Cap Watch: The Tradeable Contracts

In May, the Cleveland Cavaliers held one of “The Best Trade Chip Contracts” in Brendan Haywood’s non-guaranteed $10.5 million salary.

In late July, the Cavaliers cashed out Haywood, turning his salary into a large trade exception via a trade with the Portland Trail Blazers – giving Cleveland another spending tool that will last for additional year.

Player contracts are often instrumental in trades, especially non/partially-guaranteed deals that can be shed quickly, helping teams open up cap space when needed.

Expiring contracts can also be valuable, although not as much as non-guaranteed deals or trade exceptions.

Some of the players on May’s list were traded (Caron Butler, Shawne Williams, Ersan Ilyasova and Nicolas Batum); others were traded and then traded again (Matt Barnes and Luke Ridnour). The Denver Nuggets chose instead to extend the contracts of Wilson Chandler and Danilo Gallinari.

Others on partially guaranteed contracts were either fully guaranteed (Trevor Booker, Jamal Crawford and Chris Kaman), or cut/opted out by their respective teams (Ben Gordon and Jordan Hill).

Looking ahead to the start of the 2015-16 season, teams need to get their rosters down to 15 players before opening night, an issue for some with 16 or more guaranteed salaries like the Boston Celtics, Detroit Pistons and Minnesota Timberwolves.

Teams will also have until the February 18 NBA trade deadline to make deals, some with eyes on maximizing cap room for the summer of 2016.

The following list represents the top trade chip contracts:

1) Kostas Papanikolaou ($4.8 million), Nuggets: Denver has until October 4 to decide if they want to keep Papanikolaou after acquiring him earlier in the summer as part of the Ty Lawson trade with the Houston Rockets.  A number of teams are looking to dump guaranteed players to open up roster space.  The Nuggets may be willing to accommodate, even if it means they add more dead money to their books like waived Joey Dorsey and Pablo Prigioni.

2) Cap room: No, not a trade chip contract, but still a potent tool for teams looking to get out of contracts.  The Portland Trail Blazers (up to $20.3 million) and Philadelphia 76ers (up to $17.0 million) are the primary players, although the Utah Jazz can get near $10.0 million in space once they prune their roster down to 15.  The Nuggets could also drop back down to under the cap by about $3.1 million if they cut Papanikolaou before he guarantees.

3) Various trade exceptions: Papanikolaou represents the largest non-guaranteed contract left for the 2015-16 season, but a number of teams have sizable trade exceptions, including the Cavaliers ($10.5 million, Haywood), Golden State Warriors ($5.4 million, David Lee and $3.2 million, Gerald Wallace), Milwaukee Bucks ($5.2 million, Zaza Pachulia and $4.3 million, Jared Dudley), Timberwolves ($5.0 million, Chase Budinger and $2.8 million, Corey Brewer).  Other teams have multiple small trade exceptions, such as the Oklahoma City Thunder with three above $2.0 million, the largest at $2.8 million for Ridnour.

The next group of players are guaranteed for the coming season, but not for 2016-17:

4) Amir Johnson ($12.0 million), Jonas Jerebko ($5.0 million), Celtics: Looking ahead to the summer of 2016, the Celtics have a couple of serious trade chips with Johnson and Jerebko, who can be combined to bring back roughly $22.0 million in returning salary.  The incoming team can just waive both, shedding serious, immediate money from their books.  Neither Johnson nor Jerebko can be dealt until after December 15, and their true value in trade won’t be realized until 2016, but they will certainly top the next iteration of this list.

5) Ty Lawson ($13.2 million), Rockets: To facilitate his trade to the Nuggets, Lawson agreed to remove the salary protection on his 2016-17 salary.  The Rockets either have their point guard for the next two seasons, or a valuable trade chip.

6) Martell Webster (5.8 million), Kris Humphries ($4.6 million), Drew Gooden ($3.5 million), DeJuan Blair ($2.0 million), Wizards: The foursome combine to make $16.0 million in 2016-17 season, but only Webster has any guaranteed money at $2.5 million.

7) Ersan Ilyasova ($8.4 million), Pistons: Ilyasova is only guaranteed $400,000 of the salary in his final year.

8) Jason Thompson ($7.0 million), Shaun Livingston ($5.8 million, Warriors: Thompson has a guarantee of $2.7 million for 2016-17.  Additionally, roughly $663,000 of his salary was paid out by the Sacramento Kings as a trade bonus when they sent him to the Philadelphia 76ers (who re-rerouted him to the Warriors).  Livingston’s contract is $3.0 million guaranteed.

9) Boris Diaw ($7.0 million), Spurs: Diaw’s contract only promises him $3 million for 2016-17 and is entirely non-guaranteed at $7.5 million for 2017-18.

10) Jarrett Jack ($6.3 million), Nets: Jack has just $500k of his 2016-17 guaranteed.

11) Mike Scott ($3.3 million), Shelvin Mack ($2.4 million), Hawks: Scott and Mack combine for $5.7 million of non-guaranteed salary for 2016-17.

12) J.R. Smith (5.4 million), Cavaliers: Smith can block a trade this season, unless he takes his player option for 2016-17, which is only $2.2 million guaranteed.

13) P.J. Tucker ($5.3 million), Suns: Tucker is only locked in for $1.5 million for 2016-17.

14) Old-fashioned 2015-16 expiring contracts: While cap room, trade exceptions and non-guaranteed salary may be more enticing, expiring deals still hold value.

The list ranges from Nets’ Joe Johnson ($24.9 million) to Oklahoma City Thunder’s Kevin Durant ($20.2 million), who is obviously a target of the entire league.  It’s hard to imagine the Thunder dealing Durant, unless they are convinced he won’t return in free agency.

Others include New Orleans Pelicans’ Eric Gordon ($15.5 million) and Ryan Anderson ($8.5 million), Celtics’ David Lee ($15.5 million), Wizards’ Nene ($13 million), Charlotte Hornets’ Al Jefferson ($13.5 million), Nicolas Batum ($12.2 million) and Marvin Williams ($7.0 million), Chicago Bulls’ Joakim Noah ($13.4 million). Miami HEAT’s Luol Deng ($10.2 million), Chris Andersen ($5.0 million) and Mario Chalmers ($4.3 million), Memphis Grizzlies’ Jeff Green ($9.6 million), Detroit Pistons’ Brandon Jennings ($8.4 million), Bucks’ O.J. Mayo ($8 million), and Los Angeles Clippers’ Jamal Crawford ($5.7 million), among others.