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Cash Flow

March 07, 2005
March 07, 2005

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March 7, 2005

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Cash Flow

An explosion of NBA deadline deals--which saw dozens of players heading to new homes--had less to do with basketball than financial planning

Last week 35 players were dealt by 11 teams just before the NBA trading deadline. It was the biggest midseason flurry since 1987, and, by traditional standards, the weirdest ever. The only trade that made sense purely from a basketball standpoint was Cleveland's acquisition of Boston swingman Jiri Welsch for a future first-round draft pick, a deal that should help the Cavaliers in the playoffs while opening up minutes in the Celtics backcourt for rookies Tony Allen and Delonte West.

This is an article from the March 7, 2005 issue Original Layout

Every other trade would have confounded someone who only followed the action on the court. Even a nine-year-old fan would probably not be gullible enough to give away 25-year-old All-Star point guard Baron Davis in exchange for Golden State nonstars Dale Davis and Speedy Claxton, as the Hornets just did. But then not many third-graders can grasp the intricacies of the NBA marketplace, where the hottest commodity nowadays isn't size or speed. It's salary cap space.

The numbers in the players' contracts tell the story. Consider the 76ers' acquisition of Sacramento's five-time All-Star, Chris Webber, for three role players. It looked like a steal to Philly fans, who bought 6,500 tickets in the 24 hours after hearing that their beloved Allen Iverson, who has played alongside exactly one All-Star in eight years with the Sixers, had finally been paired with a peer. But given the financial realities of the NBA, the big winner might be Kings G.M. Geoff Petrie. Webber's age (32) and suspect left knee made his four-year, $80 million contract a millstone around Petrie's neck. The Kings, who made the deal on Feb. 23, realized they can't contend with him occupying so much of their budget. So Petrie gave him away to procure some depth--and, more significantly, a healthier financial future in which it will be easier for him to re-sign his 27-year-old franchise-player-in-waiting, Peja Stojakovic.

The stage has been set for this new era over the last decade, as the salaries of even mediocre performers swelled. The G.M.'s art is also shaped by league rules which state (with a few loopholes here and there) that a player can be swapped only for one or more guys making a similarly obscene amount. Thus the Bucks last week sent Keith Van Horn to Dallas for Calvin Booth and Alan Henderson. Van Horn, Milwaukee's fourth leading scorer, makes $14.5 million; the two journeymen make a combined $14.1 million.

Why would the Mavericks want Van Horn, who has been traded four times in the past three years in exchanges involving 12 players and three draft picks? He's a decent scorer who can help Dallas in the short term, and the fact that he's due $15.7 million next season in the final year of his contract makes him tradable--again. And why would the Bucks give him up for nothing? Because with Henderson's $8.3 million salary off the books next year they'll have more room to re-sign their free agent-to-be Michael Redd, who's scoring 22.4 points per game. It's the same reason the Hornets gave up Baron Davis. This summer, with Dale Davis off the books, New Orleans could be more than $10 million under the cap.

Payroll management has become so important that last summer the Lakers sent perhaps the most dominant player of his generation, Shaquille O'Neal, to the Heat for largely fiscal reasons. (The team had no desire to give him the huge extension he was seeking.) But L.A. might do the same thing with Shaq's foil, Kobe Bryant, if he doesn't bring another championship soon. Somewhere down the line of his new seven-year, $136 million deal, he might find himself packing for Memphis or Salt Lake City if the Lakers think they can find better value elsewhere.

One man who seems to be swimming against this current is Knicks president Isiah Thomas. While his rivals surrender talent to save money, Thomas takes on salary. He was vilified in the press last week for acquiring Malik Rose and Maurice Taylor, who saddled his organization with an additional $30 million in long-term salaries. But the moves actually make the Knicks marginally better in the short term and leaves Thomas a few aces up his sleeve. When the trade window reopens in the summer, he can try to deal away the final-year contracts of Penny Hardaway ($15.6 million) and Tim Thomas ($14.0 million). The following year, he can offload Taylor ($9.8 million) and Allan Houston ($20.7 million). If he can parlay those expiring contracts into a couple of all-stars, Thomas may wind up gaming the system.

If I could do it, somebody else could do it. I wasn't Superman. --CAL RIPKEN JR. Q+A, PAGE 23

COLOR ILLUSTRATIONILLUSTRATION BY JEFF WONG