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Brendan Haywood's Trade Exception

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D-Wreck said:
We're sending out more than that though. The Haywood contract is going to get used, which means that we will be spending that money one way or another.

Acquiring Joe Johnson instead of somebody else really only moves our cap number up about $5 million, and with the luxury tax is still a chunk of change, I get that. However, it's only a difference of $79 million if you're planning to cut Haywood and pocket that money.
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Only? That's the Indians payroll, a lot of money to some people...
 
I'mWithDan said:
Haywood is $0.....we don't pay him anything until August 1st. His contract is nothing, so you can't account for it in our total salary or tax payments because there is a 0% chance we hang on to him.

The only way you could try to mitigate the acquisition of Johnson is through the money we would pay J.R. So if we assume J.R. gets $5 million next season ($21 million in taxes) it would still cost us $10 million in salary and $43 million in additional taxes for Johnson, bringing the total cost of his acquisition down to $53 million.

That is still stupid to pay that for him.
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We are going to trade Haywood though, so the money is going to be spent one way or another. UNLESS you are just going to cut him, and pocket the money.

Let's say, hypothetically, we trade Haywood for player A, who is under contract for $8.5 million next year.

Varejao+Player A=$18.5 million
Joe Johnson=$24.9 million

That's your difference. About $6-7 million MAX added onto our cap number for this year. Next year, in fact, Joe Johnson would come off the books while Varejao wouldn't, which takes $10 million off our cap number, which is greater than the $6-7 million Johnson would add on for this year. With the tax line moving higher up next year, I can't say that we'd come out ahead in this deal, but it certainly wouldn't kill us financially.
 
Kbiz8288 said:
So, at this point, if we do not trade Haywood, he turns into a trade exception for us once the season starts, correct?
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No. Right now, Haywood has a salary value of $10.5M. The Cavs would have to pay him his salary unless he is waived by 8/1. To get a trade exception, you would have to trade him into a team that has tons of salary cap space. Any time you make a trade with a team, if you take back less salary than you send out, you get a trade exception worth an amount equal to the difference between the traded players

So, if you traded Haywood to Philadelphia and take back no player, you get the difference of the entire player's salary, in this case, $10.5M. Philadelphia would need some compensation for doing so, but in actuality, they could try to trade him to another team, or just waive him around 8/1 and essentially get back all the salary cap space they used to absorb him.
 
D-Wreck said:
We are going to trade Haywood though, so the money is going to be spent one way or another. UNLESS you are just going to cut him, and pocket the money.

Let's say, hypothetically, we trade Haywood for player A, who is under contract for $8.5 million next year.

Varejao+Player A=$18.5 million
Joe Johnson=$24.9 million

That's your difference. About $6-7 million MAX added onto our cap number for this year. Next year, in fact, Joe Johnson would come off the books while Varejao wouldn't, which takes $10 million off our cap number, which is greater than the $6-7 million Johnson would add on for this year. With the tax line moving higher up next year, I can't say that we'd come out ahead in this deal, but it certainly wouldn't kill us financially.
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Again, I think you're missing the math though because $1 this year is not equal to $1 next year. Every dollar we pay this year means we send out a minimum of $4.25 in taxes. Is removing Varejao nice? Sure but adding that additional salary really cannot be recouped.

Best case we're paying $7 million in additional salary and $30 million in taxes. That's the cost of Johnson vs. Player A (and keeping AV). It's still nearly $40 million dollars, no matter how you slice it. That's the minimum math gymnastics and it is still a $40 million dollar cost.

So how do we get that $40 million back? Even with him expiring? The cap jumps to a projected $90 million next year, with a tax line of $108. My guess is that is even higher with the increases this year.

We’ll carry some incremental increases and a raise for LeBron but that already alleviates our tax bill considerably, mitigating the benefit of moving Varejao for the sake of acquiring Johnson. Those savings could obviously be shifted to pay Mozgov but you’re going to struggle to recoup that $40 million spent on Johnson and that doesn’t consider the financial implications of re-signing him.

I think Gilbert is probably willing to absorb a huge tax bill for a youngish player under contract. I seriously doubt he’s truly willing to torch $40-50 million for someone like Joe Johnson.
 
Kbiz8288 said:
So, at this point, if we do not trade Haywood, he turns into a trade exception for us once the season starts, correct?
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Only if we give other teams assets to create one. The few teams with 10 million plus in cap space have no obligation to help us out, unless we give them something.
 
I'mWithDan said:
Again, I think you're missing the math though because $1 this year is not equal to $1 next year. Every dollar we pay this year means we send out a minimum of $4.25 in taxes. Is removing Varejao nice? Sure but adding that additional salary really cannot be recouped.

Best case we're paying $7 million in additional salary and $30 million in taxes. That's the cost of Johnson vs. Player A (and keeping AV). It's still nearly $40 million dollars, no matter how you slice it. That's the minimum math gymnastics and it is still a $40 million dollar cost.

So how do we get that $40 million back? Even with him expiring? The cap jumps to a projected $90 million next year, with a tax line of $108. My guess is that is even higher with the increases this year.

We’ll carry some incremental increases and a raise for LeBron but that already alleviates our tax bill considerably, mitigating the benefit of moving Varejao for the sake of acquiring Johnson. Those savings could obviously be shifted to pay Mozgov but you’re going to struggle to recoup that $40 million spent on Johnson and that doesn’t consider the financial implications of re-signing him.

I think Gilbert is probably willing to absorb a huge tax bill for a youngish player under contract. I seriously doubt he’s truly willing to torch $40-50 million for someone like Joe Johnson.
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I actually did mention in my post that the moving tax line meant that $1 this year is not the same as next year. However, we will still be over the tax line in all likelihood, and I don't think the move ends up costing us all the much long-term. That's probably why Brooklyn won't take Varejao, they'd rather just wait out the season with Joe, and then clear their books altogether.
 
Dr. Gymbo said:
No. Right now, Haywood has a salary value of $10.5M. The Cavs would have to pay him his salary unless he is waived by 8/1. To get a trade exception, you would have to trade him into a team that has tons of salary cap space. Any time you make a trade with a team, if you take back less salary than you send out, you get a trade exception worth an amount equal to the difference between the traded players

So, if you traded Haywood to Philadelphia and take back no player, you get the difference of the entire player's salary, in this case, $10.5M. Philadelphia would need some compensation for doing so, but in actuality, they could try to trade him to another team, or just waive him around 8/1 and essentially get back all the salary cap space they used to absorb him.
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So if he isn't moved this month, what options does that leave us?
 
I'm starting to think there are not any real good options out there. I just don't see any teams that are desperate for cap space/relief that have anything they'd be willing to give up and that we would want. Any players that might be available and that we would want could probably fetch more than just cap space.

At this point I'd be surprised if we got more than a TPE.
 
We could get a tpe via a team that owes us a favor. Maybe Timberwolves. We also could throw in Timberwolves 2nd rounder, Kaun, Macvan, Pointer, or Christmas to get that TPE.

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The difficulty is that any team we engage in a Haywood trade must have A.) player(s) we want and B.) one of the following criteria:

1.) Team wants cap space now. There are probably not many teams in this boat since most big name FAs are taken. Also, if a team is trying to make a play at free agents now, they are most likely contending and less likely to deal with us or want to get rid of valuable players.

2.) Team that wants cap space next year and targeted player(s) are under contract past next season. Expiring contracts have pretty much the same value as Haywood to a team that wants cap space next year (aside from the saving $ this year part).

3.) Team that wants to save money now. Problem here is that tax teams with high payrolls are more likely to be the teams contending with us for the title and will not likely want to deal with us. (Exception here is Brooklyn)

This makes finding a really good deal impossible at this point. Seems like with a lot of the names staying with their current team (i.e., Love, Gasol, etc.) there was a surplus of cap space and a shortage of free agents; therefore, the value in Haywood's contract fell.
 
Rimage said:
View: https://twitter.com/ZachLowe_NBA/status/619225276602560512

Those three's combined salary is $8,788,206. Could be part of a part of deal involving Haywood. Novak wouldn't be bad (JR BFF!), but PJIII hasn't shown to be much and we don't need DJ at all. OKC could be a potential third team in a deal.
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This could work through because DJ is a solid backup PG, he would have trade value to a team with a need there. So you could possibly flip Haywood for that and find a 3rd team - have to look for teams with wing depth that need a backup PG.

At minimum DJ would be a trade asset period and maybe you can extort a draft pick out of it.
 
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