Green a 2-4 can score and defend(we need defenders) shooters Neal (can provide spark off the bench; also a former spur), ben Gordon can kinda shoot and Delfino. Rivers, Taylor and Neal handle PG minutes until Jrue returns. Withey gets more minutes with Steamer gone.
    Also helps no team in the west, but there are problems Boston wants to send additional contracts if they trade Green. We would have no Backcourt depth during pending trade or any depth trading half our roster (10 day contracts or happen over All Star Weekend?) Limited frontcourt help with addition of Green; would still need a 4/5. Doesn’t help a tank for the rest of the season I still don’t want too. And Jeff Green may give us some posters, 2k says so. Really high on Green since last season, Rich Mans Aminu meaning he can dribble and shoot.
    Opinions? To much for us or a particular team ? 
    *note all variations of the same trade

  9. dxxpxxWhile I love what Jason brings to this team, this trade would excite everyone around here.  Is this a legitimate possibility or just wishful thinking, as I haven’t heard any of those rumors you suggest.

  10. well noah and kirk are rumored to be on the trading block. I was trying out a trade I think could workout for both sides but mainly for the pelz of course. it’s more on the wishful thinking side

  11. have always considered that to be part of the trade.  had we kept CP3 we probably land the 6-8 seed, maybe win 2 playoff games, then lose CP3 with no compensation, and wind up picking 18th.  You don’t want to get in the habit of building up and breaking down (Baron Davis and company, then CP3 and company), but you need to know when to pull the plug, either because the star is fool’s gold (Baron Davis), or the star is leaving and you just couldn’t get the right pieces around him (CP3, hopefully no one else anytime soon…hmmm hmmmmm).

  12. xman20002000 jdtufts10 Id make the argument that we are a better team than that OKC team the year before they got Harden. We are literally one young gun away, from being the real deal, given our health holds.

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