Understanding the NBA Trade Market: The Bigger Picture

Published: January 22, 2014

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


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