BY: mATTHEW eMERY
It’s no surprise that New York Knicks shooting guard Courtney Lee is available on the trade market. He has yet to make his debut this season, and it seems unlikely, as Coach Fizdale appears to be more focused on developing the team’s youth. Assuming he returns to full health, Lee is still a serviceable player that could contribute off the bench for a playoff team. He averaged 12 p.p.g. last season on 45.4% shooting. He also shot the three ball well at 40.6%. He would be a solid 3&D player for a playoff team that needs some scoring punch off the bench. However, he is overpaid at $12 million a year. Lee’s value at this point is probably something closer to the mid-level exception which varies between $4 million and $8 million, depending on the season and team’s cap position.
However, given the remaining years/value on Lee’s contract, it has been difficult for the Knicks to move him. In the summer of 2016, Lee signed a 4 year/$48 million contract. He was 30 at the time and likely got that contract because of the $24 million cap spike that season. Teams spent a lot of, if not too much, money that summer (see Bismack Biyombo’s and Ian Mahinmi’s contracts). Currently, Lee is owed approximately $25 million over the next two seasons. As I said earlier, Lee is a good player, but he falls into the category of middle of the road players and it’s difficult for a front office to justify paying Lee more than seven figures.
Lee was eligible to sign a contract that summer for up to 30% of the salary cap over four seasons ($121,444,470/4 years). Given Lee’s age at that time, the Knicks may have (or at least should have) insisted that his contract decrease by 5% each season, front loading his contract so as to make it more tradeable with time. Once Lee’s contract is up in 2020, he’ll qualify for 35% of the salary cap, but quite frankly he’ll be lucky if he receives a minimum contract.
The Knicks Cap Situation
Currently, the Knicks have the potential to create approximately $54 million in cap space next summer if they renounce all cap holds and non-guaranteed contracts (see Jeff Seigel’s Early Bird Rights for the best cap sheets in the business). Unfortunately, the Knicks will likely not have that much to spend because they will probably not renounce Porzingis’s cap hold (among others). Of course, they may renounce him if it gives them a chance to sign Durant, but they then lose their ability to sign him to an exception. If the team does not renounce his rights, then it may resign Porzingis using their bird rights (provided that he is indeed healthy, which is a legitimate concern). I note that Porzingis will not qualify for the 5 year 30% max criteria, so his maximum salary is 25% of the cap.
In essence, the more cap space the team can clear now (i.e. trading Lee’s contract for an expiring), the less tough decisions they’ll be forced to make in deciding which free agent cap holds to renounce next summer. Ideally, the Knicks want the ability to create about $40 million in cap space to next summer to get a max free agent. You’ll notice that almost every trade proposal below creates that or more potential cap space.
Proposed Trade 1: Courtney Lee to the Orlando Magic for Evan Fournier
The rationale for this trade may not be apparent, but it makes sense. The Orlando Magic have been off to a slow start, and it may be time to move on from some of the players that have been there since the beginning of the rebuild. Terrence Ross has been playing well, while Evan Fournier has been struggling, and may be in need of a change in scenery. New York is still a young team that he could mesh well with and his shooting (while low now, but historically good) could help spread the floor and create more offense. This could be the right player to improve the team’s guard play, as he could be a consistent scoring option.
From the Magic’s perspective, the team shakes things up, clears minutes for Ross, and gets a veteran leader (who still lives in Orlando) to come off the bench and provide them with much needed three-point shooting. I am not saying Orlando would make this move, but it’s something to explore if things go downhill. Both players are not on great contracts, so a swap could make some sense. Since both teams will be above the cap, but below the tax, after the trade and each are sending out between $6,533,334 to $19.6 million, the most amount of salary either can take back is the outgoing salary + $5,000,000. Below is short chart I often use to dissect the legality of a trade.
From a cap perspective, the Knicks total salary obligations will increase by about $9 million until the end of the 2019-2020 season, but likely by $26 million assuming that Fournier opts into his 2020-2021 player option. While this trade increases the Knicks salary obligations, it at least changes their current position and give them more value. Currently, it seems Lee will be getting $12 million a year and not play a minute of basketball, but with this move the team gets a much younger player on a fairly reasonable contract who can contribute now. Below is a modified Knicks cap sheet showing the proposed Fournier trade.
As you can see, the Knicks can make this proposed trade and still maintain significant cap flexibility into next summer, with the ability to create about $49 million in potential cap space. The team would have still have to renounce most of their free agents and non-guaranteed contracts, which is a potential drawback to increasing their salary obligations.
From the Magic’s cap perspective, the team gets salary cap relief moving forward, especially in the summer of 2020 when they will have approximately $76 million in potential cap space.
Proposed Trade 2: Courtney Lee to the Cavaliers for JR Smith
The Cavaliers have been in some controversy lately. The team is 1-10. Tyronn Lue has been fired. JR Smith publicly requested a trade. Kevin Love is out with an injury. The list goes on and on. The Cavs are entering a rebuild soon, which is not entirely a surprise. While acquiring Lee is not a rebuild move per se, it moves Smith out of Cleveland and helps the team move forward. This trade just makes sense, as both teams are looking to move these players and each is good fit for their respective teams.
From a cap perspective, Smith only has $3,870,000 of his $15,680,000 guaranteed for next season, the last season of his contract. Like the Evan Fournier proposed trade, this trade would not significantly hamper the Knicks ability to create cap space in the summer of 2019.
In fact, if Smith is waived in offseason, then only the guaranteed portion of his salary would count toward the team’s salary cap, resulting in about $62 million in potential cap space. Thus, the team should waive him in the off-season to take advantage of the cap space when free agency hits next summer.
Proposed Trade(s) 3: Jared Dudley to the Thunder who can absorb his salary via the Carmelo Anthony TPE, then Jared Dudley to the Knicks for Courtney Lee
This trade could provide relief to the Knicks and needed scoring for the Thunder off the bench, who rank in 18th in offensive rating. The Thunder are in need of some more shooting, and Lee would be a perfect spark off the bench for that team.
The Thunder can use their $10,883,189 Trade Player Exception, which they generated from the Carmelo Anthony trade, to absorb a contract for that same value. Unfortunately, they cannot aggregate this TPE with any other player’s salary in a trade for Lee. What they can do, however, is absorb a salary up to the value of the trade exception and then subsequently flip that player for Lee. Thus, in this instance the Thunder could trade for Jared Dudley, using the TPE to absorb his salary, and then send him to the Knicks for Lee in a separate trade. From the Nets perspective, this would be a non-simultaneous trade whereby they would generate a $9,630,000 traded player exception (outgoing value +$100,000), which they would have one year to use. I understand the Nets, have their eyes set on cap room next summer, but this trade leaves them in a net neutral position as they can renounce that TPE to clear space. As an extra incentive, the Thunder and/or the Knicks could offer a few second-round picks to the Nets.
I note that the Thunder may not want to do this trade given their ownership group’s reluctance to pay a significant tax, but it’s an idea worth sharing.
For the Knicks, Jared Dudley is an expiring contract, and since they no longer have Lee, they could create approximately $66 million in potential cap space next summer.
Proposed Trade 4: Courtney Lee to 76ers and Jerryd Bayless to the Knicks
Lee can provide added depth to the 76ers bench as they continue to make a run to come out of the east. Bayless hasn’t been involved in the rotation in Philadelphia, so this move makes sense for them.
From a cap perspective, Bayless is an expiring contract, so it gains the Knicks some additional cap flexibility moving forward. The 76ers will take on some additional long term salary, but I think it’s worth it if they can make a push while the east may be more open than initially thought. This would also open up about $66 million in potential cap space for the Knicks next summer, assuming that all free agent cap holds and non-guaranteed contracts are waived.
Proposed Trade 5: Courtney Lee to the 76ers, Jerryd Bayless to the Knicks, Spencer Dinwiddie and Dzanan Musa to the Suns, and Dragan Bender and Milwaukee’s First-Round Draft Pick (4-16) to the Nets
This is a swing for the fences trade in the sense that there are many moving parts, but it could work. Every team gets what they want in this proposal. The Suns get a point guard whom they can offer an extension to on December 8, 2019 (or can wait six months after the trade to give him a longer one), the Sixers move Bayless for a scoring guard who can add veteran depth to the bench, the Knicks move Lee’s contract for a veteran point guard on an expiring contract, and the Nets commit to D’Angelo Russell as the team’s future point guard, gain a first-round draft pick, and a young prospect, all while preserving their cap space for 2019. Here is a link to the proposed trade to help visualize the moving parts.
As an aside, since the Suns failed to pick up Bender’s option for the fourth year of his rookie scale contract, he will be an unrestricted free agent. The most that the Nets could offer him in free agency would be the value of the fourth year of his rookie scale contract had it been exercised ($5,896,519).
In terms of the Knicks being able to offer a max, this would have the same cap implications as Proposed Trade 4.
Proposed Trade 6: Courtney Lee and the Knicks 2020 protected first-round pick to the Pelicans, Darius Miller to the Rockets, Marquese Chriss and Wesley Johnson to the Knicks
This trade merits the Knicks two expiring contracts, one of whom is a young player still on his rookie contract. Note, like Bender, Chriss’s 4th year option was not picked up, so he’ll be an unrestricted free agent and the most the Knicks can pay him would be the value of his 4th year rookie contract. Wesley Johnson is a solid veteran who also makes sense. Since the Knicks get two expiring contract, they clear up $12 million in cap space making for a potential total of about $66 million in cap space next summer, which could be enough to offer a max contract or more.
For the Rockets, Darius Miller takes the place of Chriss, who is not playing at all, and provides some extra shooting off the bench.
For the Pelicans, they could use a player like Lee off the bench. He could be a valuable piece for them in their push to go back to the playoffs. The Knicks may have to give a pick to the Pelicans as an incentive for them to take Lee’s contract.
In terms of the Knicks being able to offer a max, this would also have the same cap implications as Proposed Trade 4 because all of the players received in the trade are expiring contracts.
If there is no trade partner, then the team can always consider waiving him.
If the Knicks cannot find a trade for Lee, then the team can waive him, take his full cap hit this year, and then opt to stretch his 2019-2020 cap hit for the next three years. Given that the team has already waived and stretched Noah, however, stretching the cap hit would be ill-advised, as that would give the team an approximate $10 million dead cap hit each season from 2019 through 2022. The better move would be to absorb the cap hit in the 2019-2020 season, but that’s only true if the team has no shot at a max free agent that off-season. In any event, Lee would be receiving checks from the Knicks until 2022. Of course, the team and Lee could agree to a buyout thereby decreasing his protected compensation, lessening the severity of the cap hits as well, but this seems unlikely given that the Knicks could not agree to a buyout with Joakim Noah earlier this October.
It’s hard to say where Lee finishes this season. It’s clearly not easy to have his contract moved, as it likely would have been done by now if it was easy. It’s possible he stays with the Knicks for the duration of his contract, but as the season progresses, more trade opportunities will open up. I personally think he gets moved by the trade deadline to a playoff team for minimal value as the Knicks are interested in clearing cap space for 2019.