The reality of the James Harden deal in Cleveland

“We want to win as much as the fans do. No matter how long it takes, and no matter what it takes, we’re just going to keep going until we get there.”  – Cavaliers majority owner Dan Gilbert, October 30, 2012

At least one of the four Cleveland Cavaliers’ recent first-round draft selections will likely have to be traded. It won’t be for a while — preferably at least three years — and it will likely involve the Cavaliers receiving a concoction of hope and flexibility in return, but it will likely happen.

This reality came to a front just a few nights ago when the Oklahoma City Thunder were forced to part ways with shooting guard James Harden ¹ , receiving a veteran, a rookie and future draft selections in return. For a team that made the NBA Finals just four months earlier to deal one of their key players to a conference foe, all for the sake of the almighty dollar and long-term flexibility, speaks volumes to the heavy hand being placed on franchises by the collective bargaining agreement signed roughly one year ago — the luxury tax and the shortened contracts all aimed at increasing player movement, lessening the potential burden of a bad long-term contract.

Having extended forward Kevin Durant in the summer of 2010 and guard Russell Westbrook one year later, the Thunder tried to sign their star — still just 23 years of age, an Olympic gold medalist and the reigning Sixth Man of the Year – to a four-year contract worth $52 million. The maximum that the Thunder could offer Harden was four years for $60 as the lone five-year “designated” maximum deal afforded to NBA franchises within the new CBA went to Westbrook. The Houston Rockets, having not utilized theirs, had the capability to offer Harden considerably more ² . Compounding issues a bit was the fact that the deal agreed to by Westbrook was less than the maximum he could have demanded due to the desired flexibility to sign Harden a year later.

Heading into this summer, the Thunder were the model franchise, the one who managed to acquire flexibility and talent and put it all together as a home-grown juggernaut, rivaling all of the store-bought and back-channeled teams that the common fan has grown to loathe. But in the same summer that saw Dwight Howard travel across the country to join forces with Kobe Bryant and Steve Nash, the small-market Thunder are forced to take a slight step back ³ .

Circle back north to the lakefront city of Cleveland and general manager Chris Grant has a roster rife with rookie deals – the team’s starting five has three players earning their first-deal wages. Kyrie Irving is undoubtedly every bit of a star at age 20, his on-court theatrics rivaling their on-screen brethren, what with the scoring at ease and opponent humbling spin-moves. That said, with each dash, dish and (occasional) dunk administered by Irving, he is that much closer to the five-year maximum extension worth anywhere between 25 and 30 percent of the Cavaliers’ overall salary cap space ⁴ . 

So where does this leave Tristan Thompson, Dion Waiters and Tyler Zeller? If they do not perform to the level of maximum players, we enter into a completely different discussion — one where the Cavaliers are not perenailly competing for an NBA title as Irving would essentially be surrounded by lottery picks who became role players. At that point, cutting bait is not necessarily a bad thing, re-loading for years to come. But in the event that at least one or two of the aforementioned start to become what the team had hoped they would on draft night, they will,  at some point — potentially within the next two seasons — will have to decide who, if any of these players will deserve extensions and to what level. (My thoughts of Waiters becoming the next James Harden are well-documented by this point).

If they opt to circumvent the stated maximum contract in both length and amount, they will have access to only one five-year extension, similar to the one given to Westrook. Assuming this goes to Irving, the other three rookies, plus whomever the team ends up drafting this coming spring, will have to either take less than the maximum or opt to enter into restricted free agency, where, at that point, the Cavs front office could merely match whatever offer another franchise tossed their respective players’ way.

If we take a step back, let’s realize that the current NBA salary cap is set at $58 million. The current Cavaliers roster, comprised of rookie deals and veteran filler, slots in just over $54 million. While the luxury tax level is at $70 million, it is at this point where teams pay substantial penalties, something the Thunder were not willing to do, hence the $6 million difference between the max and the team’s final offer. Now juice up the current rookie deals into extensions, and you’ll see where things could start to get sticky for the Cavaliers in the event that their draftees turn into what they had envisioned. While the added flexibility is good, fans of the NBA saw what happened this past summer in the restricted market as Houston was able to poison pill an offer for Jeremy Lin, one that even the financially limitless New York Knicks were not willing to swallow.

The other option, natrually, is the one-year qualifying offer which leads to unrestricted free agency — that “un” having the potential to leave an empty feeling in the stomachs of many. On top of all of this, fans of the Cavaliers will have to take the latest words from team owner Dan Gilbert into heavy consideration. When discussing the handling of the LeBron James free agency, coupled with that of the Orlando Magic trading star center Dwight Howard, it appears that the business man’s philospohical beliefs have changed since the three-ring circus that culminated in The Decision.

“The big lesson was if a player is not willing to extend, no matter who they are, no matter where they are playing, no matter what kind of season you had, you can not risk going into a summer and having them leave in unrestricted free agency and get nothing back for it,” said Gilbert. “It’s not the player’s fault. That’s on ownership.”

So while the Thunder have played their cap space like a game of chess, drafting high-quality talent, quietly extending Durant, selling Westbrook on not taking the full maximum allowed, and allotting a four-year extension to the potential Defensive player of the Year in Serge Ibaka, even they have had to trade away two lottery selections — Jeff Green for Kendrick Perkins and, as noted, Harden — for pieces that, while not having as high of a short-term ceiling, allow the team to remain as financially flexible as possible. Otherwise, not only are we testing the Gilbert quote used in the header, but we wind up in a situation where a roster is increasingly more top-heavy, harkening back to the days where only additions can be made via whatever exemptions are available during a given summer.

Naturally, cycling maturing players into rookie deals is a great way to maintain flexibility and keeps teams from overpaying and over-committing to mid-level players. There will, however, come a point where Grant and his team have to start utilizing their basket full of future first-round draft selections to add players who will help sooner than later. Because if the team continues to plan for the distant future, some of the players obtained after years of hard-earned lottery selections will not even be in Cleveland to enjoy the scheduled  ride back to the top ⁵ .

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Image: Amy Sancetta, AP

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1. He of the sixth-highest win share in all of the NBA last season, ahead of players like Blake Griffin, Dwight Howard, Dwyane Wade, Dirk Nowitzki and teammate Russel Westbrook [back]
2. Which they did, to the tune of five years, $80 million [back]
3. This isn’t to say that I don’t believe that Oklahoma City got the better end of this deal from a big-picture standpoint — Martin and his expiring $12.9 million contract will undoubtedly help the spacing issues that were exploited by the Miami Heat, Jeremy Lamb will join Perry Jones III as one hell of a rookie class for the reinging Western Conference champions, and the draft considerations will help keep the pipeline flowing [back]
4. This depends on specific criteria which would have to be met in order to receive the larger sum — being a two-time All-Star, for instance [back]
5. By no means do I claim to be a salary cap expert. The new CBA is increasingly convoluted, but the above is written as to how I understand the contractual obligations to exist. I welcome all feedback and professional discussions surrounding any inaccuracies [back]