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The Financial Impact of the Jason Terry Trade

Feb 7, 2014; Auburn Hills, MI, USA; Brooklyn Nets shooting guard Jason Terry (31) moves the ball in the first half against the Detroit Pistons at The Palace of Auburn Hills. Mandatory Credit: Rick Osentoski-USA TODAY Sports

In a move that may or may not have an impact on the court this season, the Houston Rockets acquired veteran guard Jason Terry and two second round picks from the Sacramento Kings in exchange for Alonzo Gee. According to ESPN, another non-guaranteed deal will be sent along with Gee. One of the second round picks is via the New York Knicks, according to Woj.

Josh Powell is non-guaranteed, so he could be the extra piece sent to Sacramento. This is pure speculation, but it would make sense. Then again, I’m pretty sure whoever the player ends up being won’t change the NBA landscape this season. That’s my hot take for the day.

Terry was sent to the Kings last season in a deal that brought Marcus Thorton to the Brooklyn Nets, but he never suited up for the Kings.

The cap is set at $63.065 million for 2014-2015, with the luxury tax threshold at $76.829 million. Gee is signed to a $3 million deal this season, although it is completely non-guaranteed. Without Terry’s $5.85 million on the books, the Kings will sit at $70 million in salaries if they choose to waive Gee. Keeping Gee won’t push the Kings over the tax, assuming they don’t make any more moves this offseason.

Terry will push Houston’s payroll to $66.79 million, so they will still be safely under the tax. His deal, which was initially given out by the Boston Celtics, is guaranteed. If you’d like to see the deeper details of their cap situations, you can see Sacramento’s here and Houston’s here over at Sham Sports.

One would believe that this means Houston has intentions of utilizing whatever he has left in the tank as a floor spacing shooter, but we also never know what Daryl Morey has up his sleeve. I can’t imagine Terry has a ton of value to be flipped somewhere else, but maybe his salary will help as a plug to make the numbers work in a future deal.

The move was essentially a salary dump for the Kings, and it’s a little curious that a team that won’t compete this year gave away two second round picks to dodge one year of Jason Terry. Second round picks typically aren’t game changers, but it’s a cheap access to cheap young players who could play a role. They’re also a solid asset in trades, particularly for teams looking to fill out a roster around a few max players.

Keep in mind, Houston recently just had some good luck with a second round pick named Chandler Parsons. It’s completely unrealistic to believe that they’ll strike gold like that again, but it’s worth noting.

It’s a relatively minor deal, as the tax and cap situations aren’t changed significantly for either side. Sacramento will save some salary and open a roster spot.

Terry might help Houston a bit, but it’s more likely that Kevin McHale turns to a youngster like Troy Daniels as his primary shooter off the bench. Isaiah Canaan will likely serve as Patrick Beverly’s lineup, so it’s realistic that Terry could slip to the team’s fifth guard.

The financial impact isn’t much, but the potential to watch a James Harden/Jason Terry defensive combination will have me on the edge of my seat.

Mark Evans

Mark is an accountant for PwC and a sad Boston Celtics fan. You can follow/tweet at him @JrMarkyMark

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