Salary Cap Breakdown and Analysis for the Brooklyn Nets

By Preston Klaus

• Introduction:

The Nets recently traded for superstar James Harden on January 14, 2021. Since the trade, the Nets have been subpar in numerous defensive metrics, despite their amazing offensive numbers. NBA pundits have wondered if the Nets could have optimized this trade. In this paper, I will attempt to answer questions regarding the logistics of the trade, explain how the trade could have manipulated the salary cap rules, and offer some suggestion for the Nets moving forward.

The James Harden trade was a massive one involving three teams (later four when Houston subsequently flipped Caris LeVert for Victor Oladipo), four first round draft picks, four pick swaps, and seven players (later eight with inclusion of Oladipo). There were many salary cap hurdles the Nets had to jump over in order to make this trade a reality. First being in the middle of the season, the Nets could not go under the minimum of 12 players at any point in time. In addition, there was a question of how to match James Harden’s gargantuan $41,254,920 salary. Outside of Irving and Durant, the Nets had plenty of guys to do it—LeVert, Prince, Dinwiddie, Jordan, Allen were all making over $3,000,000. A few would become integral pieces in helping the contracts match. The Nets, however, didn’t have the luxury of flexibility that making this trade in the offseason would’ve afforded, where there is no minimum player limit. The Nets decided to trade a package consisting of LeVert, Prince, Allen, and Kurucs, and a bevy of pick swaps for James Harden. In the process, they struck the 12-player minimum, added over $50 million to their luxury tax bill, and relinquished team control of their first-round picks until 2028. The question of if this trade was worth it will not be answered within this paper; rather, we will look into the optimization of the Collective Bargaining Agreement (CBA), and analyzing the Nets’ options going forward. 

I believe the Nets attempted to make a trade in the offseason and were unable to get it done. As previously stated, it would have provided teams much more roster flexibility when trading players. The Nets positioned themselves to make this trade from the offseason. They traded pick 19 for Landry Shamet and Bruce Brown, even hoping the former could be offloaded for a first-round pick, or in substitute in a trade. Nonetheless, these players quietly bolstered the Nets’ bench in preparation of a trade that would surely deplete it. 

What was not anticipated, however, was the season-ending injury of Spencer Dinwiddie to start the season. While the Nets received offers as high as a first-round pick for Dinwiddie in previous trade deadlines, the season ending injury rendered his expiring salary’s value useless in trade talks as no team could use his services this season. Although he could be included as a salary filler and cut by the team that acquired him, the Nets didn’t really have much leverage to coax a team into taking on that contract without giving up draft capital, which was sent away in the trade, anyway. Dinwiddie may have been a valuable piece in this trade as a great sixth man on an expiring contract, if it was made before the injury. The Nets probably expected that they could not include DeAndre Jordan in this deal. While his contract is less than that of Prince and Dinwiddie’s at $10,000,000, they would have potentially opened a rift within the team’s fabric. In the 2019 offseason, the year the Nets signed Irving and Durant, both stars took a pay cut in order to spend more money for DeAndre Jordan. The Nets probably did this knowing the enormous talent of then-second year center, Jarrett Allen, but signed Jordan anyway in order to make their two new franchise centerpieces happy. Jarrett Allen, as we saw in the trade, looks to be collateral damage.

• Salary Cap Analysis:

The Nets’ relinquished $34,143,084 in salary within this trade to acquire a player making $41,254,920. How was this possible? Within the NBA CBA, a team over the salary cap can take on 125% of the total salary being sent out in a trade, plus $100,000. This means that the Nets could actually take on $42,778,847.50 in salary.

LeVert: $16,203,704

Prince: $12,250,000

Allen: $3,909,902

Kurucs: $1,780,152

Total: 34,143,084 x 1.25 = $42,778,847.50

While LeVert and Prince seem to be unavoidable inclusions, the question remains: Did they need to trade Jarrett Allen? Based on what the Rockets received—four first round picks, four pick swaps, and a legitimate Harden replacement, while going beneath the luxury tax—it begs the question. Since teams can only trade picks as far as 7 years down the line, the Nets were able to trade a total of only three of their own first round picks in ’22, ’24, and ‘26, as well as four pick swaps in ’21, ’23, ’25, and ‘27. To match the Rockets’ request of eight first round picks, they needed to acquire a first-round pick from another team, preferably without getting any salary in return. Jarrett Allen was not only able to fit into the Cavs’ trade exception (Jordan Clarkson trade), but they were willing to part with the extra first round pick that the Rockets coveted. Not to be looked over, the Cavaliers were also willing to trade a smaller expiring contract (Dante Exum) in order to save the Rockets from taking on Taurean Prince’s two-year deal and extra $2,650,000 this year, comparably between the two contracts. This allowed for the Rockets’ new owner Tillman Fertitta to avoid the luxury tax this season and for more flexibility this offseason. The only teams I found that had the capability of taking on that extra salary between Prince and Allen/Shamet, whether that be by trading a one-year contract back in return, or absorbing it in cap space, and could shell out a similar level first round pick were:

Thunder—They are currently $13,500,000 under the salary cap and looking to acquire more first round picks and probably would’ve demanded Jarrett Allen. They could have sent Darius Miller to the Rockets and taken on Taurean Prince.

Knicks—They had around $20 million in cap space at the time of the trade and already had Mitchell Robinson as a franchise center. Therefore, acquiring Allen would be overkill at that position. It is not completely out of the question to think the PG-needy Knicks could’ve traded a first round pick this year for Shamet and absorbed Prince’s contract. However, that option was probably pursued by the Nets and not taken by the Knicks.

Heat—They could have traded Meyers Leonard (who is making the same salary as Exum has a team option for next year that the Rockets could decline) and taken on Taurean Prince’s contract, and slotted Allen or Shamet into a trade exception (James Johnson). However, they would get dangerously close to the luxury tax, do not have a first round pick they can trade until 2025 and acquiring a two-year deal for Prince goes against their flexibility plan for 2021 NBA Free Agency.

Nuggets—This is possible, but the Nuggets most likely have little incentive to trade starting power forward Millsap’s expiring contract to take on Taurean Prince. Also, with the depth of their roster, they might not be looking to cut any players to take on an extra guy.

Also, if they included Landry Shamet instead of Jarrett Allen, they would have been short $750,892.50 on the trade.

Combined salary total if Shamet is swapped out for Allen: $32,323,222

Total salary match: $40,404,022.50 + $100,000

Salary Match: $40,504,022.50 - $41,254,920 = $750,892.50 short

If the Nets ended up getting a team to bite on this type of trade, they would’ve had to do some serious salary cap gymnastics to get the salaries to match, especially since they had no trade exceptions. Out of the four other teams that satisfy the Rockets’ demands, the Knicks are probably the only team that isn’t more inclined to trade for a center than a point guard. It is clear why the Nets decided to trade Jarrett Allen to the Cavaliers, even though it probably stung to trade a valuable young building block, if they could avoid it.

Knowing the Nets had to include Jarrett Allen, how could have the Nets optimized this deal in order to get the most out of it? Could they have manipulated the salary logistics of this trade to acquire more than just James Harden? If so, who would they target? The Nets have been linked to JaVale McGee who, conveniently, is on the Cleveland Cavaliers. If they valued acquiring a quality center, did the Nets had the assets to get a deal done? Yes and no. Consider if Shamet’s was added to the deal involving the four players originally included. This would increase the wiggle room up to acquire another player but would not quite be enough to acquire JaVale McGee.

Combined salary total if Shamet is included with Allen: $36,233,124

Total salary match: $36,233,124 x 1.25 = $45,291,405+ $100,000

Wiggle room: $45,291,405 - $41,254,920 = $4,136,485

The wiggle room falls short of McGee’s $4,200,000 salary for the season by $63,515, so now what? Here’s where the real salary cap hurdles come into play. The Nets need to maintain 12 players on the roster at all times, so they must add outgoing salary without subtracting players, which is hard to do when most of the rest of the roster is on minimum contracts. However, since the rule states that the Nets can take on 125% of outgoing salary, what is stopping them from including a minimum salary player to the Rockets in the hypothetical trade above for another player making the same amount or less in order to make up the $63,515 disparity? I don’t see any. Besides the obvious shock factor in trading 40% of your non-two-way player roster in one transaction, the Nets could’ve decided to make all hell break loose and have theoretically made the numbers work to acquire McGee in one massive 11-player trade.

Nets Players Making at or Near the Veteran Minimum Contract:

Bruce Brown: $1,663,861

Jeff Green: $1,620,564

Tyler Johnson: $1,620,564

Nicholas Claxton: $1,517,981

Timothe Luwawu-Cabarrot: $1,824,003 – partially guaranteed (cannot be included: his guarantee of $250,000 will be the cap hit in any trade and would not exceed any players on Houston’s roster)

If added to the hypothetical trade package of LeVert, Prince, Allen, Kurucs, and Shamet, these players would all create significant wiggle room in taking on more salary in this trade. To calculate this number, I will take the combined salary of all five players plus each of the four guys eligible, acting as the sixth player in the deal. After multiplying this value by 125%, I will subtract Harden’s salary, leaving us with the salary wiggle room to take on McGee and another player (to stay at the limit of 12).

Brown: $47,371,231.25 - $41,254,920 = $6,116,311.25 + $100,000 = $6,216,311.25

Green: $47,317,110 - $41,254,920 = $6,062,190 + $100,000 = $6,162,190

Johnson: $47,317,110 - $41,254,920 = $6,062,190 + $100,000 = $6,162,190

Claxton: $47,188,851.25 - $41,254,920 = $5,933,961.25 + 100,000 = $6,033,961.25

Subtracting the salary of McGee, here is the amount of money the Nets are able to take on for another player on the Rockets:

Brown: $2,016,311.25

Green: $1,962,190

Johnson: $1,962,190

Claxton: $1,833,961.25

Rockets Players Making at or Near the Veteran Minimum Contract:

DeMarcus Cousins: $2,331,593 (cap hit: $1,620,564, later waived)

David Nwaba: $1,824,003

Sterling Brown: $1,678,854

Chris Clemons: $1,517,981 (later waived)

Jae’Sean Tate: $1,445,697 (partial guarantee: $500,000)

Kenyon Martin: $898,310

All five of these players could have been acquired in this type of deal, even though the salary match for Nwaba just squeaks by because of the $100,000 wiggle room. If they decided to go this route, the Nets and Rockets may have traded Claxton and Clemons, respectively, as both players were out with injury at the time and because Clemons was later waived anyway. The Cavaliers would acquire Landry Shamet and give up JaVale McGee, still using their trade exception to absorb Shamet’s contract. Additional draft consideration may be included in this sort of deal, but in terms of the salary cap, this trade works if they chose to pursue it. This method could have been used to replace Shamet for Allen if they could find a suitor.

After making the James Harden trade, the Nets do have a few questions. They gave up a few core pieces, however, versatile defensive center Jarrett Allen, as previously mentioned, will be the hardest to replace. The Nets luckily have a few solutions for some of their roster spots. At the time of publication, the Nets have signed center Norvel Pelle, guard Iman Shumpert, guard Andre Roberson, and center Noah Vonleh to minimum contracts. They subsequently waived them all before their contracts became guaranteed to allow for roster flexibility. They later re-signed Roberson and Shumpert, as well as forward/center Tyler Cook to ten-day contracts. While their roster currently sits at 15 players with the three ten-days, the Nets are certainly not done making moves. Since Spencer Dinwiddie is out with a season-ending injury, the Nets were awarded a disabled player exception (DPE) worth $5,700,000. This can be used to acquire a player on the last year of his contract. Potential targets may address the center position via a trade, as well as other positions, if needed. Some players that they could acquire into this exception include:

Zach Collins: $5,406,255

Ed Davis: $5,005,350

Mike Scott: $5,005,350

Nerlens Noel: $5,000,000

Garrett Temple: $4,767,000

JaVale McGee (aforementioned): $4,200,000

Reggie Bullock: $4,200,000

Bismack Biyombo: $3,500,000

Tony Bradley: $3,542,060

I expect the Nets to target some of these players with their DPE as we approach the deadline. As the lineup starts to develop with DeAndre Jordan and Jeff Green primarily playing center, it will be interesting to see what position and skills the Nets prioritize with this exception. The Nets may look ahead towards the playoffs and plan to target a player better equipped to guard Giannis and Embiid, such as Collins or Noel, or may look for more shooting and defense with Bullock or Temple. 

Another possibility is the buyout market. It is unclear which players will actually get bought out by other teams before the buyout deadline. Some potential candidates for the Nets who may be available after a buyout are:

Blake Griffin (recently bought out)

Trevor Ariza

George Hill

PJ Tucker

Andre Drummond (if the Cavaliers cannot find a trade partner)

Gorgui Dieng

LaMarcus Aldridge

Brooklyn is a desirable destination for these new free agents after they clear waivers because of the big New York market and the chance to compete for a championship. There are fewer avenues for the Nets to go down in the buyout market. I expect these veterans to at least consider joining the team, if bought out.

• Conclusion:

The James Harden trade would have been better for both parties if it was made in the offseason. It provides more flexibility for how many players a team can carry on their active roster, saves players from in-season injuries, and gives the players time to gel in training camp. Alas, this trade was made mid-season, so options were limited in this regard. In the end, the Nets set themselves up to compete for a championship for seasons to come, even though they had to give up a ton of assets to do so.

Sources Used:

The Athletic NBA Staff. (2021, January 14). James Harden Trade Mega-Roundtable: Cap, Draft and On-The-Floor Implications. Retrieved February, 2021, from https://www.google.com/amp/s/theathletic.com/2322106/2021/01/14/james-harden-trade-mega-roundtable-cap-draft-and-on-the-floor-implications/%3famp

ESPN Database. (2021). Player Salaries - 2020-21. Retrieved February, 2021, from https://www.espn.com/nba/salaries

Freeman, D. (2019, April). NBA Salary Cap Exceptions. Retrieved February, 2021, from https://cbabreakdown.com/salary-cap-exceptions

NBA.com News Services. (2021, January 14). Nets acquire James Harden in blockbuster trade. Retrieved February, 2021, from https://www.nba.com/news/reports-nets-acquire-james-harden-trade

Spotrac. (1970, March 02). Spotrac.com. Retrieved February, 2021, from https://www.spotrac.com/

Image Sources are linked with each picture.

Thanks for reading! Feel free to contact Preston Klaus at [email protected] with any questions.