The Financial Implications of the Keith Bogans Trade(s)
On Thursday, the Cleveland Cavaliers shipped John Lucas III, Erik Murphy, Malcolm Thomas, Dwight Powell and two future second-round picks to the Boston Celtics in exchange for veteran guard Keith Bogans, ESPN.com’s Marc Stein reported. Two days later, Stein broke the news that Cleveland would send Bogans to the Philadelphia 76ers along with a future second-round pick.
As is often the case when ancillary players headline a trade, the deal was primarily motivated by financial factors on all sides. Here’s a look at what the trade meant for each team in terms of salary-cap and luxury-tax considerations. (Eat your heart out, trade exception fans.)
After trading Bogans for Murphy, Thomas, Lucas and Powell, the Celtics found themselves in a bit of a roster logjam.
Adding those four players put Boston’s roster total at 23, and that’s not counting Evan Turner, who has still yet to officially sign with the team. (He agreed in principle to a deal back in July.) Heading into training camp, squads can have a maximum of 20 players signed.
According to ESPN Boston’s Chris Forsberg, the Celtics started the roster purge by waiving the nonguaranteed contracts of Chris Johnson and Chris Babb. CSNNE.com’s A. Sherrod Blakely reported that the team plans on completing and announcing Turner’s signing before the start of training camp on Sept. 30, meaning the C’s must slash at least two more players in the coming days. Sources told Stein that Boston will next waive Lucas and Thomas, but “do plan to bring Murphy to camp.”
The Celtics must cut down their opening-day roster to 15, which presents a bit of a challenge, given that they’ll have 16 guaranteed contracts once Turner’s signing is complete. Training camp invitees Tim Frazier, Rodney McGruder and Christian Watford aren’t likely to make the cut, given that all three have fully nonguaranteed contracts, but beyond that, the final two cuts are more of a mystery.
With Rajon Rondo sidelined by a broken hand for the next 6-8 weeks, Phil Pressey likely can’t be waived, and Boston “intends to keep” Powell, per Stein. That makes Joel Anthony’s $3.8 million contract a potential trade or buyout candidate over the coming weeks.
Boston also acquired a $5.3 million trade exception in the Bogans swap, per Stein. (Danny Leroux went into the details of trade exceptions back in July.) However, with the Celtics hovering only a few million away from the luxury-tax line—they currently have nearly $72.4 million in guaranteed salary, per Basketball Insiders, not counting Turner’s yet-to-be-announced deal—Boston will likely keep that exception in its back pocket for now. (The Celtics lose the TPE if they go under the cap, which could mean some creative bookkeeping from Danny Ainge next summer.)
By adding Bogans’ $5.3 million nonguaranteed contract Thursday, the Cavaliers temporarily appeared in danger of exceeding the $76.8 million luxury-tax threshold this season. Turning around and trading him to Philly two days later helps assuage those concerns, especially if Ray Allen decides to continue his NBA career and join up with LeBron James once more.
With Bogans in tow, the Cavs would have had roughly $16 million in fully nonguaranteed contracts (along with Brendan Haywood’s $10.5 million) to dangle in trade discussions next summer. That had some analysts speculating about the prospect of a “Big Four” in Cleveland, as packaging Bogans and Haywood with a few future draft picks could have enticed a non-contender to offload a big-money contract.
Instead, the Cavs sent Bogans to Philly, creating a $5.3 million trade exception in the process. The exception can’t be combined with Haywood next summer, but according to Jason Lloyd of the Akron Beacon Journal, “the Cavs feel Haywood’s $10.5 million nonguaranteed contract by itself will be large enough to obtain any player they could realistically pursue.”
Grantland’s Zach Lowe echoed those sentiments in breaking the Bogans-to-Philly trade down on Saturday:
Cleveland can only use its trade exception to acquire players under contract—i.e., it can’t fling $5.3 million to convince Ray Allen to continue playing—but given the painful ramifications of repeat luxury-tax payers, that was enough reason to eschew the possibility of landing a $16 million star next summer via trade.
Leave it to Philadelphia 76ers general manager Sam Hinkie to turn an unwanted contract into a future second-round pick.
In exchange for taking Bogans and allowing Cleveland to create its $5.3 million trade exception, the Sixers received the Cavs’ 2018 second-rounder, according to a team release. Philly also sent a protected 2015 second-round pick to Cleveland to make the deal legal, and though the protections are unclear, there’s virtually zero chance that pick actually makes its way to the Cavs.
A league source told The Philadelphia Inquirer‘s Keith Pompey that the Sixers agreed to the deal to help facilitate Cleveland’s creation of the trade exception. As Hoop76’s Wesley Share wrote, Hinkie “utilizing his cap space to do small favors for other teams can only pad his reputation around the league,” especially given the ongoing furor about the Sixers’ blatant tankfest.
It remains to be seen whether the Sixers hold onto Bogans—the source told Pompey that the Sixers are “unsure if they would keep or cut” him. Keeping him would allow the team to inch closer to the salary floor, but as we’ve noted before, meeting that threshold is completely meaningless. (If they fail to do so by the final day of the regular season, they’ll simply distribute the shortfall among the players on the current roster.)
Basically, Hinkie did a solid for Cavs GM David Griffin to obtain a second-round pick and to help build his reputation as a willing dealmaker around the league. It’s a win-win for Philly, no matter whether Bogans stays on the roster or gets waived over the coming days.