Joel Anthony Trade Would Make Financial Sense

The speculation surrounding the fate of Greg Oden is intensifying.

One microfracture surgery is usually enough to scare most teams off, let alone three in less than five years. But the former No. 1 pick is not short of suitors as he attempts his latest comeback.

The 25-year-old worked out for Miami, San Antonio, New Orleans, Atlanta, and Sacramento in Indianapolis last week. He reportedly looked “lean” and moved “quite well.”

Teams will be asked to make formal offers early this week.

Oden is thought to be favoring Miami and New Orleans. New Orleans can offer as much as the $2.474 million remaining of its Non-Taxpayer Mid-Level exception. The Heat can offer up to the $3.183 million Taxpayer Mid-Level exception.

Miami would love to get him for the minimum, but they may be required to match a potential Pelicans bid. In Miami’s case, the actual cost would be much more than for the Pelicans. A $2.474 million offer would cost the Heat $8.659 million when considering the tax.

New Orleans could further attempt to out-muscle Miami by offering a guaranteed two-year contract. It would be a calculated gamble for the Pelicans, at a total cost of $5 million. For the Heat, the addition of a second year at those levels would cost, at the very least, another $10 million under the current construct. That’s two years and roughly $19 million.

That’s a lot for Miami to spend on a man who has thus far only ever proven that he is very tall, that he is very talented, and that his body has been unable to withstand the rigors of NBA play. There’s simply no way the Heat is going to offer it up without some key protections — among them that their obligations be reduced in the event of re-injury and that Oden be unable to opt out after just one season. But even if they do get those protections, even if they do offer up the contract, even if Oden does accept, and even if he does prove healthy, it’s still monumentally expensive for an owner trying desperately to keep his team together.

The more likely scenario for the Heat is a one year minimum salary offer. But, even still, the Heat’s team salary would reach an all-time record $107 million.

There is one clear way in which to lower the team’s total cost no matter what type of contract the Heat offer – trade Joel Anthony. 

Anthony has a year remaining on his contract at $3.8 million, plus a player option for a second year at the same value which he is sure to exercise. When including the tax, he will cost at least $11 million this year and at least $28 million over the two years remaining on his deal. He serves the same role for the Heat as would Oden in the worst of circumstances. He doesn’t play at all.

The Heat realize what a burden Anthony’s contract creates. They’ve been rumored to be actively trying to trade him for several months now. Finding a willing trade partner has thus far been impossible.

They engaged with the Raptors about a potential swap for Marcus Camby. Camby had arrived in Toronto the week before with two years remaining on his deal at $4.4 million and $4.2 million, the second season partially guaranteed at just over $1 million, leaving a total of $5.4 million in guaranteed salary. But the Raptors declined. They wanted no part of Anthony or his $3.8 million 2014-15 salary obligation. They negotiated a buyout of Camby instead.

The Raptors effectively chose to pay Camby $3.4 million to walk away, rather than to replace him with Anthony and however much cash the Heat was offering as an inducement. There isn’t a whole lot of demand around the league for a soon-to-be 31-year-old power forward playing out of position at center due to severe offensive limitations, particularly one who also can’t rebound the basketball – not at the minimum salary and certainly not at roughly 4x that amount.

The Heat need to identify a potential partner with the necessary room to swallow Anthony’s contract and the willingness to entertain a trade. There aren’t many. There are only three teams with the necessary cap space – Philadelphia, Milwaukee and Atlanta – and another three with a trade exception large enough without itself exceeding the tax threshold – Denver, Golden State and Orlando.

None is even remotely likely as a trade partner. But if there were one, it would be the Philadelphia 76ers.

The Sixers are well below the league-mandated minimum team salary for the season of $52.8 million. They’re going to need to spend some more money anyway.

Currently they have just $39.6 million in salaries on their books. Eventually they’ll sign draft picks Nerlens Noel (6th, acquired from the New Orleans Pelicans) and Michael Carter-Williams (11th) — pushing the total to $45.0 million.

Even then, they will still find themselves about $7.8 million short despite a relatively full, 13-player roster. They are required, by league rule, to spend it before the end of the season. If they don’t, the shortfall will be given to the players on the Philadelphia roster as a bonus.

The Sixers have seemingly embraced the rebuilding process, trading All-Star point guard Jrue Holiday while staying out of the summer’s free agent chase. The team should be awful enough this season to compete for a top lottery pick in 2014 when players like Andrew Wiggins, Julius Randle, Aaron Gordon, Jabari Parker, Marcus Smart and Dante Exum are expected to join the NBA.

Ultimately, they are going to have to spend at least that $7.8 million – be it through trade, free agency, or as a bonus to their existing players at the end of the season. They haven’t signed a single free agent thus far this summer and will almost certainly choose not to sign any of significance. Giving it to the team’s existing players in the form of a bonus at the end of the season amounts to wasting it. If you’ve got to spend it, you may as well get something in exchange. Cap space is a valuable asset in trade, one that can be leveraged for a significant return.

Philly will undoubtedly entertain possible trade scenarios at some point, but presumably would only pull the trigger in a way that helps their future without disrupting the futility of the present. They can spend as much as $16.2 million and still remain below the salary cap. Acquiring youngsters with potential or future draft considerations seems to make the most sense.

There are currently seven teams over the tax line for next season. Several will be vying to utilize Philly’s cap space as a potential dumping ground. They’re not just going to give it away. The minimum threshold does not have to be met until the final day of the regular season. There’s nine months of potential trade talks between now and then. Don’t expect a knee-jerk reaction. The Heat’s offer needs to be compelling.

What would you offer as a means to facilitate a trade?

The Heat has just one youngster who holds any trade value. That’s Norris Cole. The Heat could look to package Cole as a means to dump Anthony’s contract. It’s a trade that possesses a certain degree of merit for a Sixers team that currently has just one point guard on its roster, and a rookie at that.

Cole is on a low-money contract, he is locked in for two more seasons, he will become a restricted free agent thereafter (giving the Heat the right to match any outside offers), he has shown steady improvement over his first two seasons in the league, he has a vastly improving three-point shot, and he brings a defensive aspect to the position that no one else on the team can provide. He has real potential.

Salary cap rules make offering draft considerations a tricky endeavor for the Heat.

A return of their 2014 protected first round draft pick, which was acquired in the Arnett Moultrie trade in June 2012, seems like an obvious starting point. But that’s likely to turn into high second round picks in 2015 and 2016. But that’s not likely to be enough.

The Heat can also offer up to $3.2 million in cash considerations, but cash isn’t a great motivator. Or much of a differentiating factor.

The Heat’s second round picks have no value. The chances of a player chosen in the bottom few picks in the draft ever making it into the NBA are slim. Such picks are valued accordingly in trade.

The Heat can’t trade a first round pick of its own until 2017 at the earliest – that’s one year after the Big Three contracts expire. Miami continues to trade away draft picks as a means of supporting the Big Three. But now we’d be talking about trading away picks that extend beyond the tenure of their contracts. That’s dangerous. The Heat could be in rebuilding mode at that time and the pick could wind up being a high lottery pick. They could chose to place some protections on the pick but that, in turn, reduces its value in trade.

A preferred package might be the Philly pick back and cash. But would you trade a 2017 first round pick if you needed to, perhaps if it were lottery protected for a couple years and would then turn into high second round picks in 2018 and 2019? Would you trade Norris Cole?

What package can you build that you would be okay with losing in trade in order to clear the more than $28 million in payroll expenses to a player who likely won’t contribute whatsoever over the next two years? What package would you build if clearing those expenses gave you the wherewithal to utilize the Mid-Level exception next summer?

Would Philly accept?

2 Responses

  1. Dave Ryan says:

    Great article.

    There is too much risk in trading a 2017 first round pick. On the back end, the chance of needing that number one pick in the absence of the Big 3 would be key. On the front end, the Heat are just an injury away from really needing some minutes from Joel. That’s my perspective as a fan.

    Joel’s contract comes to an end after the 2014-15 season. Only the Big 3 and Norris Cole are on the books for the following season.

    While I’m sure that the Heat would appreciate more short term deal making financial flexibility that having Joel’s contract off the books would give them, this is really a budget issue that only Arinson can sort out.

  2. Albert says:

    @Dave Ryan
    While I wrote the article to spark some intrigue, I don’t think any of it will actually happen. Just killing time until the decision is made.

    Ultimately, I don’t believe the Heat will be able to trade Joel Anthony, nor do I believe they will offer Oden more than the minimum salary.

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