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The Beal Deal

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Published: January 10, 2019

(This article is a collaboration between Mason, Shamit, and 42.)

An important part of this season, and retaining Anthony Davis for at least another season, is improving the roster. Bradley Beal arguably has the highest combination of acquirability, skill mix needed by this team, and tradability to other teams in the future.

Here is a look at a few different ways to make a Beal Deal work. Each base deal is organized around a certain constraint, and these deals can be tailored.

No Bad Contracts and a Pick

Let’s say the Wizards are willing to move Beal, but they are trying to secure a deal that does not add any bad contracts to their roster.

  • Pelicans receive: Bradley Beal
  • Wizards receive: Ian Clark, Darius Miller, E’Twaun Moore, Julius Randle, 2019 Pick, 2020 Pick Swap
  • Tailoring: Pick protection, Clark swapped for another minimum contract, send small contracts to Pelicans

This deal adds up to three players the Wizards’ roster, which they can accommodate easily, and the deal can reduce their salary to get under the tax line without stretching salary beyond this season. Getting under the tax line not only eliminates the tax bill, but it gives the Wizards payments from tax payers, so it’s a major swing for owners. Next season, they save over $18m, which is enough to possibly allow them to be a room team. They save almost $29m the following season. In short, their flexibility greatly increases. Plus, they can patiently wait for Howard and Mahinmi’s contracts to enter their final seasons.

In terms of players, they get two solid mid-career players in Randle and Moore, Miller, who is not as good but still on a fair deal, and the journeyman Clark. They have needs for these players, too, since Beal would be gone, Howard is out for an undetermined, and Miller and Clark can fill roles on a team better than the players they have been signing to dance along the roster minimum.

The Pelicans would need to add a players to get to the roster minimum after getting their star player. They would have to rely on Okafor to help fill the hole left by Randle. Beal’s production and defense would, of course, plug that hole, too. Added players or role players on the roster would need to help pad the depth, as well. This roster would be largely secure going into the offseason, with Beal, Davis, Holiday, Hill, Holiday, and Okafor under contract for next season, Bird Rights on Mirotic, and an MLE for Payton. They’ll also have control over Jackson and Williams and still be under the tax. With just a swap on the 2020 pick, that pick could potentially then be attached to an expiring Hill to form the basis for a player that wanted to come to New Orleans.

It should be noted that any trade involving Clark, Johnson, Miller, or Mirotic needs their consent to be executed since they are set to end the season with Early Bird or Full Bird Rights.

Fewest Draft Assets Possible

In this scenario, the Wizards come to you and say “we’ll trade you Beal, but not without also including Mahinmi and his albatross of a contract. Oh, and also, you can’t send us any bad salary in return.” In a nutshell, this means that the Pelicans have to take on at least $40 million in salary without using three of their four highest paid players (AD, Jrue, Hill) to make it happen. Making this type of move work is no easy task – for example, Moore + Randle + Johnson is still less than $24 million, which is still pretty far off from being legal.

You: “That offer was our last hope.” Me, in my best Yoda voice: “No – there is another.”

Now, before you get all excited, there is a considerable cost here, and that is Niko. Is it ideal? No. But if he’s the catalyst that gets you a 25-year-old star locked into a long-term contract, I don’t hesitate. Additionally, the Pels can replace him with another big who can help down the stretch – Markieff Morris – without receiving too much salary.

  • Pelicans receive: Bradley Beal, Ian Mahinmi, Markieff Morris
  • Wizards receive: Wesley Johnson, Nikola Mirotic, E’Twaun Moore, Julius Randle, Darius Miller, 2020 Pick Swap
  • Tailoring: Small contracts, minor assets, pick protection vs pick swap

So, your trade, in total (ignoring any picks), is Beal, Mahinmi, and Morris for Niko, Moore, Randle, Johnson, and Miller. Surely by now, you’re rushing to enter this into the trade machine, and you likely realized that it does not work as a single transaction. In order to make the deal legal, it must be completed as two separate moves: Trade #1 is Mahinmi for Moore and Miller, and Trade #2 is Beal and Morris for Niko, Randle, and Johnson. This trade saves the Wizards about $11.7m, and the Pelicans will have to navigate around the hard cap after it is executed.

(Note: Given Morris’ recently sustained injury, you could also add in a guy like Jeff Green going to the Pels and a different vet minimum contract going back to the Wizards and save them even more money.)

Is the depth still flawed after making these two trades? Yes, without a doubt. But if the Wizards prioritize cleaning up their cap sheet over multiple future picks, this is how it gets done, and the Pelicans can retain draft assets they would have otherwise moved in such a deal.

Bad Contracts and Picks

The ability to eat crap is an asset. Another Beal Deal involves the Pelicans taking the crap contract of Ian Mahinmi. The gist of the deal is:

  • Pelicans receive: Bradley Beal, Ian Mahinmi
  • Wizards receive: Solomon Hill, Wesley Johnson, E’Twaun Moore, Julius Randle, 2019 Unprotected Pick, 2021 Protected Pick
  • Tailoring: Pick protection, small contracts, minor assets

Now, the deal can be tweaked in any number of ways with smaller contracts from either side and other minor assets, but the meat of the deal is the structure above. In a single move, this deal brings the Wizards under the luxury tax threshold and lowers their salary amount by over $5m. So without making any future moves, the Wizards save over $12.5m (tax + salary) by the end of the fiscal year. By the summer, when Randle opts out (most likely), and Wes expires, they save an additional $14.7m. That brings their overall savings to just over $27M in less than 6 months. This is a great way for Washington to reset the repeater tax clock, create space as the Wall extension kicks in, and rid themselves of a terrible contract. They still net 2 picks and a role player in Moore.

The Pelicans land their star and can flip Mahinmi with a few seconds for players on similar contracts. A few candidates include Kent Bazemore, Allen Crabbe, and Tristan Thompson. If they choose to hold onto him, he is a $15.5m expiring the next year who can be used in another salary aggregate to bring in another player.

The ability for the Pelicans to eat a crap contract like Mahinmi is due to how much room they have under the luxury tax threshold. Every edge counts and the Pelicans can utilize one here.

Disabled Player Exception Wrinkle

With the Wizards likely applying for and receiving a Disabled Player Exception, a new wrinkle emerges when dealing with the Pelicans. The Exception, when awarded, will be worth $8,641,000. The Wizards have been shedding salary all season, so they are highly unlikely to sign a free agent into the exception. They can only use the exception on a single player, not use part of it on one player and part on another. They can use the exception to receive a player in trade, but only one in the final year of their deal and with no option years.

If Randle were to decline his option year early he would fit exactly into the Wizards’ Disabled Player Exception. For any deal including Randle, the Wizards could send a minor asset to the deal so that, from their perspective, Randle is traded into the Exception while the rest of the deal is a salary-dropping trade, generating a trade exception that makes up the difference.

Trade exceptions are not used that often, even large ones, but it is nevertheless an asset. Trade exceptions are good for a year and allow a trade or trades totaling up to $100k over their value. They can also help a team stay over the cap, if that’s to their advantage. By structuring the deal in such a way, the Wizards essentially convert the Disabled Player Exception, which is highly restrictive and limited to a season where they have tight books into something that persists for a full year.

For example, if the deal above that was just for Beal was executed in this way, the Wizards would generate a trade exception allowing the Wizards to take back a total of about $14.5m, approaching double the Disabled Player Exception value and lasting twice as long. For instance, the Wizards could potentially get another asset by taking in a player from another team looking to create room in July. Additionally, the Wizards would still be able to sign Randle using Non-Bird Rights for more than the option he would decline to allow this.

This is not a major sweetener, but it’s not nothing, but the Wizards may see it as a small edge in a close call. The Pelicans are not affected by this. The real issue here is Randle declining his option. He’s expected to decline his potion, but in June, not before the trade deadline. His option is essentially insurance against a horrific injury. In order for Randle to decline the option prior to the offseason, he would have to ignore that, be set on a higher salary in the offseason, and have an indication from the Pelicans that he will not return. This would boil down to Randle seeing the Wizards as a possible landing spot at his Non-Bird rate of $10,369,200. Such a conversation would be risky for the Pelicans to even initiate, on top of that.

The deal above receiving just Beal and Mahinmi would generate a Wizards trade exception worth $11,675,803 (allowing them to receive $11,775,803 in trade later) by taking Wesley Johnson into the Disabled Player Exception. This would not require any special negotiations since it’s not Randle being taken into the Disabled Player Exception.

This wrinkle could apply to any team sending an expiring to the Wizards whose value is no more than $8,741,000, so it could work in any team’s favor, not just the Pelicans, and the value of the trade exception would depend on the specifics of the deal.

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