What The Harden Trade Means To The Mavs

OKC traded James Harden to Houston and sent ripples throughout the NBA. Or was it a tidal wave of reactions? (An NBA Frankenstorm?) How does this impact the Mavs? And the NBA? Some in-depth points about the swap - including frustrating details regarding how Dallas was, sort of, involved in the blockbuster:

1. This hurts OKC's title chances this season.

Yes, trading Harden may clear up some financial room for OKC in the future, and they may eventually regain talent (perhaps even show a gain in talent) way down the road when they harvest and develop those picks they received – but this season, swapping Harden for Martin makes them less formidable. That's the stark truth for the Thunder here.

As a result, their chance to make it to the NBA Finals is lessened. For a Mavs team with title aspirations, that's a good thing.

2. To a great degree, this removes Houston from the competition for the next star player. That should help the Mavs.

They've now spent the draft stockpile they had amassed for their pursuit of Dwight Howard. The extra picks all went to OKC, and both their own 2013 picks had already been traded as well (although with some degree of protection, if the Rockets end up with a lousy team picking high in the draft).
Their core is now Asik, Harden, and Lin. While those 3 only cost about $30M total, with some theoretical room for another prime free agent addition, to do so the rest of the roster would have to be manned almost entirely by cheap rookie-scale contracts and minimum salary players. So for practical purposes, the Rockets of the future will Asik, Harden, Lin, Player X, and a bunch of cheapies, or Asik, Harden, and Lin and a roster full of miscellaneous. (And for what it's worth, we have a hard time seeing big playoff potential in either possibility.)

3. This swap (with Harden's planned signing of an extension in Houston) obviously removes Harden from the possible Mav list of future targets.

That's a negative for Dallas, because the more possibilities, the better the chances.

4. Could the Mavs have out-bid Houston for Harden? It would have been virtually impossible.

OKC wanted picks (which are cap bargains, when they are good players) and young cheap talent in exchange. Houston had far better assets of that sort to offer, especially picks. OKC got Lamb (essentially he's a lottery pick, since he was the #12 pick in 2012), a future (probably 2013) first-rounder in the 20s, a future (probably 2013) first-rounder that's guaranteed to be a lottery pick, and what's likely to be the top pick in round 2 in 2013.

The bottom line financially is that the four players they'll end up with will cost them about $10M less a year than Harden (plus 3 minimum salary players) would have.

OKC also got a very usable starting-caliber SG (or 6th man scorer) on an expiring deal (Martin) whose expiring contract means he can probably be flipped for added assets if the Thunder wish.

Dallas couldn't have matched that offer. In addition, a huge portion of the Mavs' roster was ineligible to be traded at this time (players signing new contracts, other than draft picks, can't be traded until Dec. 15).

5. This deal gives further reason to wonder: will having all the top players go through free agency matter?

Under the new CBA, extensions other than the ones at the end of rookie scale deals are pretty much a thing of the past. So now virtually all players will get to free agency, other than those coming off a rookie scale deal.

It remains to be seen if any superstars change teams via free agency as a result of this change in the landscape. So far, it looks like top players will use that looming free agency primarily as leverage to force a trade to an acceptable team, where they will then re-sign.

6. To take that point further and apply it to Dallas, this outcome with Harden might motivate the Mavs to consider an adjustment in their outlook towards acquiring top level players under the new rules.

Under the old CBA, the Mavs' approach was to try to have a full-and-overflowing cupboard with talent to trade, and to eventually trade their way to a top-tier roster. But under the new CBA, they modified their position, to have cap room, and now have been looking to: (a) target talented players in summer free agency at bargain prices, and (b) eventually sign a star player (or two) in free agency, when a team is for some reason unable to keep their star.

But the Harden deal further raises the question: are the star players truly going to prove to be available to teams who pursue them with cap room? While the new CBA clearly may have motivated the Thunder to make Harden available, he didn't (and apparently won't) get to free agency. Instead he was traded and will sign an extension with a different team. In addition, Dwight Howard and Chris Paul will get to free agency in 2013, but seem virtual locks to sign with the team they were traded to. And Deron Williams signed with the Nets in 2012, after more or less forcing his way out of Utah.

Altogether it appears that trade assets, rather than dollars to spend in free agency, are the coin of the realm for those wanting to add a star to their roster. Teams lacking either the pizzazz or the financial freedom to satisfy and keep those top players, are proactively trading them before free agency arrives. The new CBA may make the star more available than before, but the team ending up with the star is proving to be the one with the trade assets to offer, not the one with cap room.

7. The ugly capper on this deal? One of the assets that Houston used to get Harden was the pick that Dallas sent to LA for Lamar Odom.
That deal – one that I thought was great for the Mavs when it happened - has gotten uglier and uglier over time. First Odom tanked the season and ultimately was sent home, to be paid for doing nothing. Second, he refused to alter his deadline, making him less valuable for Dallas as a much-needed trade commodity in the summer. Third, the trade exception that the Lakers got from Dallas when sending him here, was the tool that made Steve Nash available for them to sign. Finally, the pick Dallas sent, which was then sent to Houston in a deadline deal, was now used by Houston as a tool to land a player the Mavs would probably have wanted to sign.

For those wondering, OKC will get that pick when it's low in the first round (21st or worse), so the Mavs won't accidentally enrich the Thunder if they unexpectedly have a bad season. If the pick is 1-20, the Mavs keep it and it then slides to the next season, and that protection lasts for five more seasons, just in case.

8. Contractual numbers.

OKC was offering Harden a 4-year deal starting at about 12 to 12.5M and totaling around $55M. Instead, Harden will now get as much as $81.25M over 5 years.

It needs to be mentioned that, by rule, OKC wasn't able to offer 5 years to Harden, and by choice didn't want to start his deal at his max (which, based on the NBA's preliminary estimate of a $60M cap in 2013-14, would be about $14.13M).

9. What was the financial hurdle that kept OKC from affording Harden?

Clearly it came down to money. Doing a precise analysis of their future cap is challenging, because they have a lot of players who will be on options, or free agents. But in all likelihood, if OKC had Harden on a max deal, next summer they would have had a payroll of around $85M (not the $95M mentioned by Woj – we have no idea where he came up with that number, but it's wildly wrong). That $85M player payroll would have put them around $12.5M over the tax line, with a tax bill of about $22.5M (total player cost: $107.5M).

By comparison, if Harden had been willing to take their offer, their payroll would have been around $83M or so, and that tax bill would have been about $5M less (total player cost: $99.5M). And without Harden at all, and if they simply let Martin walk, their payroll drops to around $75M, with tax of about $4M or so (total player cost: $79M).

Apparently the difference between $107.5M and $99.5M (each year) was the straw that broke this camel's back.

10. Would OKC have been able to keep Harden under the old CBA's tax rules?

We can make that argument, and by the raw numbers, it would be accurate. Using the same payroll numbers as above, under the old CBA's tax rules, an $85M payroll next summer would have cost the Thunder only about $12.5M in tax, with a total player cost of about $97.5M. That's less than the $99.5M they were prepared to pay with the offer they made to Harden.

However, there's a good chance this was also an issue of "relative payroll structure" and "player worth" in the limits of their offer. OKC's final offer landed about halfway between the contract extension they gave to Ibaka and the one they gave to Westbrook, and the Thunder may have simply decided that this was the right amount for him to receive within the structure of the team and shared payroll sacrifice. If that's true, then the hangup that forced the trade was less about the CBA, and more about OKC and Harden differing on whether he was worth a "max deal."

But from Harden's point of view, Durant got a full max, Westbrook did too, and now it was his turn. It makes sense for him to feel that he deserves a max deal too, and to be unwilling to settle for less in that context.
11. Did Harden make the right move by declining to take a bit less – and accommodate the team – and thereby forcing a trade?

Only time will tell. But recent history offers us a mixed bag in assessing the future from this.

Almost 10 years ago, there was another "big 3" where two players had gotten their huge deal, and the third wanted his as well. Not getting it, with his team thinking he wasn't quite worth it, Steve Nash left Dallas and went elsewhere. In that case, he got the money he felt he merited, and he was worth it to the new team (Phoenix). On the other end, Dallas took a step back in the short run, but eventually went farther without Nash than they ever had gone with him, going to two Finals and winning one.

The following year, the same sort of situation again emerged, where the super-talented player couldn't get the giant deal because his team simply didn't feel they could afford another. In that case, Joe Johnson ended up in Atlanta. The Hawks got better and Johnson got huge money, but they were never as good as the team he left, the Suns. Meanwhile, the Suns continued to thrive but without him lost upside they never quite regained, and ultimately failed to get to an NBA Finals despite a run of dazzling potential. Would he have made the difference?

12. It was a trade that both teams made because they essentially had to. So, who won this trade?

In a way, both won. OKC felt they simply couldn't afford Harden's demands (see item 9-10 above) …and Houston had to get something out of those assets they had amassed.

But neither team really hit a home run for themselves. It's a drop in talent this season for OKC, at an inopportune time with them having a young team coming off a run to the Finals, and getting Harden for their assets is a far worse haul for Houston than they originally targeted (Dwight Howard).

13. Couldn't OKC have waited? Maybe they could have signed him later? Or maybe they could have kept him this season, made a playoff run, then traded him in the summer? In the worst case, they had the protection of restricted free agency, didn't they?

Yes, they did. But it didn't offer as much help as they needed.

First, once Harden passed October 31 without an extension, he was no longer eligible for a free-agency-avoiding extension. That means he would have been headed for free agency, and even though restricted (allowing OKC to match), they could have found themselves in the uncomfortable position of having to choose between matching the very max deal they didn't want to offer, or losing him for nothing. And in restricted free agency, once he signed an offer sheet, there would have been no "sign-and-trade" option to recoup assets.

In most ways, for OKC, it was now or never.

14. Was this a situation where OKC had to take steps to trade Harden, in order to avoid being the next victim of a "poison pill" contract (with the weird accounting rules) like the ones that cost Chicago the services of Asik and NY the services of Lin?
Not at all.

The poison pill situation only comes into play with players who have finished two years or less in the NBA.

But in a way, perhaps this was similar in the fact that – independent of the cap accounting issue - neither Chicago nor NY thought their players were worth as much as they were being asked to match. This is not a function of the new CBA, however, Teams have ALWAYS had the potential to be forced to choose between "lose your player" and "overpay" when a player is below the max level of value.

Overpaying by one team is a tool to get players – and it's interesting that Houston turned out to be the team offering all three of those contracts that were too rich for the old team, and landing new players.

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