Are the Raptors buyers or sellers at the trade deadline?

The NBA trade deadline is coming this Thursday at 3pm. With the Toronto Raptors struggling as of late, they may have more decisions to make then we first thought at the beginning of the year.

For Part 1 of our Trade Deadline preparation, let’s review what those choices are for the Raptors and how certain deals could work. Tomorrow’s Part 2 will get into more specific trades and outcomes.

Major Decisions

Toronto’s last two seasons have been well-documented in this space and others as gap years of a sort, a transition from the championship roster to a roster built around the younger core of players — namely Pascal Siakam, Fred VanVleet, and OG Anunoby. Last season they kept all the championship pieces that were already locked in, and after losing Kawhi Leonard in free agency also let veteran Danny Green walk. They re-signed Patrick McCaw to a two year deal, and otherwise filled out the roster with low-cost, second draft candidates in Stanley Johnson and Rondae Hollis-Jefferson. They extended Kyle Lowry’s contract by one season, so it would not end after that season.

Last free agency, the Raptors continued their march away from the championship roster, letting veterans Marc Gasol and Serge Ibaka walk without making much of an attempt to re-sign either, instead prioritizing getting Chris Boucher locked into a team friendly contract, and signing Aron Baynes to act as a veteran centre in the rotation. They had the cap flexibilty to make even a one-year offer to Ibaka or Gasol too big to refuse, but chose to go another way.

Many of those moves were made with the knowledge that the Raptors were lined up to have a significant amount of cap room in the summer of 2021. At one point Toronto was projected to have enough cap room to sign a maximum salary unrestricted free agent (at 30 percent of the cap). After the biggest names left the market by signing extensions, the Raptors signed their own pending restricted free agent to an extension, giving Anunoby a long term deal and decreasing their available cap room in the process.

The Raptors do still project to be able to generate almost $31 million in cap room, which is enough to make a maximum contract offer to a player with less than seven years experience (higher experience players can earn more) — but that would require waiving their unguaranteed salary players like Chris Boucher, Aron Baynes, and De’Andre Bembry. If the Raps keep Boucher, they would have about $25 million in cap room.

Now, the other thing Toronto has this summer is two pretty important unrestricted free agents (plus some other less important free agents in McCaw, Johnson, Davis). Kyle Lowry and Norman Powell have been two of the roughly six rotation-quality players the Raptors have used heavily this season, and are the longest tenured players on the team. And, of course, Lowry is the greatest Raptor of all time, so there’s that.

In both cases, the Raptors have full Bird Rights, which would allow the team to re-sign both Lowry and Powell to their maximum salary for up to five years, and not have to worry about having cap space to fit them in. Unfortunately, to have those rights, the players have to have a cap hold sitting on the books — in Powell’s case, just over $16 million, which would mean taking that $25 million left after keeping Boucher and dropping it to $10 million. In that case the team might as well just stay over the cap and use the mid-level exception ($9.5 million starting salary) to sign a free agent.

Lowry’s cap hold will be his maximum salary, which would mean all of Toronto’s cap space disappears, so it is even more clear cut there. But in either case, let alone with keeping both players, the decision is basically this: the Raptors either keep their cap space intact to pursue a free agent or trade this summer (or, yes, roll it over to the year after); or they can offer longer term contracts to Lowry and/or Powell.

What Are the Costs?

If those are the two options now for the Raptors, what are the downsides to each one? Well, keeping Lowry and Powell comes along with the obvious opportunity-cost listed above: if they are on the team, the team has no cap flexibility, and in fact will have trouble staying below the tax line if both players are retained. (In this scenario, as a team not likely to be pushing for the title, the Raptors would certainly want to stay below the tax line.)

But there are additional costs. As much as it might be considered likely the team can re-sign both players, in unrestricted free agency there is always a chance the player just leaves. In which case of course the team likely gets nothing back. There is a chance of a sign-and-trade bringing back something of value, especially if the player wants to go to a team that is over the cap, but the value returned on sign-and-trades is not usually anything special even at the best of times. With the amount of cap room available league wide this summer, it is not going to be the best of times for a sign and trade.

So there is a chance, the likelihood of which can be debated, that the Raptors could decide to keep one or both players and then end up failing to do so. The only way to be certain to avoid that fate is for Toronto to trade one or the other — or both — before the trade deadline this week.

Now, that only matters if there is a solid return out there for Lowry and Powell. As an extreme example, trading an expiring free agent for the 60th overall pick in the draft is silly — it’s getting “something” for the player before they walk for “nothing” but it’s not going to change anything for your team moving forward. While keeping the player provides your team with value for the remainder of the season. Remember: if there is anything above a zero percent chance they re-sign, there is value in that too.

So for each decision, the package coming back to Toronto matters. And as fans, we don’t know what the value of these players would be. We can guess. We’ve had some success in these parts in the past on that sort of guess. But it’s still guessing.

Now, let’s assume there is a decent return for either player, then not making a trade for that return would be a cost of deciding to try to re-sign the player.

One more thing, before we move on. Let’s say the Raptors succeed in keeping Lowry and Powell and sign them both to deals with term. But because of the amount of cap room available and number of teams interested, the price for each is higher than the team would like. With both players then on pricey deals, that might limit what the Raptors are able to do to improve the roster — especially if one or both sees a dip in performance after signing their deals. Lowry at his age is always a risk of that (though one that has yet to really materialize). But even Powell, with his largely one-dimensional game (a very good dimension — scoring — but pretty much just the one nonetheless), could see his value drop precipitously if, for example, he lost some of his shooting touch or even just had a cold streak.

What Are the Benefits?

But there is another side to the coin of course. If the Raptors trade one or both of Lowry and Powell now, they are losing something too.

With Powell, it’s a little cleaner, so let’s start there. Powell has made leaps and bounds of improvement over the past couple of seasons, developing into a real scoring threat. Sure, you’d love him to be able to provide that with consistency off the bench, but even needing to start he’s finally looking like a net positive contributor as his incredible scoring in that finishing role is tipping the scales the right direction even with his lacklustre defense and a lack of creation and playmaking to go with that scoring.

What Toronto loses with moving Powell is that the team adds another player to the list of home grown guys who developed into something much more than they were projected to be. Keeping those types of players in the fold is great for the organizational culture, and helps the next guys coming up the pipeline make the same leaps. And you lose the chance to bet on him making further improvements to his game — improving the defense or playmaking could be his next step to establish himself as a really solid player. Whether Toronto is interested in making that bet now though is another question.

Lowry is more complicated. He’s a franchise icon. He wants to retire here (though left the door wide open for that retirement coming through a one-day contract return). Fans rightly love him. He was the second star on the championship team, and the leader of said team. He’s also still very, very good, even if we’re now seeing a bit of a drop-off in his individual defense. In short, Lowry is still a significant driver of wins for the Raptors. (Though, yes, various impact stats suggest he is now falling behind the other core three guys in driving wins).

The franchise also has a bit of a spotty history with its stars. Vince’s time in Toronto ended badly. Bosh left. DeRozan got traded. Kawhi left. If Lowry is going to leave, it would be best if it at least felt different — mutual, beneficial, and so on. There is real value to the franchise image having Lowry’s departure (if it were to happen) be as friendly as possible. His playing right up to his retirement here would also be ideal in its own way.

But that mutual thing is important because ultimately as a pending free agent, Lowry has a lot of choice here. Which is why my position has been that ultimately Lowry should get to decide, or at least be a deciding factor. If he wants to pursue a second championship before his game really sees a downturn, the Raptors might not be in a position to offer that to him, as their core is now on the upswing and it will take some time to recreate the depth their championship team had. Meaning he would be looking to join a contender, and ideally for this upcoming playoff run. This sort of thing matters when a player is running out of playoff runs at his best. Hence a trade now, and not a sign-and-trade or a departure in the summer.

But if that’s not what Lowry wants, and he’s happy being the veteran leader to this team, and having competitive but likely not contending rosters around him for the likely final couple years of high-end performance he will have, the Raptors are likely quite happy to have him stay in that role. And choosing to trade him if he’s content with that would be just the sort of thing they would look bad for doing, unless they really got a great return (turning those types of deals down is just not smart). But it is unlikely a great, can’t-say-no offer will be on the table. Lowry is expiring, he’s getting older, he’s always been on the second tier of the league’s stars (and often rather disrespectfully viewed as less even than that). That’s not what fetches mountains of draft picks or blue chip prospects in this league.

That lays the groundwork for the thinking the Raptors need to do when approaching any deadline trades of their two biggest and most likely trade chips. Now we should get into what the Raptors can do, how they can do it, and maybe what decision is best going forward.

But that’s for tomorrow morning.

All salary information per basketballinsiders.com.