It’s trade season! The Toronto Raptors approach the trade deadline with an abundance of options, ranging from standing pat, to selling some expirings, to combining some assets to add to the team. Let’s take a look at what they have available to them and what limitations there are in terms of realistic options heading into the trade deadline.
First place to start: the current salary situation. Years listed include this season.
Pascal Siakam $33.0M (3 years, UFA)
Fred VanVleet $19.7M (2 years + PO, UFA)
Goran Dragic $19.4M (1 year, UFA)
OG Anunoby $16.1M (3 years + PO, UFA)
Gary Trent Jr $16.0M (2 years + PO, UFA)
Scottie Barnes $7.3M (4 years, RFA)
Chris Boucher $7.0M (1 year, UFA)
Khem Birch $6.3M (3 years, UFA)
Precious Achiuwa $2.7M (3 years, RFA)
Malachi Flynn $2.0M (3 years, RFA)
Yuta Watanabe $1.8M (1 year, UFA)
Svi Mykhailiuk $1.7M (1 year + PO, UFA)
Isaac Bonga $1.7M (1 year, UFA)
Dalano Banton $0.9M (2 years, RFA)
The Raptors also paid guaranteed salary to some waived players.
And Gary Trent Jr. has some bonuses worth $250k. Based on my understanding of these bonuses, they are attached to team success and the bars are low enough that it is best to assume he earns his full bonus, to be safe. So we will.
That leaves total team salary at $136.6M. The tax line this season is... $136.6M.
I guess we should look closer. The team salary total is $136,586,843. The tax line is set at $136,606,000. That leaves... $19,157. That’s pretty tight.
So, essentially, the Raptors are exactly at the tax line. They will not want to enter the tax this year (or, frankly, next year) unless it is to add a legitimate superstar. Anything else, even another solid starter, I suspect they insist on taking back equal or lower salary in a trade.
There are all sorts of trade rules that limit how much salary a team can take back in a trade, but given the consideration above, they will be less relevant to the Raptors this year. Still:
- A taxpaying team can take back up to 125% (+$100k) of what they send out in salary.
- A non-taxpaying team can take back up to:
175% (+$100k) of what they send out (up to $6.5M outgoing salary)
$5M more than they send out (up to $19.6M outgoing salary)
125% (+100k) of what they send out for bigger deals
- A team with cap space can take back as much as they like so long as they still have cap space after the trade
In the Raptors’ case, these limits will mostly apply to the team they are trading with, as we’ve noted the Raptors will not want to take back more than they send out.
The incredible proximity to the tax threshold noted above is why the Raptors are currently carrying the league minimum 14 players, rather than a full roster of 15 players. Adding a 15th player would move them into the tax.
As such, if they make a trade where they remove more players from their roster than they add (say, trading two players for one in return), they’ll fall below that minimum of 14 players — meaning they would need to sign an additional player. They will need to keep that in mind when making that trade — it is not good enough to break even in salary in such a trade, you actually have to decrease the team salary by enough to sign a 14th player without moving over the tax.
A one year contract at the minimum salary counts as $1.7M against the tax, but partway through the season they only count for the amount they will earn — for example, signing a player with half the season remaining would mean they only count as half the minimum salary. At the trade deadline of February 10th, signing a player for the rest of the season would allot them 34% of the minimum salary ($566k).
So, as time progresses and we get closer to the deadline, the team’s ability to replace outgoing players with minimum signings increases (as the cost of the replacements decreases), and the ability to build a deal financially becomes easier.
The other consideration with big trades this year is that a lot of the salary ballast the Raptors would want to put into trades are expiring contracts. Unless the deals coming back are also expiring (this would be surprising), that means you are adding salary for next year.
Next year they will likely be in the same situation, where they would prefer not to pay the tax unless they add a megawatt superstar and think they are a true contender as a result. They currently have some decent cushion against the tax next year but if they bring back equivalent salary for all their expirings that won’t be the case.
Here is next year’s salary breakdown at the moment:
Pascal Siakam $35.4M
Fred VanVleet $21.3M
OG Anunoby $17.4M
Gary Trent Jr $17.3M
Scottie Barnes $7.6M
Khem Birch $6.7M
Precious Achiuwa $2.8M
Malachi Flynn $2.1M
Svi Mykhailiuk $1.8M
Dalano Banton $1.6M
That’s $114.1M to 10 players. The minimum salary next year will be $1.8M for tax purposes, meaning the 4 empty slots will cost at least $7.1M.
That means at minimum about $121M in salary. The tax line is projected at $144.6M next year, so the Raptors can add a player or players worth roughly $25M next year and still be OK. If they add more than one player, that number goes up, as each player added replaces one of those 4 minimum salaries the team had to add.
If the Raptors don’t trade their expirings, they will have a few free agents they may want to re-sign, so keep that in mind with that cushion. Dragic won’t be of interest to them but if Boucher, Yuta or Bonga are still with the team they may want to sign them back. Same goes for Champagnie and David Johnson, who will be done their two-way contracts and needing NBA deals.
So, let’s use a current rumour about an available player to demonstrate some of the above concerns.
This one is even trickier, as the other team in the equation also has to keep their salary low as they are close to the tax too (though not quite as close as the Raptors, thank goodness).
Indiana’s Myles Turner has been on the block for ages, and even with his recent injury, is likely to be one of the hottest names at the deadline. The Raptors could probably use a starting quality center, especially one that can protect the rim and space the floor a bit.
In any case, let’s accept for this example that the Raptors want Turner. What does an offer look like?
Well, the rumoured price for Turner is either two first round draft picks, or a draft pick and a prospect.
The Raptors are unlikely to want to trade two first round picks. There is a good deal of uncertainty a couple of years from now for the roster, so they’ll want to be able to pivot to the draft if need be. And the rules about trading future first round picks prevent them from trading back to back picks — meaning trading two picks is trading their 2022 1st and their 2024 1st. That’s likely too much long term uncertainty.
So they likely pursue the pick and prospect package. It might be pretty optimistic to assume Malachi Flynn would carry much value as a prospect right now. Precious Achiuwa is a likelier piece. Though with Turner’s injury, maybe the market is suppressed enough.
In any case, let’s try to build an offer that works financially, as well as in terms of value.
If the value mostly lies in Precious ($2.7M) and the first round pick (no salary matching value in a trade), then the Raptors would need to send out a lot more salary to be able to bring in Turner’s $18M. Remember above, we noted that the Raptors need to decrease their salary, not increase it, in any trade to avoid the tax.
So, the obvious big salary ballast piece to throw in is Goran Dragic, a player that seems to be on the roster exclusively for the purpose of throwing into a trade like this. That makes the trade:
Dragic ($19.4M), Precious ($2.7M), 2022 1st for Turner ($18M)
That’s $22.2M out for $18M back. Great! Raptors shed a bunch of salary, get further from the tax, and everybody gets what they want.
Except the Pacers are now in the tax. They started the day with about $2M in room under the tax line. Not an agreeable situation for a team that is selling.
So, what salary can the Pacers send back to reduce their salary back below the tax. Obviously something around $2.5M is ideal — that brings the Raptors and Pacers below the tax again.
Unfortunately, the Pacers don’t have a lot of salaries around that price, and the ones they have are rookie scale deals for prospects on their team — and the team selling does not usually throw prospects into the trade.
The cheapest veteran contract on the team is Torrey Craig, who makes $4.9M. Throw him into the deal and now the Pacers are happily below the tax. Unfortunately, now the Raptors are about $1M into the tax. You can see how this balancing act is sometimes hard to strike.
The final deal I cobbled together is this one:
Dragic ($19.4M), Precious ($2.7M), Flynn ($2.0M), 2022 1st for Turner ($18M), Craig ($4.9M)
That puts the total outgoing salary at $24.2M, and incoming salary at $22.9M. The Pacers are left having taken on $1.3M in salary, leaving them with a full 15 man roster and several hundred thousand in cushion below the tax threshold. The Raptors clear $1.3M in room under the tax, but are required to go sign a 14th player to meet the roster size requirements, so that cushion under the tax gets cut down to about $500k once they sign a minimum salary rest-of-season deal.
The final consideration is next season. The Raptors have sent out a huge expiring contract in Dragic, and two small salaries in Precious and Flynn. Meanwhile, they’ve taken on two larger contracts with money due next season — both Craig and Turner have this year and next left on their contracts.
Recall from above that the Raptors had $114.1M due to 10 players. Take out Precious and Flynn ($4.9M) and add in Turner and Craig ($23.1M), and that increases to $132.3M. Add in your 4 empty roster spots at the minimum salary ($7.1M) and your total is $139.4M. With a tax line projected at about $144M, that means they have a decent little bit of flexibility there. Not enough to sign a significant free agent with the mid-level exception or anything but enough wiggle room to say add a 15th man or have a little more flexibility re: trades during the season.
So that’s an example of how a trade might be constructed for the Raptors this season. A bit of a tightrope to walk, but it’s doable. And if their trade partner is not as near the tax as Indiana is, it’s a little easier to make the finances work for both sides.
That’s it for now. Feel free to hit me up with questions or trade proposals in the comments and I’ll do my best to address them.
All salary information as per basketball-insiders.com.