Cavaliers shed Miller, Haywood salaries for massive trade exception
— -- The Deal
Cavaliers get: Cash considerations
Trail Blazers get: Forward Mike Miller, center Brendan Haywood, better of 2019 L.A. Lakers and Minnesota second-round picks, 2020 Cleveland second-round pick
Cleveland Cavaliers: A+
I'm a bit blown away by how well this trade worked out for the Cavaliers.
The expectation had been that Cleveland would need to send a couple of second-round picks to a team under the cap to take on Haywood's non-guaranteed contract and help the Cavaliers create a trade exception in the amount of Haywood's $10.5 million salary. ESPN.com's Brian Windhorst suggested this after Cleveland acquired a 2019 second-round pick originally belonging to the Lakers from the Indiana Pacers in exchange for the rights to 2015 second-round pick Rakeem Christmas last week.
Indeed, the Lakers' pick was involved in this trade -- Portland will get either that pick or a 2019 second-round pick from the Minnesota Timberwolves, whichever is better. But in addition to offloading Haywood's contract before it became guaranteed on Aug. 1, the Cavaliers also managed to shed Miller's guaranteed $2.85 million salary, a move with huge financial implications.
If Cleveland re-signs free agents Matthew Dellavedova, J.R. Smith and Tristan Thompson at salaries similar to their current cap holds (a combined $22 million and change), the Cavaliers' payroll would surpass $110 million, putting them in the luxury-tax bracket where teams pay an incredible $4.25 in tax for each additional dollar they spend. So Miller's $2.85 million salary was likely to actually cost Cleveland nearly $15 million this season, including tax payments. The Cavaliers may not actually save that much if they replace Miller with another player, and they do have to pay his $430,000 trade kicker (which does not count toward the tax), but filling his spot at the veterans minimum would still mean saving approximately $10 million.
Trading two semi-distant second-round picks to save $10 million would be good enough for Cleveland on its own, but the Haywood piece matters too. Because his contract would become guaranteed this week, the Cavaliers had to trade him now or be on the hook for dizzying amounts of money.
The trade exception the Cavaliers created isn't as valuable as Haywood's contract was while non-guaranteed since it can't be combined with other players and can't be used to take on additional salary above and beyond the amount of Haywood's contract, using matching rules. However, the upside of the trade exception is that Cleveland has a year to use it, meaning the front office can assess its needs during the season or even next summer instead of making a decision now. And using an exception doesn't require the other team to match salary, meaning the Cavaliers can acquire a smaller contract from a team over the cap.
It's easy for fans to overstate the value of trade exceptions. Most go unused, and trade exceptions may be less valuable than ever next summer because so many teams will have the ability to take on salary in trades using cap space. Still, there's zero downside for the Cavaliers to having the exception. They don't pay anything and don't have to use it. And given the limitations on Cleveland adding talent as a taxpaying team, a massive trade exception remains a unique opportunity to improve what is already a championship contender.
Portland Trail Blazers: B
While this trade is an obvious win for the Cavaliers, that doesn't make it a loss for the Blazers. Though I'm surprised Portland wasn't able to extract more in return, the Blazers really gave up almost nothing except cash to make this trade happen.
Portland will simply waive Haywood before his contract becomes guaranteed. And while the Blazers will be on the hook for Miller's 2015-16 salary -- an amount that may be reduced if they're able to agree with him on a buyout, allowing Miller to play for a contending team -- Portland is still some $20 million below the salary cap. More importantly, the Blazers remain about $13 million below the league's salary floor (90 percent of the cap), the minimum that teams are required to pay their players. Teams that don't reach the floor pay the difference to the players on the roster. So Portland would have paid whatever money goes to Miller no matter what.
Essentially, then, the Blazers got a couple of second-round picks for free. Expect more such deals from Portland and the Philadelphia 76ers, the two teams still shy of the salary floor. Competition between them to take on salary may create a seller's market for other teams offloading bad contracts.
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