Grading the Dwight Howard Deal, and Looking at What Comes Next

Thanks to Twitter, a trade not even 12 hours old is perhaps already old news.

Incoming: Dwight Howard, and all the irony that comes with him after the Dwightmare, dating back to 2011.

Outgoing: Timofey Mozgov, the 45th pick in the 2018 NBA draft, and a 2021 second round pick (no protections were released).  The deal, given cap machinations and over moves prior to when it can be made official on July 6, may look slightly different, but the above is likely the crux of the deal.

Overall, I give the deal a B+, but I note there are some risks lying beneath the benefits (those risks necessitate a non A range grade).

The 2019 salary picture: 

In short, this trade permits the Nets to open two max salary slots, depending on how they handle cap hold renunciations (you can only exceed the cap to retain your free agents for whom you maintain cap holds).

The Nets, in 2019-2020, could have the following salary cap structure, under the assumed $108 million cap:

-$30,872,745 in players under contract: Crabbe: $18,500,000 (if he opts in), Bust Stretch: $5,474,787, LeVert: $2,625,718 (assuming Nets exercise his option), Allen: $2,376,840 (assuming Nets exercise his option)

$34,275,004 in cap holds Nets may want to maintain: DLO ($21,059,095), RHJ ($7,411,071), Dinwiddie ($1,603,638); 2019 10 pick assumed ($4,201,200)

Cap Holds to renounce whether retaining players or not, due to excess salaries:  Carroll, Lin, Dwight

Other names “in the fray”: Harris, Whitehead, 2018 40th pick, other players added in 2018any “one year contract” players signed to round out 2018 roster

 

The benefits of the trade:

This is simple: the Nets washed Mozgov’s horrid $16.7 million in 2019-2020 off their cap.  That allows the Nets to do a ton in 2019 that they could not do before.  Want to sign stars? You have that much more cap room, potentially two max slots.  Want to trade for elite talent? The ability to eat contracts is huge.  Want to rent space for picks if you are not attracting stars? You can rent way more space now.

The only way the Nets lose out here on value is if they turn their newfound space into less value than pick 45 in the draft and a second rounder in 2021. That seems highly unlikely.

The goal of a rebuild is optionality: have as many options as possible to become good. This trade opens options up. If the roster disappoints and it is clear free agents will not be attracted, there is enough young talent left to tank, and a ton of cap space to eat assets and picks.  On the other hand, if the roster flourishes, there is enough cap space to pitch significant free agents on Brooklyn and surge upwards.

 

The risks of the trade: 

The main risk, really, is if the trade signals a required win now shift by ownership (a mandate to make a splash in 2019), or if Sean Marks’ eyes are bigger than his stomach, so to speak. There is clearly nothing wrong with the Nets pitching big free agents next summer.  As fans, we must hope that they still believe, and understand, that if they “strike out,” the worst thing they can do is pay B and C level free agents, to “save face.” The Nets should target a limited pool of prime free agents, and if that fails, become bargain hunters and rent space for assets.

Marks would be wise to apply his own past words in this regard, regarding his shift in 2017 from Otto Porter to the salary dump market.  As Marks said regarding the smart strategy shift, “we went after ONE guy. It wasn’t ‘hey, if we don’t get Otto Porter, we’re going to go after 50 different players and spend the money elsewhere.'”

Marks should take an identical tact in 2019.  Go after the stars.  If you strike out, don’t “go after B and C players and spend the money elsewhere.” Resort to salary dump for pick alternatives, like the Carroll move.

Color me as very optimistic that Marks will remain patient.

The second risk, it should be noted, is this trade makes a 2019 tank somewhat less likely.  However, Dwight did not add much to the bottom line in Charlotte, and likely will not in Brooklyn, from a win loss perspective.

 

So What’s Next

It must be noted that as of now, the Nets DO NOT have two max slots next summer, if the cap holds of DLO, RHJ, and Dinwiddie are all on their books next summer.  Cap holds stay on your books.  The Nets would need to trim about $16 million combined, from their contracts or holds, to open a second max slot.

LeVert and Allen cannot really be moved to open cap space; nor can the 10th pick. One way to open space could be trying to find a deal for Crabbe, similar to the Mozgov deal.  If Mozgov is tradeable (shoot, twice tradeable), Crabbe certainly is.

Another stealthy way? Working out a pre October 31 extension with DLO.  This is a gamble because it means the wagon is hitched to him, but if you extend him at, say a $16 million starting salary in 2019, that removes $5 million from your cap (because the actual salary would replace the hold).

Another way would be moving RHJ before the deadline, or this summer, for a 2018 draft pick (or a later year pick).  RHJ (and Dinwiddie) simply do not have the upside that DLO, LeVert, and Allen have.  The Nets would be remiss to pay RHJ and Dinwiddie their deserved marked value figures, because those figures will anchor their salary cap, in 2019 and beyond.  The last thing the Nets should want is non star players, like RHJ, Dinwiddie, and Joe Harris, eating space that can go to a star, and producing wins that blockade a tank.

Dealing RHJ and Dinwiddie for draft pick compensation (and Harris after reupping his deal), serves a clear purpose — it opens up options in the Nets’ rebuild. If DLO takes off, there is a ton of cap space to attract stars on the market.  If the market does not bear stars, the Nets would have the type of asset cache that they could use to deal for one.  And in the doomsday scenario, f DLO is not worth the squeeze and the Nets fail as a result, the picks acquired for RHJ, Dinwiddie, and Harris will help the Nets begin a tank from the bottom of the standings, with a surplus of assets.

RHJ, Dinwiddie, and Harris are simply not as valuable to the Nets as the combination of picks and cap space (by not paying them) that dealing them would provide.

 

Buckle up.  It should be a fun offseason.

 

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