Danny Granger Traded for Evan Turner and Lavoy Allen: Cap Ramifications FAQ

The trade deadline came and went with the Pacers deciding not to mess with the roster that had won 41 times in 54 tries…or so we thought.

Then this happened:

There will be plenty of questions about the basketball pluses and minuses, and Jonathan Washburn gives a good break down of how the on-court play will change. But there are also salary cap aspects to this move, so let’s discuss the CBA implications — which are always of great importance to the small-market Pacers.

So … What’s the Deal?

The Pacer acquired 6-foot-7-inch swingman Evan Turner and 6-foot-9-inch forward Lavoy Allen from Philadelphia in exchange for Danny Granger and a future second round pick. This trade put the Pacers at 16 players, so they also released second-year guard Orlando Johnson to get back to the 15-player roster maximum.

What does it mean to this year’s salary cap figure?

This move actually saves the Pacers a little bit of money. Per Shamsports, Danny Granger was scheduled to make just over $14.0 million this season, while the players coming back would receive combined $9.8 million (Turner $6.7 million, Allen $3.1 million).

However, the respective teams will only be responsible for the remaining portion of the season — about one third — so that $4.2 million full-season difference will net down to somewhere around $1.4 to $1.6 million savings for Indiana. This may not mean much to fans, but every dollar helps for the Pacers. It has the added bonus of almost tripling the cushion between their payroll and the $71.7 million tax threshold.

Orlando Johnson’s contract was guaranteed through the end of the year, so the Pacers will realize no savings on that.

What do the contracts of Evan Turner and Lavoy Allen look like in the future?

Both players’ contracts expire at the end of this season, meaning the Pacers have no commitment beyond that. However, the Pacers can make one or both “restricted” free agents by submitting qualifying offers to them this summer. “Restriction” on a free agent means that Indiana would be able to match any offer made by another team, should they so choose. It is a very useful option for a team to have, providing the rare combination of flexibility with a measure of security.

The qualifying offer for Evan Turner is a one-year deal at $8.7 million, while Lavoy Allen’s is one year at $3.8 million dollars.

It is important to note that these figures are not “cap” figures, until the player actually signs the qualifying offer. They can be rescinded by the team at any time and rarely are indicative of what the player will actually command for a contract.

Does this have any impact on the Pacers’ ability to re-sign Lance Stephenson this summer?

No. (For a refresher on the basics, please review The Lance Stephenson Contract FAQ.)

Since both the contract going out (Granger’s) and the contracts coming in (Turner’s and Allen’s) expire at the end of the season, there is no net change in the amount of room the Pacers are estimated to have next summer. There will be cap holds all around, but those only matter when trying to sign another team’s free agent. The Pacers will have full Bird rights on Stephenson and Turner (and Allen, as well, I believe.)

Again using Shamsports’ figures, here’s what it looks like.

summer 2014

The “Available for Lance” line is meant to give a maximum starting salary that would allow the Pacers to get a league minimum 13 players on the roster and stay under the currently estimated luxury tax threshold. This matters, because neither Larry Bird nor Herb Simon have ever deviated from their stated intentions to not pay luxury tax. (Never say never, but it is foolish to consider the Pacers paying the tax to be anything other than extremely unlikely.)

To move above the $6.8 million number, Indiana would have to make some hard choices. The right-hand column’s starting salary assumes that the Pacers release Luis Scola, whose contract is only partially guaranteed. Though it seems unpalatable, it is the fastest, easiest, and surest way to create the largest amount of breathing room.

Unfortunately, in a league where Tyreke Evans signed a 4-year, $44 million contract last summer, Stephenson’s next deal is looking too rich for the Pacers’ blood.

Other decisions that remain completely within Larry Bird’s control would be to avail themselves of the “stretch” provision and release players like Ian Mahinmi or Chris Copeland. This would allow Indiana to spread their remaining salary over two times the remaining years, plus one. This, however, creates less usable cap space (especially when netted against a minimum level replacement) and is very unlikely to be well-loved by Pacer owner Herb Simon.

Beyond that, space could be created through salary dumping trades, which are easier said than done, and often come with a pretty steep price. Mahinmi and/or Copeland are almost certainly players Bird would like to move, but they won’t have much of a market. After that, the most likely candidate is to try to deal George Hill for a cheaper alternative. As today’s move shows, this is a harsh business, but moving Hill is chopping awfully closely to the foundation of the current Pacer culture and success.

In any case, the range between $6.8 and $8.9 million means that the Pacers could offer a deal to Stephenson (or Turner or Allen) of up to five years and between $39 and $51 million total. This would average out to between $8 and $10 million per year for the player. The market for a player with a mercurial rise like Lance’s is impossible to judge. Unfortunately, in a league where Tyreke Evans signed a 4-year, $44 million contract last summer, Stephenson’s next deal is looking too rich for the Pacers’ blood.

Any chance of the Pacers keeping both Lance Stephenson and Evan Turner?

Theoretically? Yes.

Practically? No. Not worth exploring the theory, but we tried to sketch it out on the blackboard:

then-a-miracle-occursWas This a Good Deal?

For a deeper take on the basketball aspects of this deal, Jonathan Washburn breaks it down in detail and my 8p9s brethren give it the roundtable treatment. Here, we’re going to focus on the situation and the decision.

This trade — like all other Pacer decisions — will ultimately be judged in retrospect. The future “we” will use knowledge and experience that the current “we” simply do not (and cannot) have. While this is thoroughly understandable and expected, it is also somewhat unfair and of limited utility. From an operational discipline and improvement perspective, it is often more useful to judge the decision and the process based on the situation and knowledge as it existed at the time.

And from that perspective, I think what Larry Bird did today is technically impressive.

Bird wanted to try to improve his team without giving up too many assets or adding a single penny of salary to next season’s books. It remains to be seen if he actually achieved the former, but he certainly achieved the latter. Fortunately, achieving the former is far from a long shot.

The Pacers are still as free to pursue locking up Stephenson as Plan A as they were yesterday.

Evan Turner is a flawed player, and I don’t believe that he offers the potential positive impact that a healthy, productive Danny Granger could. However, we are unfortunately not dealing with a healthy, productive Danny Granger. The shoes being filled by Turner are still substantial, but they aren’t what they once were. Evan Turner doesn’t need to be better than the idea of Danny Granger, just the reality of him.

Also, consider that the role Turner is trying to fill here with the Pacers has been manned primarily by Sam Young, Gerald Green, Solomon Hill, Orlando Johnson, and Rasual Butler over the last two seasons. Chemistry and style concerns are not invalid, but it seems to me that Turner has a reasonably good chance at being an upgrade over what the team has gotten in his expected role.

However, it’s from a cap and flexibility perspective that I find this deal to be most attractive. As noted, this move was made without interfering with Lance Stephenson’s contract situation this summer. The Pacers are still as free to pursue locking up Stephenson as Plan A as they were yesterday.

But, today, they’ve actually improved their options. Coming into the day, the likelihood of the Pacers being unable to afford to match what the market would be offering Lance was growing daily. Hell, it still is. But, before, Plan B involved re-signing a diminished Danny Granger (assuming a deep discount over his prior deal) or trying to use part or all of their mid-level exception to find a replacement.

The Lance Stephenson decision is going to be as difficult as any in franchise history.

Today’s trade brings Plan B in the form of Evan Turner, with the added bonus of an audition for 28 regular season games and the playoffs. No one is drawing equivalence between Turner and Stephenson. However, there is a lot of value in the forward-thinking position Bird has put his franchise in today. When the moment of decision comes this July, the Pacers will be much better informed than otherwise.

The Pacer leadership made a very hard choice today in trading a player with deep ties to the organization. It’s but the first of many coming for them.

The Lance Stephenson decision is going to be as difficult as any in franchise history. It’s very realistic that the Pacers simply won’t be able to create enough room to afford keeping Stephenson. It’s also possible that — even if they could — they may look at the size of the contract and decide to let another team run with that particular set of scissors. It’s time for Pacer observers and fans to come to grips with those possibilities.

Judging from what Larry Bird did today, the Pacers already have.

Tags: Cap & Trade

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