The most overlooked – and maybe most significant – reason Carmelo Anthony won’t waive his no-trade clause this season

18 Comments

Carmelo Anthony says he’s committed to the Knicks, says he trusts Phil Jackson, says he believes in Kristaps Porzingis.

And that might all be true.

But so is this: Anthony will get a bonus if he’s traded, and that bonus would be larger if he’s traded in 2016-17 or 2017-18 rather than this season. Anthony also has a no-trade clause, giving him final say in if and when he’s dealt.

Those circumstances – perhaps more than anything else – make it likely the star forward will remain with the Knicks this season.

Anthony’s contract contains a 15% trade kicker, which means if traded, he gets a bonus of 15% of the contract’s remaining value (including the season following his early termination option) from the Knicks. That bonus is allocated across the remaining years of his contract before the early termination option proportionate to the percentage of his salary that’s guarantee. Because Anthony’s deal is fully guaranteed, the trade bonus is allocated equally to each season.

But there’s the major catch: Anthony’s compensation – salary plus trade bonus – in the season of the trade can’t exceed his max salary as defined by years of service or 105% his previous salary, whichever is greater.

That’s why trade bonuses for max players have mattered only minimally. There just isn’t much room under the limit for their compensation to increase.

For example, Anthony has $101,606,280 remaining on his contract – 15% of which would be$15,240,942. But if Anthony is traded this year, his trade bonus would be just $2,118,963. That’s his room below the max –105% his previous salary ($23,581,321) minus his actual salary ($22,875,000) – multiplied by the number of years remaining before his early termination option (three).

And the bonus is only so high because Anthony took a smaller raise this season to give the Knicks extra cap space. If he had gotten his full 7.5% raise, as he does in other seasons, he would have already been above his applicable max. So, his trade bonus would have been $0.

But because the salary cap is skyrocketing in coming seasons due to the new national TV contracts, Anthony will be far below his max salary. That leaves room for the trade bonus to matter.

Next year, Anthony’s max projects to near $30 million while his salary will be shy of $25 million. He could accept a trade bonus of twice the difference (twice because he can allocate it over two years). That still won’t get him his full 15%, but it will come much closer than this season.

Remember, we won’t know 2016-17 max salaries until next July. If the cap comes in higher than expected, Anthony could get a higher portion of his potential trade bonus – up to the full 15% of $11,809,692.

If the cap isn’t quite high enough to get him that full amount, he could amend his contract to remove the early termination option just before the trade. That would allow him to allocate the bonus over three years rather than two, which should get him to the full 15%.

By 2017-18, the cap is projected to rise high enough that Anthony would get his full 15% if traded ($8,125,785). Obviously, though, each season Anthony plays reduces the amount of money left on his contract. In fact, the value shrinks even throughout the regular season.

Anthony has an early termination option before the 2018-19 season, so if he wants to leave the Knicks at that point and can still command so much money, he might as well terminate his contract and become a free agent.

Here is the projected trade bonus for Anthony if he’s traded before each season of his contract:

image

Anthony’s bonus won’t change at any point this season. Even at the trade deadline, 15% of his contract’s remaining value will far surpass his potential bonus.

His bonus could begin to decline during the 2016-17 season, depending exactly where the cap lands and whether Anthony is willing to remove his early termination option. By 2017-18, it will matter when in the season he’s dealt.

Really, this whole conversation exposes the perverse incentive of trade bonuses. Anthony’s salary with the Knicks is set unless they renegotiate it upward (the only direction allowable, and why would they do that?), he accepts a buyout (why would he do that?) or he gets traded.

Simply, the only realistic way for Anthony to get a raise before 2018 is to get traded. And the way for him to maximize that raise to get traded in 2016-17 or 2017-18.

Of course, an NBA paycheck is not Anthony’s only concern. Playing in New York creates marketing opportunities he wouldn’t get elsewhere. He must also consider his family – his wife, La La, and son, Kiyan. Does he want to move to a new city? He also probably cares about his legacy, and many would look unfavorably on him bailing on the Knicks after forcing a trade from the Nuggets. There’s a lot to consider.

It’s also easy to see why Anthony would want to leave. The Knicks are (surprisingly patiently) rebuilding, and Anthony is on the wrong side of 30. His window could easily close before New York’s opens.

Don’t underestimate how good Anthony is now, though. Barring injury or major regression, teams will want to trade for him next summer. Remember how strongly he was courted just a year ago? The market for him will probably only expand.

LeBron James, Kevin Durant, Dwight Howard, Al Horford, Mike Conley, Hassan Whiteside and Timofey Mozgov could all be free agents next summer. Even add potential restricted free agents like Bradley Beal and Andre Drummond. That’s just nine players. More than nine teams will have max cap room. The ones that strike out on that premier group could very well choose to deal for Anthony rather than splurge on lesser free agents.

Trade bonuses create difficulties in matching salaries, but that’s much easier for teams under the cap. The odds of the Knicks finding a viable trade partner are higher with the cap shooting up. They can probably get a nice package of young players and/or draft picks to enhance rebuilding. That’s especially important, because New York must send the Raptors a first-round pick next year.

This is all hypothetical, though – assessments based on what previous players like Anthony and teams like the Knicks have desired. Anthony and/or the Knicks might buck precedent.

Perhaps, Anthony is totally loyal to the Knicks. But, if he’s not, his trade bonus dictates he should give him the benefit of the doubt this season.

He can reevaluate next summer. He’ll be a year older, and if the Knicks aren’t a year better – and even that might not be enough to get on Anthony’s timeline – he can explore a trade then. And if they have improved, he’ll surely be credited for the turnaround.

It pays to wait.

Literally.

As Sunday winds down, Miami heats up talk of Jimmy Butler trade

Getty
Leave a comment

There has been much speculation over the past 48 hours about where disgruntled Minnesota Timberwolves star Jimmy Butler will end up once owner Glen Taylor finds a suitable trade partner for him. We have already discussed at length where Butler might fit best, and Sunday morning saw an influx of new teams ready to come to the Timberwolves with an offer now that it is known that Butler is on the table.

As Sunday came to a close, it became apparent that yet another team is trying to work their way into the Butler sweepstakes.

According to multiple reports, the Miami Heat have been active and are trying to get a deal done for Butler. Once thought of as a middle-of-the-pack suitor, the Heat have apparently been one of the more engaged teams as a deal for the Timberwolves guard is sought before the team opens training camp on Tuesday.

Via Twitter:

Miami joins the Washington Wizards, Portland Trail Blazers, Brooklyn Nets, Detroit Pistons, Milwaukee Bucks, Los Angeles Clippers, Houston Rockets, Philadelphia 76ers, and Cleveland Cavaliers in teams looking to exchange parts for the next season on Butler’s contract.

No doubt league GMs are trying to weigh the risk vs. reward when it comes to Butler. His contract has a player option for the 2019-20 NBA season, which he will almost certainly opt out of in order to become a free agent. That means that without a guarantee that Butler will re-sign, any team trading for him will need to be careful with what young assets they leverage for the present.

For example, one report out of Portland says that the Blazers are unwilling to give up who they see as their young main core for a one-year rental on Butler. Damian Lillard, CJ McCollum, and Jusuf Nurkic are all off the table for the Blazers.

We still don’t know what the asking price for Butler will eventually be, or how the Timberwolves prioritize getting a solid return for him vs. shipping him outside of the Western Conference. For now, we have to wait and see what happens.

At least until Tuesday.

Elton Brand on 76ers contending for a championship: ‘I think we still need a piece’

Leave a comment

Elton Brand last played in the NBA in April of 2016. Now, in September of 2018 he is the general manager of the Philadelphia 76ers.

The 17-year NBA veteran helms one of the best young teams in the NBA, and takes over a GM position that has previously been under turmoil. Brand has perhaps been blessed with the departure of LeBron James from the Eastern Conference, but so too will other teams try to take over that perennial top spot.

The Boston Celtics have similar assets to Philadelphia, with proven stars mixed with an excellent supporting cast and young players who could develop into stars themselves. The Toronto Raptors are a very good team who just added a Finals MVP in Kawhi Leonard. The road ahead will be tough.

But the Sixers still have cap space and they are still looking for a third star to fill a necessary role on their team. Brand said as much during a recent appearance on ESPN, and from all indications it looks like he’s not going to be shy about pulling the trigger either in free agency or in the trade market if he feels he can solidify the Sixers’ position in the east.

Via ESPN:

Everyone talks about free agency, but we may have to pull the trigger on something else before free agency. If we feel we can’t get one of those stars that I can’t name. I still think we need a piece. We’re close. If you ask Joel [Embiid] we have enough and if you ask Ben [Simmons] we have enough, because that’s the chip they have on their shoulder … they don’t want to hear that, but I think we still need a piece.

Brand went on to say that he felt like development was also important in this process, and that it’s possible that Philadelphia has their additional star in Markelle Fultz, Dario Saric, or both.

Philadelphia has reportedly been one of the teams that has jumped into initial conversations with the Minnesota Timberwolves about trading for Jimmy Butler. Whether or not Butler is the right move for the Sixers notwithstanding, that Brand appear is ready to wheel and deal certainly is interesting.

Anthony Davis picks new agent, signs with LeBron James’ rep Rich Paul

Getty
11 Comments

The NBA offseason isn’t over just quite yet, so people are naturally ready to jump at any rumor they can get their hands on. On Sunday, it was announced that New Orleans Pelicans big man Anthony Davis had signed with Rich Paul’s Klutch Sports Group, and the Twittersphere exploded.

Davis, 25, has two seasons left on his current contract until he can use a player option to end his deal early and choose another location if he pleases.

Of course, the rampant speculation here — which is baseless, I might add — is that Davis could be looking to jump ship from the Pelicans, with Paul helping to create pressure for such a deal.

Via Twitter:

There is some speculation that Davis could become trade bait as soon as next summer if the Pelicans fail to meet the expectations foist upon them after their first round sweep of the Portland Trail Blazers during last season’s playoffs. New Orleans no longer has the talents of DeMarcus Cousins, although they played spectacularly without him following his Achilles injury going into the end of the year. The West got tougher, and the Pelicans will also have to play without Rajon Rondo, currently of the Los Angeles Lakers.

The coming season will be Davis’ seventh in Louisiana, and it has long been rumored that he could be a trade prospect or might want to sign in a different market. Signing with Klutch Sports Group puts Davis at the center of speculation that he could join LeBron James on the Lakers, as James is a good friend of Paul and a fellow Klutch client.

Players exchange agents all the time, and just because an agent has a specific track record doesn’t mean that anything is set in stone. The NBA is weird like that. However, It’s not completely unreasonable to raise an eyebrow at Davis joining up with Paul after leaving longtime agent Thad Foucher earlier in September. What Paul does have a rep for is getting his players paid handsomely, which is probably the main thing Davis will be looking for.

New Orleans can offer Davis the vaunted super max contract once he is up for an extension.

New lottery rules change tanking incentives, starting this season

David Dow/NBAE via Getty Images
5 Comments

To paraphrase Jerry Tarkanian, the NBA is so mad at the 76ers, it’ll keep the Hawks losing another couple years.

The NBA finally enacted lottery reform that will take effect this season. The measures appeared designed to curb Sam Hinkie’s ambitious multi-year tank, but Philadelphia has already reaped the rewards of The Process. The 76ers, led by former high draft picks Joel Embiid and Ben Simmons, are one of the league’s top teams and extremely unlikely to land in the lottery. It’s the next generation of losing teams, like Atlanta, that will feel the brunt of these changes.

Generally, the new rules reduce incentives to chase the league’s worst record. The very-bottom teams face greater variance and worse expected outcomes than previously. The top six seeds in the lottery became less valuable than before, the 7-14 seeds more valuable than before.

In the previous system, the three worst teams had 250, 199 and 156 of 1,000 lottery combinations. The top-three picks were drawn then the next 11 picks were slotted in reverse order of record.

Now, the three worst teams each have 140 of 1,000 lottery combinations. The top-four picks are drawn then the next 10 picks are slotted in reverse order of record.

There’s several ways to measure the changes, but here a a few based on lottery seed in the old system (orange) and new system (blue):

Odds of No. 1 pick:

image

Odds of top-four pick:

image

Expected pick:

image

The “big” change is the bottom three teams all have the same odds of getting drawn, creating an illusion there’s no difference between finishing last or third-to-last. But the last-place team still gets slotted ahead of the second-worst and third-worst (and second-worst ahead of third-worst) if none get drawn in the lottery.

Simply, teams are still incentivized to chase the league’s very worst record. The incentives aren’t as strong as they once were, but they still exist.

And the upside remains just as high. Top draft picks are so valuable – a chance to add elite young talent on a relatively cheap contract that comes with five years of team control that, practically, extends much longer.

So, how will teams handle this changing structure?

Decisions will be fascinating among more than just the lowest of cellar-dwellers. Several teams have traded first-round picks this season that contain protections within the lottery. The Mavericks owe the Hawks a top-five protected first-rounder. The Cavaliers owe the Hawks a top-10-protected first-rounder. The Grizzlies owe the Celtics a top-eight-protected first-rounder. The Nuggets owe the Nets a top-12-protected first-rounder. Those owing teams all face a new batch of decisions of when to give up on trying to make the playoffs and aim to keep that pick.

I mostly share the view that lottery reform won’t change much, particularly on a year-to-year basis. But the cumulative effect could be larger on some teams.

Hinkie’s 76ers were an anomaly. Few teams set out to tank for that long. Many more tanked for a season, knowing that would result in a high draft pick. With a new touted prospect in hand, those teams usually attempted to ascend.

But now, far less is guaranteed. Before, the second-worst team was likely to land a top-three pick and was guaranteed a top-five pick. Now, the second-worst team is likely to pick between No. 4 and No. 6. In that lower range, the team might get stuck with a lesser prospect who leaves it stuck losing again the following year.

At minimum, lottery reform adds uncertainty to a league that had grown familiar with the previous system and how teams proceeded within it. We can all guess how teams will act in the new system, but this season will provide much more tangible clarity.