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Memphis Grizzlies Seeking Possible Trade For Luol Deng

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The Memphis Grizzlies, aiming to bolster their scoring and playmaking options on the wing in the increasingly competitive Western Conference, are having discussions about trading for the Miami Heat’s Luol Deng or the Boston Celtics’ Jeff Green in advance of the Feb. 19 trade deadline.

Any Grizzlies offer for Deng or Green is likely to feature the $7.7 million expiring contract of Tayshaun Prince, as well as the promise of future draft compensation to serve as an enticement to complete the trade.

It is not immediately clear how willing Miami would be to trade Deng, who is not even halfway through the first of a two-year, $19.9 million contract he signed with the Heat in the wake of LeBron James’ return to the Cleveland Cavaliers via free agency this past summer.

After James departed, Heat president Pat Riley said “I want this team to be as competitive as it’s ever been.” But he spoke of pursuing two distinct and simultaneous courses of action: trying to stay in the playoff race for the following two seasons – even while the Heat’s 2015 first round pick is owed to the Philadelphia 76ers if it is outside the top 10 – but with a clear focus on maintaining flexibility for the expected availability of several top free agents in the summer of 2016.

With the Heat already at 15-20 as it begins a challenging five-game road trip out west, it is unclear as to how willing Riley might be to sacrifice the former for the benefit of the latter.

Trading Deng could, among other things, damage the Heat’s ability to make the playoffs this season as well as put at risk its ability to clear its first round pick obligation off the books this summer. The pick is top-10 protected for this season and next, and becomes fully unprotected if not previously conveyed.

But trading Deng could also provide the Heat with a far better pick — a top 10 pick — in what is presently considered to be a deep draft this summer as well as with the additional draft pick compensation to be received in the trade. That could set the Heat up quite well for the summer of 2016.

All trade proposals should surely be considered even if not ultimately pursued.

But trade scenarios are complicated.

Deng is earning $9.7 million this season, and he has a player option that would pay him $10.2 million for next season if he exercises it in June. But he also has a trade bonus which, by rule, he cannot waive, in whole or in part, except to make a potential trade legal.

Deng’s trade bonus would be valued at 15 percent of his remaining salary for the season, the amount of which would depend upon the exact day he is traded. If Deng were to be traded today, his bonus would be $840K; if he were traded at the trade deadline, it would be $480K. The amount of the trade bonus, if any, would be allocated entirely to this season.

A straight up trade of Deng for Prince would be legal, but only if Deng were to agree to surrender the vast majority of his trade bonus (all but $20K). Deng would therefore effectively hold veto power over such trade discussions. 

Even if Deng were willing to approve, Memphis itself may not want to structure the trade as a straight-up swap anyway. The Grizzlies are just $1.2 million below the tax threshold. A swap would leave the team with 14 players on the roster, with a team salary that is $832K over the tax line.

The Grizzlies have no intention of paying the tax. They have not done so since the 2005-06 season, under previous team owner Michael Heisley.

Any trade scenarios between the teams that requires no player approvals would therefore necessitate that: (i) Deng receive his full trade bonus and (ii) the Grizzlies wind up below the tax.

Deng’s full incoming salary, including the trade bonus, would be smallest for the Grizzlies at the trade deadline: $10.2 million. At the trade deadline, Memphis would need to send back at least $1.3 million in additional salaries along Prince, $9.0 million total, in exchange for Deng in order to avoid the luxury tax.

The basic framework for the trade could therefore be as follows: Luol Deng for Tayshaun Prince and a player making at least $1.3 million.

But trade scenarios are further complicated by virtue of the Heat’s desire not to pay the luxury tax either. Having exceeded the tax in each of the past three years, doing so would cause the Heat to pay the “repeater” tax, which adds an additional $1 in taxes for every dollar by which the Heat’s team salary exceeds the tax threshold to the already onerous incremental tax rates the NBA implemented starting last season.

The Heat – which currently has 14 players on the roster, and could take on one more player in trade than it sends out – is currently $4.5 million below the tax threshold.

Therefore, the most salary the Heat would likely be willing to take on in a trade for Deng, so as to avoid the tax, is his salary plus an additional $4.5 million, or $14.2 million total. That equates to as much as $6.5 million in additional salaries, along with Prince.

The basic framework for a potential trade could therefore be as follows: Luol Deng for Tayshaun Prince and a player earning between $1.3 million and $6.5 million.

Grizzlies players earning a salary in that range include: Jordan Adams, Beno Udrih, Kosta Koufos, Quincy Pondexter, Vince Carter, Tony Allen and Courtney Lee.

Among the possibilities that might pique Heat interest with whom the Grizzlies may possibly be willing to part include Adams, a 6-foot, 5-inch shooting guard selected with the No. 22 pick in 2014 draft, and Koufos, an overqualified backup center in Memphis with extensive starting experience and an expiring contract.

But trade scenarios would be further complicated if Memphis were to include draft considerations in the deal. The Grizzlies are greatly restricted in what they can offer.

When the Denver Nuggets traded center Timofey Mozgov to Cleveland on Wednesday, it received two first-round draft picks in return – one of which was a future protected Memphis pick controlled by Cleveland.

Cleveland had the protected first-round pick that Memphis sent along with Marreese Speights, Wayne Ellington and Josh Selby for Jon Leuer in January 2013. In 2015 or 2016, if the Grizzlies’ first-rounder falls between picks 6-14, the pick goes to the Nuggets. Starting in 2017, if the Grizzlies’ pick falls outside the top five, the Nuggets then get the selection. In 2019, the pick becomes unprotected.

Assuming the Grizzlies make the playoffs both this season and next, the pick will likely be conveyed to the Nuggets in 2017.

The earliest first round pick the Grizzlies could offer the Heat is a conditional one to be dealt two years after the pick obligation to Denver is conveyed, likely in 2019. Any pick that would be conveyed to the Heat could itself have protections that extend through the year 2021.

The basic framework for a potential trade could therefore be finalized as follows: Luol Deng for Tayshaun Prince, a player earning between $1.3 million and $6.5 million, and a future first round draft pick which is both conditional and protected. The pick would be issued at least two years after the Grizzlies’ obligation to the Nuggets is fulfilled, but likely subject to protections from 2017 through 2020 before becoming unprotected in 2021. The Heat could realistically expect to receive it in 2019.

Intricate cap rules have therefore made it rather easy to predict the potential structure of a trade that the Grizzlies and Heat would pursue if the Heat were to have an interest. No deals are imminent because there is no indication such a package of players and draft considerations would entice Miami.

Boston, however, is in rebuilding mode and there is a league-wide belief that Green will be moved by the trade deadline.

Trade scenarios with Boston are less complicated for the Grizzlies, but the player himself is less enticing. Green is earning $9.2 million this season, and has a player option at the same amount for next season. Memphis would still not be able to avoid the tax with a straight up swap, but could include any other lower-salaried player on the roster to accomplish its goal.

The question becomes: If you were Pat Riley, what combination of Prince, another player, and draft considerations would you demand?

Note:

In my humble opinion, the Miami Heat should absolutely consider possible trade scenarios for Luol Deng. This Heat team is not likely to be an NBA title contender, and Deng is unlikely to be a long-term solution for the Heat. The Heat need to think about their future, even if it means sacrificing the present. Trading Deng would reduce the Heat’s projected team salary for next season by $10 million, allow the Heat to potentially keep a far more desirable draft pick, and bring back critical future assets.

If I were negotiating for the Heat, I would attempt to structure a potential trade of Deng for Tayshaun Prince (expiring contract), Jordan Adams and a future first round draft pick. If successful, I would execute such trade. 

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