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Why the Blazers Traded for Anderson Varejao then Waived Him

The Blazers made good with freebies at the trade deadline. Here's how it worked.

Troy Taormina-USA TODAY Sports

The Portland Trail Blazers made two moves at today's NBA trade deadline. They received forward Anderson Varejao from the Cleveland Cavaliers along with an unspecified first-round pick in exchange for a future second-rounder. They also picked up point guard Brian Roberts from the Miami Heat along with a second-round pick. They are expected to waive Varejao and retain Roberts through the end of the season, when his contract expires. They waived guard Tim Frazier in the process.

The official press release from the Trail Blazers regarding the Varejao deal is brief, containing only a single quote:

"This was an opportunistic way to use our cap room to acquire a valuable asset," said [President of Basketball Operations Neil] Olshey.

Prior to these moves, the Blazers sat roughly $14 million below the NBA's minimum salary cap threshold, defined by the Collective Bargaining Agreement between the league and its players. Had the Blazers not made these deals, they'd be required to cut a check to their current players for that amount at the end of the season, to be distributed among the roster.

With these moves, the Blazers all but eliminate that obligation. After the trades are finalized, the cap obligations of Varejao ($9.6 million plus a trade kicker) and Roberts ($2.8 million) will bring the Blazers close to the cap threshold. The amount they owe to their current roster will be negligible.

But here's the real twist. Because they're picking up both players midway through the season, the Blazers only pay them for the amount of time served in a Portland uniform. The number on the cap books says $13-million-ish combined, but the Blazers will only end up paying around $4 million in real salary to Varejao and Roberts.

Varejao has partially-guaranteed years remaining on his contract. When they waive him, the Blazers will use the salary cap stretch provision to spread their payments on that remaining amount over 5 years, resulting in an obligation of $2 million per year...$10 million total. Added to the $4 million they owe this year, that makes $14 million.

Key Point: The Blazers would have paid $14 million at the end of the year had they made no moves today. The Blazers pay the same $14 million (spread out over a number of years) with the moves they made. The financials are essentially a wash, give or take a million.

The big difference, of course, is the first-round pick acquired from Cleveland in the process. For the Blazers, that's the equivalent of finding a quarter lying on the ground. It cost them almost nothing...just the willingness to accept a trade and shuffle reserve point guards. The pick not only gives them an extra player to draft, it allows them more flexibility in future trades. They have another trade asset now and they wiggle free of the Stepien Rule which prevents teams from leaving themselves without first-round picks in consecutive years. Portland owes its 2016 first-round pick to Denver but protection clauses tie up Portland's ability to trade first-rounders through 2019. This eases that burden.

The only thing as yet unclear about these deals is the status of the promised pick from Cleveland. According to RealGM's future draft obligation page, the Cavaliers owe their first-round pick this year to Phoenix. It's lottery protected, and the terms of that protection run through 2019. Technically that means the Cavaliers should not be able to promise Portland a first-round pick until 2021, unless Phoenix and Cleveland have agreed to waive the protection clause. The Columbian's Erik Gundersen offers this:

It doesn't solve the issue. The official press release describes only a "future first round pick". We'll bring you more details as they evolve.

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