Making The Hard Call
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James Harden got his max contract, the Thunder got its financial freedom, while the Spurs and Lakers got their best-in-the-West status back.
Everybody’s happy, right?
Such is life in the brave, new world, where playoff-minded teams are much more conscious now of stepping over that punishing 2013-14 luxury-tax line that inflates a payroll quickly.
Yahoo! Sports' Adrian Wojnarowski wrote an excellent behind-the-scenes piece on what went down with Harden, the Thunder and the Rockets.
If Harden was going to hold out for the $4 year, $60 million max contract instead of taking the 4-year, $54 million that was Sam Presti's final offer, the Thunder GM had to trade his shooting guard now to get top value on the return.
That had to become the Thunders' Plan A and Plan B once Serge Ibaka sacrificed millions to sign a 4 year, $49 million contract this summer. Once the Thunder had three players making $45-plus million annually starting next year, they had to sign Harden for less-than-max value.
If Oklahoma City gave Harden the max, the 2012-13 season would have been its peak performance, with diminishing returns in every following season because other players' contracts would have to be dealt annually.
Here, let me break down the Thunder's two options, as of last weekend …
SIGN JAMES HARDEN TO THE MAX CONTRACT
If Oklahoma City had done that, the small-market team would have seven players signed in 2013-14 at $76.7 million.
That's only half an NBA roster and already you're more than $6 million over the more punitive luxury-tax line.
The Thunder would have to amnesty Perkins' two remaining years at $18.6 million and bid farewell to their starting center.
OKC would have had to rely on Cole Aldrich and Hasheem Thabeet to play 30-plus minutes combined a night.
And, still, the Thunder would have to fill out the roster with minimum-type players, making the payroll an approximate $85 million.
If the luxury-tax line were $70 million, Oklahoma City would have to pay an unprecedented $28.75 million penalty for having an $85 million payroll. That's why Perkins would have to be cut loose.
So when you trim Perkins' $9 million salary annually, the Thunder's 14-man payroll in 2013-14 could be as low as $76 million, which would translate into a $9.25 million luxury-tax penalty and eventually total $17 million or so once you factor the post-waiver Perkins' amnesty costs.
That basically means the Thunder would become a non-profit organization, relying on four big-money players--Durant, Westbrook, Ibaka and Harden--and slowly dismissing every other role player on the team just to meet a payroll that keeps their head above water.
If the Thunder made $30 million in profit for the 2012-13 season, they would be lucky to make half that ever again with annual costs like this.
In 2014-15, only five Thunder players would have been signed to a $73.6 million payroll.
In 2015-16, only the four big-money Thunder players would have been signed to a $64.8 million payroll.
See what I mean?
The Oklahoma City players as you now them would have peaked as a team in the upcoming 2013 NBA Playoffs … and gone downhill every season thereafter.
That is not the way to run a winning organization.
If Harden had signed the contract that Presti wanted--a $13.5 million annual deal for four years--OKC would have had a high payroll the next two seasons, but in the following two years, it wouldn't have been so bad: $62.6 million in 2015-16 as the starting point when the luxury tax may be around $75 million.
The Thunder could bite the bullet for two years, but you cannot ask a franchise to pay heavy luxury taxes for the rest of the decade.
Not in Oklahoma City. Not in today's NBA.
TRADE JAMES HARDEN FOR ASSETS
Don't get me wrong.
I believe Harden is worth a max contract.
But when you have as much talent as OKC, you cannot sign everyone to a max deal and still contend in the years to come.
Tim Duncan, Manu Ginobili and Tony Parker all could have made more money for other franchises, but chose to sacrifice millions to stay together with the Spurs.
That's where Prestil learned his chops and saw the true value of selfless, sacrificing stars.
LeBron James, Dwyane Wade and Chris Bosh all sacrificed max deals to stay together and you see what that won them last season.
When Presti saw that Harden did not want to do what other champions did before him, the OKC general manager correctly decided it was best to take a step back this year so that they may take giant leaps forward in the future.
New Rocket acquistion Kevin Martin will hold down the shooting guard position for the 2012-13 season--along with incumbent Thabo Sefolosha--and likely leave when his $12.4 million contract expires this summer.
New Rocket rookie acquisition Jeremy Lamb, with a year's experience under his belt, will likely assume the Martin role in the 2013-14 season.
And armed with the Raptors' guaranteed-lottery first-round pick and the Mavericks' lottery-protected first-rounder, the Thunder will be getting progressively better in 2013-14 and 2014-15, when the Thunder most likely will be a championship contender once again.
So, in a nutshell, Harden gets his money, while the Thunder place their present championship-contending status on hold … and will likely resume its former status, possibly in the 2013-14 season.