Warriors could save $48 million with David Lee-Gerald Wallace trade

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The Warriors agreed to trade David Lee to the Celtics for Gerald Wallace.

The deal is essentially a salary dump for Golden State. Lee lost his starting job and most of his playing time. Wallace, who turns 33 this summer, looks done as a functional NBA player.

Just how much will the Warriors save?

It’s far more than the difference in salaries between Lee ($15,493,680) and Wallace ($10,105,855). That’s because Golden State projects to be far above the progressive luxury tax.

Let’s start with a few reasonable assumptions:

The Warriors could save even more if they stretch Wallace, which would spread his remaining salary evenly over twice the remaining years plus one (three).

On one hand, stretching Wallace makes sense for owners Peter Guber and Joe Lacob financially. Golden State is almost guaranteed to pay the tax next season, but with the salary cap and luxury-tax lines skyrocketing in coming years, it’s unlikely for the following seasons.

On the other hand, stretching Wallace wouldn’t give the Warriors any more immediate roster-building flexibility. Plus, that would close the opportunity to use his salary in a trade. If they stretch him, he’d also eat into their potential cap room in 2016 – when they reportedly plan to pursue Kevin Durant – and 2017.

Here’s Golden State’s outlook before the trade, after the trade and if they use the stretch provision on Wallace:

Pre-trade

  • Salary: $104,896,878
  • Luxury tax: $52,113,291
  • Total: $157,010,169

Post-trade

  • Salary: $99,509,053
  • Luxury tax: $33,654,421
  • Total: $133,163,474

With stretch

  • Salary: $92,771,816
  • Luxury tax: $15,850,678
  • Total: $108,622,494

That’s a saving of about $24 million with the trade. By stretching Wallace, Golden State could increase those savings to about $48 million this season. (Wallace would still make $3,368,618 each of the next two seasons).

The luxury tax is determined on the last day of the regular season, so the Warriors still have a chance to adjust their payroll. But they positioned themselves today to save a lot of money.