How Warriors/C’s/Heat Trade Works Financially

The primary reason the Warriors dealt two first-round picks and three bloated contracts to the Jazz this summer was to clear enough room to absorb Andre Iguodala, who came from the Nuggets in that same three-way deal with Utah. Yet if it weren’t for a vestige of that trade, the Warriors wouldn’t have been able to pull off yesterday’s three-teamer with the Celtics and Heat.

Golden State had four trade exceptions at its disposal entering Wednesday. Two of them were for less than $1MM, so they were of no help in acquiring Jordan Crawford and MarShon Brooks. That left them with a choice of either the sizable $11.046MM exception created when the Warriors sent Richard Jefferson to the Jazz, and the other a $4MM exception for Brandon Rush, who also went to Utah. According to Eric Pincus of Basketball Insiders, the Warriors chose to use the larger Jefferson exception (Twitter link). That makes sense, since the Warriors are more likely to find a deal that would allow them to use most or all of the $4MM Rush exception than to use the $11.046MM Jefferson exception to somehow fit an eight-figure salary onto their payroll without giving up commensurate salary.

The combined incoming salary of $3,372,499 that Golden State acquired in Wednesday’s trade is greater than 150% plus $100K of the outgoing salary of Toney Douglas, who’s making just $1.6MM this year. Ordinarily, the Warriors would have to send out another player to make the deal work, but the Jefferson exception allows them to absorb the $1,210,080 salary of Brooks by itself. That means the Warriors can treat the exchange of Douglas for Crawford as its own transaction, and Crawford’s $2,162,419 pay is less than $150% of the money Douglas makes, so it satisfies the salary-matching requirements.

The Warriors could also make the trade work if they used the Jefferson exception for Crawford and made it a one-for-one swap of Douglas-for-Brooks. That option would create a new trade exception, but it would nonetheless allow for less flexibility. The Douglas-for-Brooks swap would create a tiny exception worth $389,920, which is equal to the difference between the Douglas and Brooks salaries. That amount of money would only be enough to take on a prorated salary. Crawford’s salary would meanwhile eat up a larger portion of the Jefferson exception. Putting Brooks, who makes less than Crawford does, into the Jefferson exception leaves it at $9,835,920. That’s much more useful than creating a new exception for less than $400K, and it allows for greater flexibility than if the Jefferson exception had been reduced to $8,883,581, as would have happened if the Warriors had employed it to absorb Crawford’s salary.

There are still a couple of new exceptions that Wednesday’s trade creates for each of the other teams in the deal. Boston couldn’t absorb Joel Anthony‘s $3.8MM salary for Brooks, since it’s more than 150% plus $100K of what Brooks is making, but Crawford’s salary would fit within those bounds. That allows the Celtics to treat their unloading of Brooks as its own transaction. So, the Celtics have a $1,210,080 exception, equal to the amount of Brooks’ salary, that they can use anytime until the one-year anniversary of Wednesday’s trade.

The Heat gave up one player and received another, so the calculus is simpler for them. They receive a trade exception worth $2.2MM, the difference between the salaries for Anthony and Douglas. Like the Celtics, Miami will have up to one year to use its exception.

Executives from all three teams have said since the trade that they continue to look to make changes. That means the exceptions left over for the Warriors, and the ones that the Celtics and Heat created, could soon play a role, with the trade deadline looming next month.

ShamSports was used in the creation of this post.