Analyzing the motivation behind a potential James Harden trade

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Due to long-term financial concerns, OKC could consider trading James Harden. (Rocky Widner/NBAE/Getty Images)

Imagine if the Thunder approach next season’s trade deadline with a record like 43-9 and suddenly flip James Harden for, say, J.J. Redick and two or three first-round picks — including at least one of Orlando’s picks, likely to land very high in the lottery.

The motivation would be obvious: Save long-term money while keeping the team as competitive as possible in the 2012-13 title race. As I went over yesterday, the Thunder would face a tax bill for 2013-14 and 2014-15 of at least $7.5 million per year, and likely a few million more, if they grant Harden a new max-level contract and retain Kendrick Perkins. Things might get easier after 2014-15, when deals attached to Perkins and Nick Collison expire, but the Thunder would still have something like $65 million committed to just four players. Could they fill the rest of the roster while remaining under the tax in the long-term?

It has been rare, but small-market teams have paid hefty tax bills in consecutive seasons before, per this essential summary from Mark Deeks of ShamSports. The Kings paid a combined $30 million in luxury tax in 2002-03 and the following season, when the economy was in better shape and the Kings were trying to hang on as contenders. The Timberwolves paid nearly $24 million in tax over those same two seasons, during the peak of the Kevin Garnett era. The Spurs have paid the tax five times in the last decade while juggling the Manu Ginobili/Tony Parker/Tim Duncan trio, but only once did they pay more than $2.6 million. The Cavs broke the bank toward the end of the LeBron James era. As I wrote yesterday, it’s possible–perhaps likely–the Thunder simply bite the tax bullet for two years in pursuit of a title. After all, why else do people own sports teams if not to seize a rare chance at history and public good will? At the very least, I’d bet on them prolonging the decision to see how any number of variables–their need for Perkins as they play more small-ball, the tax level, the league’s revenue-sharing system, etc.–play out before doing anything dramatic, since they’ll be able to flip Harden for a massive pile of assets if need be at any time.

But what if the Thunder could both save money and maintain their championship level of play next season — and beyond — at the same time? That will be enormously difficult, especially since Harden, nearing the expiration of his rookie deal, falls into an incredibly complex region of trade rules under the league’s new collective bargaining agreement. He’s also quite good: He’s an All-Star-level player at a weak position who just played in the Olympics and has the ball-handling chops to anchor second units. He is an above-average three-point shooter on a team that needs three-point shooting. Russell Westbrook remains a poor three-point threat, leaving Kevin Durant and Harden as the only rotation regulars (Daequan Cook isn’t quite a rotation regular) capable of stroking the three at an above-average rate on a high number of attempts. The Thunder have ranked around the league average in both three-point percentage and attempts over the last two seasons, and several of their core lineups bring significant spacing issues; there’s a reason the team’s scoring rate jumps so dramatically when Harden enters the game.

Harden isn’t a great defender, and he doesn’t have the size to defend the league’s toughest small forwards when the Thunder attempt to play smaller lineups. But he works at it, and he’s certainly not a defensive liability.

It would be difficult for Oklahoma City to find a reasonable approximation of Harden’s versatile talents on the trade market, especially next season, when Harden will “only” make $5.8 million — a salary that makes it difficult to bring back a top talent under the league’s salary-matching rules.

But there’s an argument to be made that Harden’s skills overlap closely enough with those of Durant and Westbrook to make a trade for the right sort of package, even in the short-term. Step back, and you can see that package taking form: Some cheaper shooting, with perhaps a dash of ball-handling creativity, and multiple high draft picks. Forget the future for a second: Is it possible the Thunder might be able to maintain their current status as (at least) Western Conference co-favorites in 2012-13 if they got that kind of package?  What if Eric Maynor, forgotten after a season-ending knee injury, emerges by the trade deadline as the league’s best back-up point guard — a player with the combination of shooting and pick-and-roll creativity required to fill Harden’s role as the second-unit quarterback? And what if Perry Jones, the Thunder’s first-round draft pick, comes into his own as a second-unit force?

It’s feasible, but it will be very difficult to strike that balance in-season. You can bet Sam Presti, Oklahoma City’s GM, already has a half-dozen in-season trade scenarios for Harden mapped out — and a half-dozen more sign-and-trade scenarios that could apply after the season. That’s the job. Presti has proven willing to make trades that might be unpopular in the short-term; in his first summer as the Sonics GM, he (in what was ultimately an easy choice) ripped apart a decent but shallow playoff team by dealing both Ray Allen and Rashard Lewis.

As for Harden, Houston could get far enough under the cap to offer several types of packages — one built around Kevin Martin’s expiring deal and a couple of picks, including Toronto’s likely lottery pick; or another built around those same picks, plus some combination of young wing players (Jeremy Lamb, Chandler Parsons, etc). (Note: Any deal involving Martin would require the Thunder to send out about $2.5 million in salary on top of Harden). Milwaukee could offer picks, Mike Dunleavy Jr. and an intriguing young player like Tobias Harris or Doron Lamb. The Cavs, also set to be pretty far under the cap, could come in with offers centering around picks and either Tristan Thompson, Dion Waiters or Anderson Varejao. The Hawks could offer Lou Williams, on an affordable three-year deal, plus multiple first-round picks. The Bobcats and Wizards could build offers around future picks and recent lottery selections; Charlotte has one net extra first-rounder thanks to deals with Portland (Gerald Wallace) and Detroit (Corey Maggette/Ben Gordon). The Thunder also could construct three- and four-team scenarios in which they get a pick from one place and the on-court talent from another — scenarios in which some trade exceptions could come into play.

If priority No. 1 is winning a title, none of these offers are that appealing. Some wouldn’t offer guaranteed lottery picks — likely a requirement for Presti — and others (Lou Williams, etc.) wouldn’t provide the proven long-range shooting the Thunder would badly desire. Others are dependent upon the still-unknown progress of rookies and second-year players.

That’s one reason the smart money in any Harden trade scenario is, for now, that the Thunder will wait until the offseason, when the market shakes out and more trade options emerge. If they strike an extension for Harden between now and Halloween, the deadline for such extensions, Harden will be very difficult to trade during the season. The league has a specific rule for that precise scenario, and the rule says Harden in this kind of in-season deal would count as $5.8 million in outgoing salary (his actual 2012-13 salary) for the Thunder but a significantly higher number (the average of his $5.8 million current salary and each annual salary of his extension) for the team that acquires him. That makes the salary-matching math very tricky, especially for teams over the cap — as the Thunder are and will be.

That roadblock vanishes once we reach the offseason. And if the Thunder don’t extend Harden before Oct. 31, the offseason presents sign-and-trade scenarios that aren’t available in between — scenarios in which Harden’s larger outgoing salary might provide better options. Waiting also offers the chance to chase the 2012-13 title with this core, and to get a better read on some long-term variables: Perkins’ value, Jones’ ability, Maynor’s progress and projections for how quickly the tax line will jump.

Look: The motivation behind any Harden trade, at any time, will be to save money and stabilize the franchise’s future. Given the skill overlap between three stars who thrive with the ball, it might be possible for the Thunder to make that kind of trade without fatally injuring their short-term title hopes — either in 2012-13 or the following season. But the motive behind it would still be financial savings, regardless of on-court impact.

And that would make people understandably angry. The luxury tax rates become harsher in 2013-14, but a few teams — the Knicks, Nets and Lakers — have already signaled those rates are not quite high enough to dissuade them from paying three or four players the equivalent of All-Star salaries, plus (in some cases) spending fairly lavishly on the bench. If the Thunder can’t afford to do that with a young core the team drafted and developed, smart people inside and outside of the league will wonder if the tax has actually had a negative impact on competitive balance — the opposite of its intention.

The league would answer that the super-harsh repeater tax penalties will dissuade those big city teams from paying the tax every season, as the Knicks and Mavs used to, and that there have been precious few examples in the modern cap era of teams from any city paying four players All-Star-level salaries. Three players perhaps, but not four — especially when one of them (Durant) earns a larger max salary than is possible for most players coming off their rookie deals.

But the questions will be out there, and they will be valid. In the meantime, you can bank on Presti’s team being way ahead of us in contemplating every possible alternative.

  • Published On 2:12pm, Aug 21, 2012
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    Steve Moore 8 pts

    Harden at trade deadline for a lottery pick, draft Tony Mitchell from N. Texas and you have a 5 yr dynasty (use Jackson,Perry, hell-even Fisher for couple months)

    GaryJordan 5 pts

    Unconfirmed report: ZZ Top has contacted OKC inquiring about trade status for Harden. Offering 3 signed Stratocasters and How, How, How, How t-shirts for every OKC player.

    Steve Moore 8 pts

     GaryJordan Don't trade Dusty!

    orvalhaines 5 pts

    Nothing to add, just wanted to say thanks, Zach, for consistently providing the best analysis on the league out there.

    david87michael 5 pts

    I really like Harden, but I have trouble with the idea of paying him max money. I think he's a good player border on great, but I feel max contracts should be reserved for only the great players.

    I kind of like the idea of trading him for some young pieces and draft picks to bolster the Thunder's bench. The idea of trading him to Houston for the Raptor's draft pick, Chandler Parsons, and maybe Jeremy Lamb would really set the Thunder up for a dynasty.

    The other Houston trade that is intriguing is trading for Kevin Martin and Chandler Parsons. Kevin Martin's expiring contract would give them some flexibility and I really think Chandler Parsons showed some real flashes of potential last year.

    xjoweix 5 pts

    OKC needs someone like Iguodala. 

    Nathan 9 pts

    They should have traded harden and Perkins for Howard. 

    Edward Kastigar 6 pts

    Orlando wanted to dump several of their other players in the same Howard trade. OKC probably would not have been willing to take Duhon, Richardson, Turkoglu, etc.

    Legalyze_It 5 pts

    What I would consider if I were the Thunder, trading Perkins back to the C's in exchange for Sully and Lee. This might be an enticing deal for both parties. OKC can get rid of Perk's salary to re-sign Harden to a semi-max deal, and Boston can get their cherished big man back to make Rondo happy.

    Edward Kastigar 6 pts

    Sullinger and Lee have guaranteed contracts for the next 3 or 4 seasons. This deal wouldn't help Oklahoma's salary situation. And I'm not sure it's a good deal for Boston. They don't need to face Dwight Howard in the playoffs anymore.

    Edward Kastigar 6 pts

    Sorry, edit: Lee's contract is 4 seasons (through June 2016) but Sullinger's rookie contract is guaranteed for only two seasons (through June 2014). So, assuming they cut Sullinger after that, this would give OKC a bit of salary relief in 2014-15, which would've been the final year of Perkins's contract. On the other hand, if OKC trades Perkins, who defends Dwight Howard?