Why Buying Out Deron Made Sense, and What Comes Next

In a big piece of news, David Aldridge of NBA.com broke a huge story on Friday.  The Nets negotiated a buyout of Deron Williams’ contract.  With the buyout, Deron will make $5.5 million per season from the Nets from now through the 2019-2010 season, while playing elsewhere.  The move made absolute sense for Brooklyn.

As an aside, in analyzing the move, I will not be looking at the luxury tax implications for the Nets.  As far as I am concerned, whether this move saved the Nets $61 million next season (which it did), didn’t save a penny, or saw the Nets lose money, I believe the move was smart, relative to where the Nets are on the arc of contention in light of their cap situation.  In addition, in analyzing the move, I am doing so without considering what could have been had the Nets cut the chord earlier (i.e.: the Lin-Asik rumors, the Deron-Plumlee to SAC rumors).  I am analyzing the move under the following hypothetical: what should one have done as Nets GM assuming he was hired in in June, 2015 when this offseason began.

Explaining the Move

Coming into this offseason, the Nets knew they would not have any cap space to upgrade the roster this summer. By resigning Brook Lopez and Thaddeus Young, the Nets had a near $100 million payroll, with the cap at $70 million: adding key talent this summer is, and always was, not an option.

With that, the goal for the Nets always should have been clear: build, or start building, a legitimate contender in 2016.  There was no way to do that this summer, not with no cap space, no lottery picks, AND no assets that could fetch foundational players in trades. In that regard, once the Nets resigned Lopez and Young (which was smart, they are not superstars but are good to very good players that can be part of a very nice core), they were looking at the following salaries on their books going into 2016 (with their draft picks signed at 120% of the rookie scale, as they have been):
-Lopez: $21,165,675                                         -Young: $12,078,652
-Bogdanovic: $3,573,020                               -Hollis-Jefferson: $1,395,600
-McCullough: $1,191,480                               -Deron: $22,131,135
-Jack: $500,000 of his $6,300,000 is guaranteed even if the Nets dumped him
TOTAL: $62,035,562. With a projected $89,000,000 salary cap that would yield $26,964,438 in cap space to build around the above players. While Larkin, Ellington, and Robinson have small player options in the $1 million to $1.5 million range, players at that level most typically opt out and all 3 player options would only add about $4.1 million to the payroll, if exercised.

Those numbers make it clear: regarding building in 2016 and beyond, Deron was the only bad contract on the roster. Other players on the roster are either paid reasonably in 2016-2017, or are overpaid but expire after the 2015-2016 season: if there was a player to move to boost the team’s chances in 2016-2017, Deron was that player.  

$26,964,438 may sound like a lot of cap space, but it is not the type of space that one would think at first blush.  A max contract with the cap at $89 million ranges from $22,25-$31.15 million, depending on the player’s service time.  And look at some of the contracts that went out this summer.  As a sampling of the market across positions, Brandon Knight, Wesley Matthews, DeMarre Carroll, Khris Middleton, Greg Monroe, and Robin Lopez all got between $13.5 and $17.5 million per season. All are good players. None are very good, great, or anything close to foundational.  Yet a player of that caliber would have absorbed most of Brooklyn’s cap space.

With Deron waived? Now, the Nets have an additional $16,631,135 in cap space in the summer of 2016, for a prospective total of $43,595,573 in space (pending the 3 above player options).  The value of that prospective space is simply too good to pass up for Deron’s production.

It is true that dumping Deron hurts the 2015 Nets on court product.  From a pure production perspective, ignoring salaries, expectations, or assets traded to get a player and make him happy, Deron was the best point guard on the Nets in 2014-2015, and figured to be so in 2015-2016.  He is a smarter player than Jack, a better passer, and a player who produced more than Jack, in terms of on court-off court numbers.

However, the reality of the situation is the Nets had a point guard who essentially averaged 13 and 6 on 38% shooting, was trending downwards, and who was sucking up $22 million plus in  cap space going forward.  The ability to wash 75.2% of that figure off the cap had to be taken.  Realistically, how many wins next season did dumping Deron cost the Nets: five? Five wins next season are worth nothing compared to an extra $16,631,135 in cap space, and all the avenues that can open.

It is true that opening up all this extra cap space is by no means a flawless plan, and maybe not even a good one: but it is the best plan available.  There are only 3 ways to get players: free agency, and the draft and via trade.  The draft? The Nets do not pick in 2016 and 2018, and swap picks with Boston in 2017: that means no lottery picks for four years unless the Celtics miss the 2017 playoffs.  The trade market?  The Nets do not have an asset worth trading a star player for. The teams vying for Kevin Love were rumored to have offered Klay Thompson or Andrew Wiggins last summer.  The Nets young pieces are nice high character pieces, but none have the projected developmental arc of the youth that typically gets dealt for star talent.

That leaves free agency – a place where everyone’s money is equally green – as the Nets best chance of doing something dramatic.  Sure, there are factors that will weigh decisively against Brooklyn on the market.  Over the past several years (although for whatever reason, it has only become a media topic this year), good players have showed that in free agency, their priority is to join other good players so they can win…not to go to a “big market.”  LaMarcus Aldridge and Greg Monroe spurned Los Angeles and New York for San Antonio and Milwaukee.  The Lakers and Knicks had a hard time getting players to take their money, and resorted to plan B’s when they could not nail stars.  San Antonio and Cleveland signed the two best free agents: neither screams “stars flock to big markets.”  And in 2016 as is always the case, there will be more teams with money to spend than players worth spending it on.

But the chance a star (or a group of good players) take the Nets’ free agency money is better than the chance of drafting such players without lottery picks, or trading for such players without the assets to actually do so.  A mediocre plan (which free agency is) beats a hopeless plan.  And the Nets do have one advantage over the Knicks and Lakers: they should be better next year than those teams were last year.

The Nets still have Lopez, Young, Johnson, and Bogdanovic.  Add Hollis-Jefferson, Jack, Brown, Ellington, and their depth at point guard, and while the Nets are certainly not a title contender, the team should have a chance to compete for a playoff spot in the eastern conference. 30-40 wins seem reasonable, and to a free agent, there is a big difference between joining a team that wins 35 games, and a team that wins 15-25.  A 15-25 win team: how can you see the vision of what it can become. A 35 win team in the east? It is not hard to feel that you can help that near contention in the east team take that next step, and that you can do that by joining the core.  It is not hard to see the Nets bigs and wings and feel you can be the guard to take it to the next level.

Why the Counterarguments to the Move Don’t Make Sense

 

Perhaps the Nets could have said “let’s wait for next summer to execute a buyout.” That would have enabled the Nets to benefit from Deron’s play in 2015-2016, all the while procuring the benefits of taking his 2016-2017 money off the payroll.

But that is a huge risk.  What if Deron enjoyed this season in Brooklyn?  Times change and people change; Deron after all once chose Brooklyn over Dallas, and Aldridge went from wanting to be a Blazer for life to meeting with every team under the sun in an effort to leave.  Deron may have decided after 2015-2016 that he enjoyed his year enough that the $22,131,135 player option in his lap (which the Nets had no power to stop him from exercising) was too sweet to pass up.  The buyout could not be done without Deron’s willingness, and if the Nets waited a year to do it, that willingness may have disappeared.  Billy King and Mark Cuban will not admit it, but Dallas may not have seen Deron as an option next summer the way they do now, reeling from DeAndre Jordan’s about face.   This was a perfect storm and the Nets had to strike when the iron was hot. The result: only slightly (in all likelihood) worsening this year’s team to open up their future cap sheet for free agency, was a very good one, and foregoing it to attempt to secure a great result in 12 months would have been a huge risk not worth taking.

Perhaps the Nets could have said “let’s try to trade him for value”; it surely bothers some that the Nets have literally gotten nothing for Deron.  But in a basketball world built around a salary cap, nothing is better than a net negative.  Nobody wanted Deron Williams. The Nets were not going to be able to trade him without taking dead money in return, or potentially dealing more young pieces just to entice a taker.  Suppose a deal like the rumored Sacramento Kings deal of December (subbing Hollis-Jefferson in for Plumlee) was on the table as the best offer the Nets could take — it is unlikely they could have done anything better.  The Nets would have been forced to add dead money to their future payroll in Jason Thompson, semi dead money in Darren Collison (an upper class reserve point guard and not much else), and all the while would have done this while losing a potential future core piece.  That is less advantageous than having more future flexibility, and that represents a best case scenario type of deal.  In all likelihood, the only available deals to Brooklyn, if any, featured them swallowing dead money and dumping assets to dump Deron: what they did beats that.

Another school of thought was that if Deron was unhappy, the Nets should have made him suffer by forcing him to stay with the team.  That type of vindictiveness is a waste.  Like any other transaction, in handling Deron, the Nets needed to ask themselves one question: what is best for the Nets?  If it was best for the Nets to give Deron a paid vacation at the resort of his dreams and a spot on the Warriors where he could win a title, that would be the call to make.  If it was best for the Nets to send Deron to the Sixers with the requirement that he must listen to a Paul Pierce Deron diss track on a daily basis, that would be the call to make.  The Nets need to do for the Nets, regardless of what that means for Deron Williams.  Not cut their nose to spite their face by defiantly saying “he’s not happy let him rot”!

 

SO WHAT IS NEXT IN BROOKLYN

The short answer? Scouring the free agent market for value additions (particularly at center), and seeing what they can fetch on the trade market for Blake, as their nonguaranteed contracts (which are their easiest pieces to move, from the pieces which make sense to move).

At this point, it comes down to edgework in building the Nets roster, which for 2015-2016 is largely built.  The Nets have 17 players; 12 guaranteed and 5 nonguaranteed (you get to carry 20 during the offseason, but must trim to 15 by opening night, so decisions will be made), with a depth chart as follows (their lone unsigned free agent is Jerome Jordan, so they do have a decision to make as to him):

1: Jack, Blake, Larkin, Boatwright (non-gtd)
2: Bogdanovic, Markel (non-gtd), Karasev
3: Joe, RHJ, Ellington
4: Thad, Robinson, Reed (non-gtd), Clark (non-gtd), McCullough
5: Brook, Jefferson (non-gtd)

The Nets could see what they can add on the free agency market, but would only have the minimum to spend. They should not spend beyond the minimum, because if they spend more than $3.4 million and dip into the non-taxpayer midlevel exception (and in Larkin and Ellington, they used $3 million already) they will become hard capped at $88.7 million, which would limit the Nets when constructing deals that may arise during the year.

The Nets could explore what a minimum salary would get them, and could add up to 3 players. Jeff Withey is a physical center, and his former Pelicans have paid numerous other bigs this summer. Ekpe Udoh was once a lottery pick. Darrell Arthur is still out there.  The Wizards restocked their wings and Rasual Butler may be obtainable (and can shoot the ball). Henry Sims is a reserve big that can score. Chuck Hayes is a bruiser inside.

Other than that, the Nets can explore the trade market, although their options will be limited.  For starters, Willie Reed, Ryan Boatright, Shane Larkin, Thomas Robinson, and Wayne Ellington cannot be dealt preseason.  Markel Brown, Rondae Hollis-Jefferson, Chris McCullough, Bojan Bogdanovic, Brook Lopez, and Thaddeus Young are seen as core or potential core pieces.

That leaves trades involving Cory Jefferson, Earl Clark, Joe Johnson, Jarrett Jack, Steve Blake, and Sergey Karasev for exploration.  Jefferson and Clark on nonguaranteed deals are readily movable.  If neither figures to make the roster (they could be the two pieces being cut), it may be worthwhile to turn either into a reserve center or future second round pick.

Karasev has little value given his knee injury. Regarding Johnson, with the Nets having avoided the tax, there is no reason to trade him unless they get a better player or mid first rounder.  It seems unlikely a team would give the Nets $25 million in better talent, or a pick that high.

That leaves Jack and Blake, given the glut of point guards and goal of getting playing time for Larkin and Boatwright.  Coach Hollins has taken a liking to Jack, but Jack almost netted a first round pick swap last year, and perhaps a similar deal is available next season.  Blake is a heady, high character player who can shoot the ball, but has lost a step, and at 35 going on 36, clearly is not factoring into the team’s future plans.  And as he is making just $2.17 million, Blake is readily movable. With multiple point guards, the Nets could ship him out of town for a nonguaranteed contract to open flexibility to add a center, or a second rounder.

Times are changing for the Nets.  Deron Williams is finally gone, and in one year, the Nets will have something they have not had since his the end of the Dwightmare: options.

 

 

 

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