Carmelo Anthony is not long for the New York Knicks, it seems.
The Bulls, Rockets, Mavericks and Heat are circling. Phil Jackson and Derek Fisher couldn’t persuade him to play out the final year of his contract, and though their meeting with Melo went well, I bet Melo’s meeting with other suitors will also go well.
The writing is on the wall.
At minimum, Melo wants to become a free agent, and at that point, he could leave New York in the dust. But to do that, he’d have to leave more than $33 million on the table.
Maybe the Knicks and Melo could help each other avoid those undesirable outcomes by working together to trade the star.
Players can’t be traded after a season when they’ll become free agents or might become free agents due to an option that offseason. So, Melo is currently untradable because he holds an early termination option (the functional equivalent of a player option). But he can become tradable by amending his contract to remove the option, guaranteeing his deal extends through next season.
That essentially gives him power to approve any trade.
Like where the Knicks would send him? Waive the option.
Don’t like where the Knicks would send him? Refuse to waive the option.
A trade could allow Melo to make more money and the Knicks to guarantee themselves compensation, maybe even netting them a 2014 draft pick. If they want to pursue this route, the clock is ticking. Melo must decide on his option by Monday.
What’s in it for Melo?
As soon as Melo terminates his contract, he’s committing to a salary reduction for next season. His max starting salary as a free agent is $875,003 less than his option-year salary.
That’s a relative small amount to relinquish in order to secure a long-term contract – a max of more than $129 million re-signing with the Knicks or $95 million elsewhere.
But the $875,003 matters, because if Melo were to opt in, the value of a max deal he signs next summer would be determined by his salary this season. Comparing deals signed after playing out the option year to max deals signed this summer, he’d make $11.7 million more if he re-signs or $8.7 million more if he leaves – and don’t forget about the $ 23,333,405 he’d make this season.
Of course, there’s no guarantee Melo would command a max contract next offseason.
Melo is coming off the two best seasons of his career. He’ll definitely draw max offers now.
But he’s also 30, and most players begin to decline around this age.
If Melo wants to simply terminate his contract and secure a long-term deal while he knows he can get one, I definitely wouldn’t blame him. That’s the safe route and the one he seems set to travel.
However, if he wants to leave New York, agreeing to a trade would net him an extra $68 million – as long as he still gets a max contract in 2015. It’s a risk, but the reward exists.
The best money is in re-signing with your current team, and it’s not too late for Melo to change his current team.
It might be too late for him to get the “Dwight Howard treatment,” but Melo can still cause a stir this weekend.
Melo has never been a free agent. He signed an extension with the Nuggets and another extension when traded to the Knicks.
I think Melo wants teams woo him, to line up at his door and one-by-one make their pitches. No doubt, it would be a fun experience.
The Knicks have already started the process, and they can grant teams permission to negotiate with Melo as part of a trade. Remember, trade partners must sell Melo, because he’s untradable without his consent.
And why would he give consent to a trade rather than just signing with that new team in a month?
Here’s the most Melo could earn by terminating his contract (orange) or agreeing to a trade and then signing a new contract in 2015 (blue). Both scenarios show re-signing with his current team and leaving his current team.
|Waive ETO for trade, re-sign
|Waive ETO for trade, leave
|Exercise ETO, re-sign
|Exercise ETO, leave
The most Melo could make by leaving the Knicks now is $95,897,375
But if he gets traded to a new team and re-sign there in 2015, a new max contract would be worth $140,875,433 over five years – bringing his six-year total, including this year’s option salary, to $164,208,838.
And if Melo chooses poorly on where he’s traded now and wants to leave his next team in 2015, he could still get four years and $104,615,321 on a max contract – a total of $127,948,726 with this year’s option salary.
Again, deferring a new contract for a year carries major risk. That’s offset by a small bump in guaranteed salary next season and the potential for an even larger payday as a free agent next year than he could get this year. But it is a gamble.
What’s in it for the Knicks?
If the Knicks lose Melo, they’d like something in return.
They’ll obviously have to weigh the odds he walks as a free agent, the possibility of a sign-and-trade and and what they’re offered in a trade before June 23. But that equation is increasingly pointing to trying to trade him now.
The first step would be granting other teams permission to pitch Melo. After all, he must consent to a deal by waiving his early-termination option.
Simultaneously, New York would negotiate with potential trader partners. Unlike a sign-and-trade, which couldn’t happen until July, this type of trade could land the Knicks a first-round pick in next week’s draft. If they’re rebuilding without Melo, it would be extremely helpful to begin that process now rather than wasting a year.
Finding a workable trade will be difficult, because the team trading for Melo gets him for only one year guaranteed. That will limit New York’s return, but something is better than nothing.
Making matters more difficult is the current trade climate.
It’s still technically the 2013-14 season through June 30, so 2013-14 salaries are used in trades. Though several teams can easily create cap space when the clock turns over to 2014-15 in July, few have space now.
Plus, because teams can’t trade players who will become free agents this summer or might become free agents due to an option, a ton of players are off the table. The Heat, with only Norris Cole and Justin Hamilton available to deal, would be completely out of the picture in these discussions.
And nearly everyone with a player option has veto power. The standard deadline for a player option or early-termination option is June 30, so as Melo must agree to a deal, so must nearly any player who holds one of those options.
Want to go to New York? Remove the option now. Don’t want to go to New York? Wait to opt in until after Melo’s early deadline.
Because of these restrictions, trades can be very difficult to cobble together. Here are a few examples of what could work:
- Bulls: Melo for Carlos Boozer, Ronnie Brewer, Lou Amundson, No. 16 and No. 19 picks in 2014 draft
- Rockets: Melo for Jeremy Lin, Omer Asik, No. 25 pick in 2014 draft, 2016 first-round pick
- Mavericks: Melo and Raymond Felton for Jose Calderon, Brandan Wright, Samuel Dalembert, Wayne Ellington, Shane Larkin, Jae Crowder, 2016 first-round pick, 2018 first-round pick
- Warriors: Melo for David Lee, Harrison Barnes, Draymond Green
- Celtics: Melo for Jeff Green, Keith Bogans, Joel Anthony, No. 6 pick in 2014 draft
What’s in it for the trade partner?
Well, you get Melo, one of the NBA’s best scorers.
That’s not without risk, though.
If those above offers seem low, it’s because a team acquiring Melo this way would get him for only one year before he becomes a free agent. That should be a concern, but not as large as it might initially appear.
By agreeing to a trade, Melo would be signaling his interest in re-signing with his new team. Plus, his new team can offer him more money in 2015 free agency than anyone else. It would be relationship set up to succeed.
No team should trade for Melo unless it plans to re-sign him next summer, but if everything goes south quickly, his new team could always flip him before the trade deadline and cut its losses.
Will it happen?
There are a lot moving parts. The Knicks, another team and Melo must all satisfy each other to reach a deal – and there isn’t much time left.
But in all the Melo options being discussed, a trade is overlooked. It’s worth examining.
If, after this process, Melo wanted to stay with the Knicks, he could either terminate his contract and re-sign for $129 million or opt in and then re-sign for up to $164 million. He’s previously ruled out the second option, but that was probably at least partially based on the desire to explore his options. With his options explored in this scenario, maybe he takes his chances on staying in Ne York and earning a larger payday next year.
There’s really no risk in Melo and the Knicks pursuing a trade now. If they don’t find a suitable deal, Melo can opt out Monday as originally planned and hit the ground running in free agency come July 1.
But for the potential of an extra $68 million to Melo and a 2014 draft pick for New York, it’s probably worth the effort to try to find a deal.