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Evaluating the Salary Cap Impact of the Ibaka Trade

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They did it! Now what?

NBA: Orlando Magic at Miami Heat Steve Mitchell-USA TODAY Sports

We’ll dive deep on some stats next week to figure out how helpful Ibaka will be (he’ll be great), but for now let’s take a quick look at just the trade mechanics and the impact on this summer.

The Trade

Toronto receives Serge Ibaka for Terrence Ross and a 2017 1st round draft pick.

(It’s the lower, or lesser, of TOR’s and LAC’s 2017 1st round picks.)

This trade is executed as a traditional simultaneous trade, meaning the Raptors and Magic had to follow salary matching rules. Ibaka makes $12.25 million this season. To absorb his contract, the Raptors would need to send out $8.6 million at least to avoid the tax (and as low as $8.1 million if they didn’t care about that). They sent out Terrence Ross ($10 million), which is more than enough. Orlando has no issues, as they take in less money than they send out. The draft pick doesn’t count as salary in the trade.

This Summer

The move also clears salary from the cap this summer. Ross’ $10.5 million disappears, as does the cap hit associated with the pick. It will be the lesser of the two picks this summer, which right now projects around a $1.5 million cap hit. So that clears about $12 million from the books, a good start on clearing enough room to re-sign Ibaka and Kyle Lowry (and maybe Patrick Patterson) without paying an incredible amount of taxes.

We’ve covered Ibaka’s possible acquisition in an earlier post last week, and the salary implications of it. Long story short, the Raptors will certainly need to shed more long term salary to make re-signing all their key free agents a reasonable possibility, unless ownership is fine with spending a lot of money to chase a championship. Look for trades now or more likely at the draft or in the summer to shed some contracts that may represent some redundancy for the team. The only real big money deals on the roster right now outside of the stars are Jonas Valanciunas ($15 million), DeMarre Carroll ($15 million) and Cory Joseph ($8 million), so brace yourselves for an eventual move that removes one or more of them from the team, to have their minutes filled in with cheaper alternatives. One note of concern: in Valanciunas’ case, his cheap replacement seems to be Lucas Nogueira, but he’ll only be cheap for one more season before he hits free agency. The same goes for Norman Powell filling in for Ross now and potentially Carroll later.

In any case, none of that matters for the next few months, as the Raptors look to make a push to the top of the Eastern Conference. They can sort out the tax implications for next season in the summer.