Why the Bulls didn't need to trade for Anthony Randolph
In last night's NBA draft, the Chicago Bulls made a move upwards. They traded the No. 16 and No. 19 picks, plus a future second round pick, in exchange for the No. 11 pick and Anthony Randolph from the Denver Nuggets. They then used that No. 11 to draft Doug McDermott from Creighton, whilst Denver used the No. 16 to take Jusuf Nurkic and the No. 19 to take Gary Harris. Not sure why Chicago did this, but they did this. It is already official.
The strangeness to the trade lies two fold. Firstly, it is clear they very highly value McDermott as a prospect, which I cannot agree with. And secondly, the inclusion of Randolph in the deal.
Randolph is under contract for one more season with a guaranteed $1,825,359 contract. It is not a very big contract, especially given that Randolph, his incredibly wartacious warts notwithstanding, has his uses as a bit-of-everything kind of player. But it is not a contract Denver wanted. It is they who insisted upon his inclusion. It is also not a contract Chicago wanted - they accepted Randolph, a very different thing to targeting him.
Most importantly, it is not a contract Minnesota and New York want. Both of those teams have already had Randolph, and yet let him go. New York traded him to Minnesota as a means of dumping Eddy Curry's contract, and Minnesota merely let him walk in free agency to Denver for the exact contract Chicago is now encumbered with. These two teams are of course relevant because they still play home to Carmelo Anthony and Kevin Love, the two players the Bulls are thought to be all in for.
They may still be all in, but Randolph's addition is likely going to be a minor inconvenience.
In its initial form, as a simple trade of No. 16 and No. 19 for No. 11, the deal was said to be a cap space saver for the Bulls. This was misleading for two reasons. Firstly, it assumes the Bulls will have cap space (which is possible but certainly not inevitable - they are capable of amnestying Boozer, but there needs to be a reason to do it). And secondly, the amount of cap space was remarkably trivial.
Before they are signed, first round draft picks have a cap hold equal to 100 percent of the rookie scale amount for that pick in that year. (Players generally sign for the maximum 120 percent of that amount, thus they are cheaper when unsigned, thus first rounds usually sign after any cap space dealing is done.) In 2014, the No. 11 pick has a cap hold of $1,898,300, while the No. 16 has a cap hold of $1,468,900 and the No. 19 of $1,266,000. That is from where the idea that the deal was a money saver came.
However, teams with cap space are charged a roster charge for each player below 12 they have on their roster. 'Players' hereby includes unsigned first round (but not second round) picks, unrenounced free agents, and does not include salary paid to waived players (i.e. Rip Hamilton). It is therefore a number the Bulls would fall short of. For the Bulls to have cap space, they will need to amnesty Carlos Boozer, inevitably waive the unguaranteed deals of Mike James, Louis Amundson and Ronnie Brewer, and have to renounce their free agent cap holds (Kirk Hinrich, D.J. Augustin, Jimmer Fredette, Nazr Mohammed, and the trio of Daequan Cook, Vladimir Radmanovic and Brian Scalabrine from previous seasons).
These moves would leave seven players under contract (Derrick Rose, Joakim Noah, Taj Gibson, Mike Dunleavy, Tony Snell, Jimmy Butler and Greg Smith), alongside two unsigned draft picks (McDermott and Nikola Mirotic), for a total of only nine players on the cap. It would be ten if they had the two picks instead of one - the trade, then, meant one roster charge would be in effect. Roster charges are equal to one rookie minimum salary, or $507,336 next season, meaning the trade pre-Randolphonly opened up a meagre $329,365 in cap space. And when that $507,336 is substituted for Randolph's $1,825,359, we see how the deal actually will cost them almost exactly $1 million in cap space.
Of course, this is not all about cap space. The prioritised pursuits of Love and Melo are likely to be done without it. Love would definitely be a trade, given that he is not a free agent, and Melo would likely need to be on account of Chicago not having enough cap room to meet the amount of money he just opted out of (and getting further away from it with Randolph's addition). Yet even here in trades, Randolph is something of a hindrance. Neither team wants Anthony Randolph, else they would not have gotten rid of him, and though he could have some value as filler and/or an expiring contract, he will be difficult to trade on account of technicalities.
It could be worse, though. There are ways around it. They cannot aggregate Randolph in trades, but they can still trade him.
There is a well known if misunderstood rule that on the surface counteracts this idea. The rule states that, for teams over the cap, players who are acquired by trade cannot be traded again for two months when their salary is being aggregated with others. On the surface, that makes trading Randolph again within two months difficult. Nevertheless, no CBA clause is innocuous, and the wording there makes a difference. The part after the word "months" there is important and is often misunderstood. And the bit before the word "players" is usually forgotten about on account of so rarely being relevant. Both matter here.
Start with the prefix. As seen, the Bulls have the opportunity to get under the salary cap. If they do so, they can still trade, and they can still trade big. Teams under the salary cap can make trades just as teams over the salary cap can - indeed, it is easier for them. They are not bound by the rules of salary matching, which apply only when trades are being made using the Traded Player Exception (which confusingly is simply the actual term for the exception that allows teams over the cap to make any trades, and not the thing it is more commonly misappropriated for). The only restriction teams under the cap have is that they cannot finish any trade more than $100,000 over the salary cap.
This means that a team with $14.9 million in cap space can receive a $15 million player in trade without sending out any salary, or trade out $7 million in salary and receive $22 million back, and so on. This means it is very possible for the Bulls to amnesty Boozer and use the space to incorporate Anthony's large salary, rather than trying to put Boozer in the deal to accommodate it. Considering the Knicks will not want Boozer, and the Bulls would therefore have to compensate them for taking him, this is possibly the percentage play if they are prepared to eat the money. (The downside to this is it costs the Bulls the non-taxpayer mid-level exception, their best chance at signing Nikola Mirotic. It is, however, a possibility.)
The suffix, too, is a situation that can be worked around. For the sake of simplicity, it is often stated that players received in trade cannot be traded again within two months if traded in conjunction with other players, but this is not the same as saying they cannot be traded if their salary is aggregated with that of other players. It normally is the same in practice, but not necessarily, and there are ways around it.
Salary aggregation is the act of putting multiple outgoing salaries together in the trade maths so as to be able to accommodate the incoming ones, i.e. in order to accord with the rules on salary matching. In an example whereby team A trades three players each earning a conveniently symmetrical $4 million to team B for a player earning $12 million, you can aggregate the first three player's salaries together to meet that $12 million, thereby matching his salary and making the trade possible.
However, the salary matching rules are not as staunch as they were. The specifics of what the rules are can be found in the answer to question 83 of Larry Coon's CBA FAQ - with that information at hand, it can be seen how team A could in fact just aggregate the salaries of two of those three players for a total of $8 million, which is within 150 percent of the $12 million team B's player earns, and thus is enough to make the trade for team B's player happen.
And they can still trade the third player without changing the deal any. This is the bit where it gets really confusing, given that it seems to defy logic.
Put as simply as possible, all parties to a trade can structure the trade how best suits them, depending upon their individual desires. Multiple parties to a trade can work the maths however bests suits them, regardless of how the other parties do it. And, for the purposes of meeting salary aggregation rules and creating (misnamed) traded player exceptions, this happens on pretty much every deal. As long as the trade works for both parties in accordance with the rules, exact structures can differ.
Returning to the previous example, and assuming team A and team B are both over the cap, we see this in action. From the perspective of team B, the trade is simple - they are trading a $12 million player for three $4 million ones, and that is that. For team A, however, they can work the trade thusly: two $4 million players aggregated for the $12 million player, and then the third $4 million for nothing. This is perfectly fine, and would further create a (misnamed) traded player exception for team A, on account of them trading $4 million for no returning salary. The salary they return is in the overall deal, accommodated by the aggregation elsewhere.
Most importantly to the Randolph example - by structuring the deal in that way, the $4 million player traded on his own would not be having his salary aggregated. And thus he could be traded again even if his over-the-cap team had received him via trade in the previous two months.
Let us take this mythical scenario and put it into a real one. A simplified and incredibly hypothetical real one, but one with real numbers. [For the purposes of this exercise, ignore the basketball side, and work only with the numbers.]
Let us say the Bulls do not amnesty Boozer, and instead use him as the crux for salary matching a Carmelo trade. They could create the following trade package - Boozer (earning $16,800,000 next season), Amundson ($1,310,286) and Randolph ($1,825,359). They could trade that package for a signed-and-traded Anthony with a new deal starting at his maximum value of $22,458,402 (equal to 105 percent of the salary in the last year of his previous contract).
Again, we are concerned only with the maths here. Willingly suspend any disbelief and pretend that scenario is plausible from a basketball perspective, even though it is clearly ridiculous.
From the Knicks's perspective, that is a simple three-for-one deal. But from the Bulls's perspective, they would do two deals. They would perform a simultaneous trade using the aggregated salaries of Boozer and Amundson - using their total combined aggregated outgoing salaries of $18,110,286, the Bulls could receive back a maximum of that amount plus $5 million, as long as doing so sees them finish under the luxury tax upon the completion of the trade (which realistically it would). This amount is larger than Carmelo's maximum of $22,458,402, and thus is enough to accommodate it. The Bulls could then trade Randolph's salary in a non-simultaneous trade for nothing, creating a TPE and managing to deal him in conjunction with other players without aggregating his salary. And thus the rule is bypassed.
As stated above, it is perfectly possible for the same trade to be different to both teams. Indeed, it is standard fare. As a real and recent example of how a player was re-traded within two months despite being traded in conjunction with someone else, see the deadline time trade of Steve Blake for MarShon Brooks and Kent Bazemore. It is confusing and convoluted, but Randolph is in the same situation as Brooks, and so is the remedy.
So there's some maths. Which is nice. There's a means to an end. There's a way to make it happen. There's a way to still trade for Carmelo Anthony with Anthony Randolph in the fold, and possibly even moving him in the process. But regardless of these workarounds, there should be nothing to work around. Randolph still need not be there.
Unless they value him as a player - and, really, there is no evidence for this - Chicago need not have Anthony Randolph on their books rights now. The Nuggets did not have as much leverage as the Bulls allowed them to have. A trade of No. 16 and No. 19 for No. 11 is a pretty big commitment in itself, but to add in a second round pick (however low it may be) and taking back a contract neither team wants is just excessive. When that contract is a potential hindrance to all the summertime plans, both via free agency and trade, plans that you have staked your franchise's future on, it is a problem.
It matters not if it is a problem that can be worked around like above. It is still an unnecessary one. Considering New York likely has no desire for Randolph as a player, and he is not useful for the purposes of salary aggregation, he is not a useful trade piece at all. He is therefore merely big man depth if you are an optimist, or a waste of cap space if you are a pessimist. And it is all for the rights to Doug McDermott.
Here's to the hope I am wrong about his projections.