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Cap Talk: The impact of the Jerami Grant Trade and the draft on free agency

6/24/2022

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We are through the NBA Draft and have already seen a flurry of activity around the league. In this edition of Cap Talk, I want to dive into some of the major trades that have taken place, along with a look at the free agents who were the most heavily impacted by the NBA draft. First off, let's take a deeper look into the Jerami Grant to Portland trade, why it happened when it did, and how that sets the table for the rest of the offseason for both Detroit and Portland.
Transactions
Trade: Portland Receives Jerami Grant, second round pick; Detroit receives 2025 MIL 1st top 4 protected, 2 seconds
This was a deal that was highly speculated around for a while, but Detroit finally ships out Jerami Grant and gets a future first for him. At first glance, this return for a player of Grant's talents doesn't seem great, but a closer look at the transaction reveals why this ended up being the best deal Detroit was offered. For starters from Portland's perspective, Grant is heading into the last year of his deal and will become an unrestricted free agent after the 2022-2023 season. However, he will be eligible for a 4 year, $112.6 million extension this offseason. It would seem a fait accompli that Portland would offer him this extension after having given up assets to bring him in. That deal plus potential deals for Nurkic and Simons this offseason, along with the $45.6 million due to Damian Lillard would put the Trail Blazers on the path to being a luxury tax team in 2023-2024.

From Detroit's mindset, Portland offered them something that none of the other Jerami Grant suitors really could, and that's more cap flexibility. Because Portland had a traded player exception (TPE) that Grant's salary could fit right into, there was no need for the Pistons to take back any bad matching salary. This allowed the Pistons to send him out for just the 2025 MIL first and two seconds, while creating their own TPE for his outgoing salary. They then were able to take that 2025 MIL first they received and flip that into Jalen Duren during the draft, while taking back Kemba Walker into that TPE that was created in a salary dump by the Knicks. The timing on the Grant deal happening before the draft was important to Detroit because the Pistons would not have been able to take back Walker before July 1, thus not being able to trade for Duren. Now, Detroit heads into free agency armed with up to $42.5 million in cap space and two new draft picks in Jaden Ivey and Jalen Duren. This gives them a lot of optionality on what they can do with that space. They could go after restricted free agents that could fit their timeline in Miles Bridges, DeAndre Ayton, or Anfernee Simons (Portland helping Detroit open up space to go after Simons would not be ideal). Or they could continue to take on bad salary for draft capital (think Gordon Hayward, Evan Fournier/Alec Burks, Tobias Harris, or Russell Westbrook). Either way, they could be a key player in some of the potential fireworks that could be taking place this offseason. 

Trade: Philadelphia 76ers Receive De'Anthony Melton; Memphis Grizzlies Receive Danny Green, David Roddy (23rd Pick)
This deal was surprising in the moment it happened but makes a lot of sense for both teams. the Sixers add a win-now rotation player that fits well around Embiid and Harden. However, this move would seem to take them out of the PJ Tucker sweepstakes, as they would be limited to the Taxpayer Mid-Level Exception (TMLE) and Tucker is reportedly going to be having offers in the full Non-Taxpayer Mid-Level Exception (NTMLE) range. Philadelphia could always make other moves to shed salary and gain access to the full NTMLE.

For Memphis, they lose a rotation player but are able to reset the clock on another rookie scale contract, which is important with a max extension coming up for Ja Morant, and possible extensions for Brandon Clarke and Desmond Bane on the horizon. As their roster starts to get more and more expensive, it will be useful to have rookie-scale contributors on the roster, which is what Memphis is hoping David Roddy will be. This could also signal that the team is likely to bring back Tyus Jones. 

Upcoming Free Agents Most Impacted By The Draft
Lonnie Walker IV:
The Spurs took two combo guards in the 2022 NBA Draft, Malaki Branham and Blake Wesley, effectively ending Walker IVs tenure in San Antonio. Without his cap hold on the books, the Spurs could carve up to $32 million in cap space.

Marvin Bagley III: Detroit trading for Jalen Duren with the presence of Isaiah Stewart and Kelly Olynyk under contract for next year doesn't bode well for a return back to the Pistons for Bagley III. 

Kyle Anderson: Memphis trading up for Jake LaRavia and trading Melton for David Roddy makes me think that Anderson's time as a Grizzly has come to an end. He could be a candidate for the NTMLE from a bunch of teams.

TJ Warren: Indiana drafting both Bennedict Mathurin and Kendall Brown, along with the impending rebuild, suggest that Warren will be on another team come the 2022-2023 season.

Jonathan Isaac and Jae'Sean Tate: Not free agents, but with Orlando taking Paolo Banchero first overall and Houston taking Jabari Smith and Tari Eason in the first round, both these players could be on the move this season. Playoff contenders should take a look at prying these guys from their respective teams, especially in Tate's case as he is still on a minimum deal. 


1 Comment
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1/2/2024 05:50:45 am

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    Nick Thoreson is a young professional working in finance who is passionate about the NBA and especially all things salary cap related.

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