Financial Impact Of Deadline, Buyouts: Southwest

The effects of the trade deadline are still being felt around the NBA as teams work buyout deals, negotiate with new free agents and fill open roster spots. Hoops Rumors will be taking a team-by-team look at the financial ramifications not just of the deadline itself but of the post-deadline moves. We’ll start this series of posts today with the Southwest Division:


  • Memphis gave up Courtney Lee, Jeff Green and $542,714 cash in two separate trades to bring back Lance StephensonP.J. Hairston, Chris Andersen and five future draft picks. None of the players they relinquished nor any they acquired have guaranteed salary for next season, so the deals don’t affect the ledger for 2016/17 at all, beyond the opportunity to pick up a $9.405MM team option on Stephenson. The net effect on this season’s payroll was the addition of a miniscule $76,440, which still leaves the Grizzlies about $2MM shy of the tax line, enough breathing room to make minimum-salary signings if they want. Memphis also gained a $450K trade exception from the difference between Green’s $9.45MM salary and Stephenson’s $9MM pay. The cash they sent to the Hornets in the Lee trade compromises their flexibility to a slight degree come draft time, when many teams swap cash for second-rounders. They’ll have $2,857,286 instead of $3.4MM to send out in those sorts of trades, though the picks they acquired last week give the team plenty of draft assets.


  • The Mavs didn’t make a trade, but they dabbled in the buyout market, signing David Lee the day after he came off waivers from the Celtics. Dallas reportedly used the prorated room exception on Lee, so assuming he gets the full amount left on the exception, Lee is making $2,085,671. The exception, originally worth $2.814MM, prorates by 1/170th each day starting January 10th. Dallas waived John Jenkins to make room for Lee on the roster, but the Suns claimed him and his guaranteed minimum salary of $981,349 off waivers. Jenkins has non-guaranteed salaries on his contract for next season and 2017/18, so even if Jenkins had cleared waivers, it wouldn’t have affected the Mavs’ long-term accounting. Instead, they merely hike this season’s payroll by the amount of Lee’s salary, minus Jenkins’ $981,349 pay, but since they were only at about $72MM anyway, well shy of the $84.74MM tax threshold, the team is in no financial danger.


  • New Orleans essentially converted a trade exception into cash that they used to fund a partial guarantee for next season in their new contract with Bryce Dejean-Jones. As Eric Pincus of Basketball Insiders pointed out, the Pelicans used the $947,276 trade exception they created when they traded Ish Smith to the Sixers in December to accommodate Jarnell Stokes, whom the Heat dealt Thursday to New Orleans. The Pelicans also received $721,300 cash from Miami in the Stokes trade, Pincus notes, and the only asset New Orleans relinquished was a top-55 protected second-round pick that will likely never change hands, making it the virtual equivalent of a phony asset. New Orleans waived Stokes shortly after the trade to reopen the roster spot that Dejean-Jones had been in while he was on his pair of 10-day contracts. Dejean-Jones apparently had talks with at least five other NBA teams before the Pelicans lured him back with the partial guarantee he was reportedly seeking. It’s unclear just how much that guarantee is worth, but it goes on next season’s ledger, while Jones’ salary for the rest of this season and Stokes’ full-season pay of $845,059 is on the cap for New Orleans this year, even though the Pelicans will actually pay only a prorated percentage of what Stokes is making. The Pelicans are still about $4MM shy of the tax line, which leaves plenty of room.


  • The Rockets would have escaped the luxury tax, added about $3.2MM of room beneath their hard cap and created a pair of trade exceptions if their three-team trade with the Pistons and Grizzlies had gone through. The voiding of the deal leaves Houston with none of that. The team’s net cost of the trade falling through is about $8MM in payroll and projected tax obligations combined.


  • San Antonio stood pat, not surprising given their record, which is now 47-9.

The Basketball Insiders salary pages were used in the creation of this post.

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