3 Lessons from the Trade Deadline: (#2) Unwanted Contract Market Heating Up

Looking at the deadline deals more closely, all the big trades were inspired by a desire to shed an unwanted player contract. The Clippers dealt Blake Griffin because they thought they could spend his $35M a year more effectively. The Lakers moved Jordan Clarkson for the same reason, potentially opening up a second max contract slot this summer. The Kings didn’t want to pay George Hill another $20M to provide veteran leadership on a losing team. Rodney Hood and Elfrid Payton were traded based on a desire to avoid paying their next contract. And then there’s the Niko-Asik swap, which was a salary dump in disguise to help both franchises save face.

Someday someone should write a book on the Pelicans’ ill-fated relationship with Omer Asik, or, at minimum, a chapter in a book on decision-making biases and sunk costs. Over the first 3 years of his career, Asik established himself as an elite interior defender. But Asik’s fourth season was plagued by knee and calf injuries as well as discontent following the Rockets’ acquisition of Dwight Howard. With Asik’s salary set to balloon to $15M in the final year of his contract, the Rockets sought a trade and found an eager trade partner in New Orleans, a team with the league’s #27 defense despite the presence of Anthony Davis. The Pelicans not only took on Asik’s salary but also gave up their next first rounder to get the deal done.

I don’t think it’s controversial to say that the results of pairing Asik with Anthony Davis were less than stellar. The Pelicans still had a bottom-10 defense, lineups with Davis and not-Asik were slightly better than lineups including the Asik-Davis pair, and in the playoffs against the Warriors, Asik was approximately useless. Pace and space were not his friend. Asik failed to block a shot, made just 20% of his field goal attempts, and played a shade under 20 minutes a game as the starting center all series long. Rather than moving on from the seemingly unsuccessful Asik-Davis experiment, the Pelicans doubled down on their initial investment with a 5-year, $60M deal, including over $50M guaranteed. Predictably, that contract has not turned out well.

The league’s ever-increasing reliance on 3s exacerbated Asik’s struggles, his injuries mounted, and Asik has been an ineffective part-time player for the entirety of his current deal. He’s owed about $18M from last week’s trade deadline through the 2019-20 season, including $11.3M next year. With DeMarcus Cousins set to be a free agent and the Pelicans already owing max or near-max money to both AD and Jrue Holiday, that’s a lot of dead money to have on the books. In order to stay under the tax and keep a fairly competitive roster, the Pelicans needed to move Asik.

Meanwhile, the Bulls decided before the season even began that Nikola Mirotic was not in their long-term plans. This was evident from the way they prioritized a 4-year deal for Cristiano Felicio over re-signing Niko, and especially from the organization’s lack of support when he suffered a concussion and facial fractures from a Bobby Portis punch. The desire to trade Niko was apparent, yet his much-improved performance created a bit of a PR problem if fans viewed the trade as a giveaway. With Niko being both relatively young and the best player on the team by any metric, the Bulls publicly resolved to get a first rounder for Niko. Given the market for role players described in Part 1 of this series, this proved impossible. The Jazz clearly wanted Niko but would give up no more than an expiring contract and a second rounder.

The trade of Niko for Asik’s unwanted contract and a first round pick accomplished both teams’ PR objectives. The Bulls could claim they got a first rounder for Niko, and the Pelicans could say this trade was done to improve the team rather than admitting that, after giving up a mid-1^st to acquire Asik, they had to deal another one to get rid of him. What the Pelicans wanted most was an expiring contract in exchange for Asik, not a productive player (as demonstrated by their initial refusal to pick up Niko’s 2018-19 option to complete the deal).

The Bulls could do something similar with their cap space this summer. One possibility is trading the 3 years and $24M left on Cristiano Felicio’s deal for the 2 years and $37M the Lakers still owe Luol Deng, plus draft compensation. The Lakers would gain about $10M in cap space each of these next 2 summers, or if they’re inclined to waive Deng and stretch the cap hit from his remaining salary, they could do the same with Felicio and take a much smaller cap hit annually. As draft compensation, the Lakers could send the recently-acquired Cavs’ 2018 pick, a protected future 1^st, or even the Bulls’ 2019 second rounder the Lakers currently own plus another minor asset. Though Felicio has been buried behind Lauri Markannen, Robin Lopez, Portis, and Mirotic, he’s actually a perfectly adequate backup big man, which the Lakers could probably use after trading Nance and potentially renouncing Brook Lopez and Julius Randle to maximize cap space.

The list of teams still looking to move contracts is a long one, but the list of teams both willing and able to acquire such contracts may be short. This summer I’d keep my eye on the Pacers as the team best-positioned to save someone from their cap nightmare. The Pacers have no bad contracts and 3 large, mostly-unguaranteed deals on the books for next year in Al Jefferson, Darren Collison, and Bojan Bogdanovic,* as well as Thad Young and Cory Joseph’s player options.

Regardless of what the team decides to do with those partially-guaranteed contracts, and regardless of whether Thad Young and Cory Joseph pick up their options, the Pacers will be in an enviable position. They’ll either be one of only a few teams with lots of cap space or they’ll have several attractive expiring contracts to deal. And beyond that they have Victor Oladipo signed through 2021 on a well below-market deal, plus Myles Turner and Domantas Sabonis still on cheap rookie contracts. After Oladipo’s breakout this year, the Pacers are a shrewd move or two away from becoming a serious threat in the East. As the Hornets look to cut costs this summer, maybe one of Charlotte’s starters ends up there.

Also, if the Pelicans do re-sign Cousins, don’t be surprised to see them trade Niko into someone’s cap space, quite possibly the Jazz. Utah needs a stretch 4, and I’m guessing they’d prefer Niko’s youth to Trevor Ariza (free agent), Marvin Williams (unwanted contract), or Ryan Anderson (ditto).

* In prior years the Pacers could have dealt those non-guaranteed deals around draft time in exchange for a lot more guaranteed salary, but the new CBA closed that loophole—now only the guaranteed portion of those contracts counts for trade matching purposes. See Article VII, Section 6(j)(5)(iii) of the new CBA (pp. 211-12).