Nicolas Batum Sign and Trade: The Salary Cap Implications

Nicolas Batum discussion has once again been hopping, this time about potential sign and trades with the Minnesota Timberwolves, perhaps involving Philadelphia and Andre Iguodala as well. Everybody seems pretty shaky on the cap implications-- particularly how such a deal would fit in with the Blazers' proposed offer to Indiana center Roy Hibbert--so let's cover it.

For purposes of this discussion let's assume the following:

  • Batum's deal would be $11 million per year
  • Hibbert's offer is $14 million per year
  • The first deal proposed is a straight sign and trade with Minnesota involving Minnesota's Derrick Williams ($4.8 million) and Martell Webster ($5.7 million but only $600 thousand guaranteed).
  • The second deal proposed would bring Iguodala ($15 million) to Portland instead with Batum going to Minnesota and some package of players headed to Philly.

Click through to see how these pieces match up under the cap in different situations.

Having established the base numbers, here's the important thing to understand. There are two ways of doing this kind of deal.

1. If you make the deal BEFORE making the offer to Hibbert then Batum's new salary would not make the Blazers exceed the cap. Therefore there are no restrictions cap-wise. BUT whatever salary the Blazers take back in trade counts against Portland's cap, potentially lessening the amount available to offer Hibbert.

2. If you make the deal AFTER making the offer to Hibbert then Batum's new salary would take the Blazers over the cap. That IS allowed, as the Blazers have his Bird Rights. However the league doesn't want Bird Rights used as a loophole to circumvent the cap via trade. If you can go over the cap to sign your own free agent and trade him immediately, it's like those Bird Rights gave you access to everybody else's players too. That's not what the Bird exception was meant for. They want Bird Rights to affect only ONE guy, the player in question. They want them used to provide a fair salary so you have a fair chance to retain him for your team, not so you can sneak through an otherwise-unworkable exchange with someone else.

To prevent sign-and-trade shenanigans using Bird Rights the new CBA deems most free agents as BASE YEAR COMPENSATION players for purposes of immediate trades when you exceed the cap using Bird Rights to sign them. For purposes of a sign-and-trade deal Nicolas Batum would become a BYC player if that $11 million contract put the Blazers over the cap.

Base Year Compensation means that whatever salary you trade out, you can only take back half that much...maybe a little more. The new CBA has this 150% rule and blah...blah. The important thing to know is that while the Blazers would trade OUT Batum's $11 million contract in this case, they could only take BACK $8 million-ish for purposes of this trade.

Let's see how these two possibilities play out in each case.

Making the Move Before Making Roy Hibbert an Offer

In the case of the Williams/Webster deal the Blazers are technically taking back $10.1 million in trade for the $11 million they send out in Batum. That doesn't matter in terms of this deal, as they'd still be under the cap. The deal would go through. They'd be sitting somewhere around $44-45 million in cap space, depending on what they bought out Shawne Williams for. That's right on the edge of being able to make a $14 million offer to Hibbert. In any case, they could cut Webster and save approximately $5 million in space immediately. As our good friend Storyteller mentioned to me, Williams and a cut Webster total about the same as Nicolas Batum's current cap hold. No skin off the Blazers' noses. They could make this deal work and still potentially get Hibbert.

The story changes when considering Iguodala, however. His salary approaches $15 million. Now we're talking $49-50 million in cap space taken. That doesn't leave room for a full offer to Hibbert. The Blazers would have to trade away more assets in order to make those numbers work. Trading away Wesley Matthews for nothing (salary-wise) would be the only practical alternative.

The tricky thing with this scenario is that even though the trade itself would be easy to execute, even if you finagled enough space to make the Hibbert offer you don't know if the shoe will drop. The Blazers could consummate this trade, trade away extra players to clear space if necessary, make their offer to Hibbert, and then watch Indiana match. Then you've seriously disrupted your roster and only gotten half the payoff. For this reason it's far more likely we'd see the Blazers...

Making the Move After Making Roy Hibbert an Offer

So let's say the Blazers made that $14 million offer to Hibbert, Indiana didn't match, and he's a Trail Blazer. They now add $14 million to their salary cap, putting them around $48-49 million. They sign Batum at $11 million as part of a sign-and-trade, putting them just over the cap. Now Batum's BYC status kicks in. The Blazers have to take less than $8 million back in return for Batum.

With the Williams/Webster deal this could work. The solution here would be to have Minnesota clear enough cap space to take back Batum's salary outright which they would be able to do if they cut Webster themselves instead of trading him to the Blazers. They then accept Batum's $11 million while giving the Blazers Williams' $4.8, fulfilling the deal.

The Iguodala deal, however, hits a major roadblock. The Blazers would have to find a way to take back $15 million in salary when the most they could take back is $8 million. They'd have to rid themselves of $7 million more in salary before they could receive Iggy. The only possible way to do that would be trading away Wesley Matthews PLUS one of the quartet of Luke Babbitt, Elliot Williams, Nolan Smith, and Kurt Thomas. Again you have to find a team or teams to accept those extra players under their cap too without giving you anything back salary-wise, whether that's Philadelphia or someone else.

What About Trading Away Other Players After Signing Hibbert But Before Making the Iggy Deal so Batum Doesn't Become BYC? Could they get Iguodala then?

The Blazers would only have to cut a couple million in salary after signing Hibbert to clear $11 million for a Batum sign-and-trade free of BYC encumbrance. Sounds simple. But here's the problem. The CBA mandates 12 salary spots counting against your cap at all times. For each player you're short a cap hold gets placed against you for roughly half a million dollars, the rookie minimum salary. So if the Blazers hold the rights to 10 players their cap consists of the salaries/holds of those 10 plus 2 more slots at half a mil each.

As we said, the Blazers only need to cut a couple million dollars. But they're only carrying 12 players in this scenario. Even if they were to start trading away players for no salary in return, they wouldn't get the full amount of the traded contract back on their cap. They'd get that much minus half a million.

Let's say the Blazers found somebody to take Kurt Thomas' $1.3 million salary in exchange for a future second round pick. They don't get $1.3 million back on the cap, but only about $.9. Same with Elliot Williams and Nolan Smith. How many players do you have to trade away for nothing to clear the requisite amount of space? If you're talking the youngsters on rookie contracts it's at least 2, maybe 3. That's probably not happening. So once again the only practical alternative that would clear enough space to make the deal go through is trading Wesley Matthews.

So let's sum up. If you just want Derrick Williams back in a sign-and-trade, you can probably get that done. Almost certainly the Blazers would wait until after the Hibbert signing went through and then execute a BYC-infested deal with Minnesota. But if you want Andre Iguodala (or any similarly high-salaried player in Batum sign-and-trade) be prepared to go through some contortions. In each of these three scenarios the only lever that moves the deal is also losing Wesley Matthews and taking no salary back in return. The Blazers do not have enough players under contract with significant enough salaries to get around that.

Those wondering in the thread below how the Blazers could "balk" at a sign-and-trade involving Iguodala...losing a second starter plus maybe another young player in the process in addition to Batum may explain it.

--Dave (blazersub@gmail.com)

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