- The Spurs‘ agreement with Rudy Gay is worth $10,087,200, the highest allowable salary San Antonio was permitted to pay him via his non-Bird rights (Twitter link).
Raptors president Masai Ujiri claims he never told DeMar DeRozan he would not be traded, though Ujiri admits making a mistake talking at length with the All-Star shooting guard about his future with the franchise, according to an ESPN report. DeRozan fumed publicly over being traded to the Spurs as their centerpiece of the deal that landed Kawhi Leonard in Toronto.
“I had a conversation with DeMar at summer league, and I really want to leave it at that,” Ujiri said during a news conference Friday. “We spoke … I think maybe my mistake was talking about what we expected going forward from him. So, not necessarily talking about a trade but what I expect from him going forward, and I think that’s where the gap was.”
We have more regarding the blockbuster trade:
- Ujiri simply couldn’t pass up the chance of acquiring Leonard, even though Leonard wants to play in Los Angeles when he can exercise his early termination contract option next summer. Ujiri feels it was worth the risk. “We’ve been doing this for how many years?,” Ujiri said, according to a transcript of his press conference posted by RaptorsRepublic.com. “You can’t keep doing the same thing over and over again and when you get a chance to get a top 5 player – which isn’t very often – I think you have to jump on it.”
- Leonard has not expressed any reservations about playing in Toronto, according to Ujiri, who will push hard to convince Leonard to re-sign with the Raptors. “I think there’s a lot to sell here,” Ujiri said. “Our team, our culture, our city, our ownership, we have everything here except a championship, in my humble opinion. I don’t think we lack anything in this city.’
- DeRozan apparently wasn’t impressed by Ujiri’s apology, according to an Instagram post that was relayed by The Score (Twitter link).
- Leonard has officially arrived in Toronto to take his physical. The team tweeted out a photo of him at their practice facility.
JULY 20, 5:25pm: The signing is official, according to a team press release.
JULY 10, 12:48pm: The Spurs are finalizing a deal to bring back restricted free agent guard Bryn Forbes for next season, reports Shams Charania of Yahoo Sports (Twitter links). According to Charania, Forbes will sign a new two-year contract with San Antonio.
Forbes, who will turn 25 later this month, has spent the last two seasons with the Spurs, becoming a regular part of the team’s rotation in 2017/18. In 80 games (19.0 MPG) last season, he posted 6.9 PPG and 1.4 RPG with a .390 3PT%.
Because Forbes has two years of NBA experience, he’ll be on track for unrestricted free agency in 2020 if he plays out his new two-year deal with the Spurs. At that point, the team will have full Bird rights on him. San Antonio figures to re-sign him this time around using his Early Bird rights.
The Spurs issued qualifying offers to three players eligible for restricted free agency this summer, and both Forbes and Davis Bertans appear set to return on new multiyear deals. San Antonio’s third restricted free agent, Kyle Anderson, signed a four-year, $37MM+ offer sheet with the Grizzlies which the Spurs elected not to match.
JULY 20: The Spurs have officially signed Belinelli, the team announced today in a press release.
JULY 1: Former Spur Marco Belinelli will return to San Antonio on a two-year, $12MM contract, tweets ESPN’s Adrian Wojnarowski. The Spurs still have their mid-level exception available and may use that to ink Belinelli.
The 32-year old sharpshooter spent two seasons with the Spurs from 2013 to 2015. He started last season with the Hawks, then joined the Sixers after agreeing to a buyout in February. He averaged 12.9 points in 10 playoffs games with Philadelphia.
While Belinelli isn’t the sort of dynamic player who can impact games in a variety of different ways, his outside shooting makes him a valuable rotation piece. He attempted a career-high 5.3 threes per game in 28 regular season contests with Philadelphia last season, converting them at a 38.5% rate.
We ranked Belinelli as the 30th-best player available this offseason in our list of 2018’s top 50 free agents.
Belinelli is the second agreement of the night for San Antonio, which also reached a deal to re-sign veteran forward Rudy Gay.
Photo courtesy of USA Today Sports Images.
JULY 20: The Spurs have officially signed Cunningham, the team announced today in a press release.
JULY 16: 
Free agent forward Dante Cunningham has agreed to terms on a deal with the Spurs, reports ESPN’s Adrian Wojnarowski (via Twitter). According to Shams Charania of Yahoo Sports (Twitter link), Cunningham will sign a one-year contract with San Antonio.
Cunningham, 31, is coming off a season in which he appeared in 73 total games for the Pelicans and Nets, having been sent to Brooklyn in a deadline-day trade. On the year, he averaged 5.7 PPG and 4.1 RPG with a .451/.345/.596 shooting line.
After making just two 3-point shots in his first six NBA seasons, Cunningham has shown an increased willingness to fire away from beyond the arc in recent years. Over the last three seasons, he has knocked down 184 threes at a 35.2% rate, solid numbers for a player who sees most of his action at power forward. He’ll likely be expected to continue stretching the floor in San Antonio.
Cunningham won’t be in line for a big payday with the Spurs. His one-year deal is expected to be worth $2.5MM, says Jabari Young of The San Antonio Express-News (Twitter link).
That would exceed Cunningham’s minimum salary, so the Spurs may be using a portion of their mid-level exception to complete the signing. San Antonio used approximately $6MM of the $8.641MM MLE to sign Marco Belinelli.
Having added Cunningham, Belinelli, and Lonnie Walker while re-signing Rudy Gay, Davis Bertans, and Bryn Forbes, the Spurs now have 14 players on NBA contracts for the 2018/19 season.
Photo courtesy of USA Today Sports Images.
In his breakdown of this week’s mega-deal that sent Kawhi Leonard to Toronto and DeMar DeRozan to San Antonio, ESPN’s Zach Lowe relays several intriguing Spurs-related tidbits on the situation. According to Lowe, San Antonio “never showed interest” in Leonard offers that were heavy on draft picks and unproven young players. Even in talks with the Sixers, it’s not clear if Markelle Fultz would have piqued the Spurs’ interest — San Antonio wanted one of Ben Simmons or Joel Embiid in any deal with Philadelphia, says Lowe.
Lowe also notes (via Twitter) that the league memo announcing the Leonard trade between the Raptors and Spurs includes one more interesting item: San Antonio is sending $5MM in cash to Toronto as part of the swap. As Lowe observes, that money is likely meant to help make up for the fact that Leonard’s trade kicker will increase the Raps’ projected tax bill for 2018/19, as we detailed on Wednesday.
Here’s more from Lowe, along with a few more Spurs notes:
- The Spurs had dangled Danny Green in previous trade discussions over the past year, and weren’t seeking a big return for him, sources tell Lowe.
- According to Lowe, San Antonio lowered its asking price for Leonard in the days leading up to the club’s agreement with Toronto. However, it was still difficult for other teams to put together an appealing package, since the Spurs’ top priority was acquiring an established veteran scorer who was under contract for multiple seasons.
- Spurs head coach Gregg Popovich spoke to reporters on Wednesday about the Leonard trade, explaining the team’s thinking and making an effort to turn the page on the Kawhi drama. Ohm Youngmisuk of ESPN.com has the story, along with the quotes from Popovich, who had nothing but good things to say about Leonard. “Kawhi was a great teammate the whole way through,” Popovich said. “He did his work, and he was no problem for anybody. Talking heads out there have to have a story. If I was a talking head, maybe I am, I would have stories, too. All the stories that denigrated him in that regard, that was unfortunate and inaccurate.”
- In an interesting piece for ESPN.com, Bobby Marks takes an in-depth look at why the Raptors matched up best with what the Spurs were looking for and won the Kawhi Leonard sweepstakes over teams like the Celtics, Sixers, and Lakers, who approached Leonard trade talks more conservatively.
The Raptors had several conversations with Kawhi Leonard and his agent after Wednesday’s blockbuster trade, tweets Michael Grange of Sportsnet, who adds that the talks were “positive” and “forward-looking.” Leonard hasn’t taken his physical yet, reports Josh Lewenberg of TSN (Twitter link), but the team isn’t concerned and remains confident that he will pass it (Twitter link).
Toronto could opt to waive the physical, ESPN’s Brian Windhorst said yesterday in an appearance on “Outside The Lines,” although that would obviously be a risky move. Leonard has 48 hours to report to the Raptors, but Windhorst notes the team could opt to extend that deadline. Team president Masai Ujiri is expected to address the media on the deal by the end of the week.
There’s more news to pass along on the biggest trade of the summer:
- The Spurs were determined to get a scorer in exchange for Leonard, which is why the Raptors were able to get their attention with DeMar DeRozan, according to Kevin O’Connor of The Ringer. San Antonio wasn’t looking to begin the rebuilding process with a package of draft picks and unproven players. In addition, Jakob Poeltl provides a young interior presence for a team that starts 38-year-old Pau Gasol and 33-year-old LaMarcus Aldridge.
- The Spurs lost leverage when LeBron James joined the Lakers without demanding another star accompany him, writes Zach Lowe of ESPN. Lingering injury concerns and Leonard’s open desire to play in his hometown of Los Angeles prevented the Spurs from getting a return more in line with his value. The Raptors now have several months to sell Leonard on the benefits of playing in Toronto, adds Lowe, who says if they get the feeling by Thanksgiving that he still plans to leave next summer, they can move him to the Lakers or Clippers for about what they paid for him.
- Even though Leonard has made it clear he doesn’t want to play in Toronto, he represented the team’s best chance to acquire an elite talent, Lewenberg writes in a full story. Leonard also came at a reasonable price, as Ujiri didn’t have to part with his three best young prospects in OG Anunoby, Pascal Siakam and Delon Wright and held onto all his draft picks after 2019.
- The Spurs traded one unhappy player for another and will have to work to develop a positive relationship with DeRozan, observes Sam Amick of USA Today. DeRozan felt betrayed by the Raptors, posting “Be told one thing & the outcome another. Can’t trust em. Ain’t no loyalty in this game” as part of an Instagram message. San Antonio may rely on assistant coach Ime Udoka, a former workout partner of DeRozan, to help smooth things over.
- With Leonard and Tony Parker both gone and Manu Ginobili contemplating retirement, the Spurs are moving into a new era, notes Jeremy Woo of Sports Illustrated. The changes make a 22nd consecutive trip to the playoffs look like an uncertain prospect, he adds.
The blockbuster trade completed today by the Spurs and Raptors involving Kawhi Leonard and DeMar DeRozan will, of course, have massive on-court ramifications for both teams. However, it’s also worth taking a closer look at the deal from a financial perspective to see exactly how it worked, how it will impact the players involved, and how it will affect the Spurs’ and Raptors’ short- and long-term cap outlook.
Let’s dive right in and examine the financial implications of today’s mega-deal…
No more Designated Veteran Extension for Kawhi
By earning a spot on the All-NBA First Team in two of the last three seasons, Leonard became eligible for a super-max contract known as a Designated Veteran Extension. Generally, players with Leonard’s years of NBA experience are only eligible for maximum-salary contracts worth up to 30% of the cap, but Kawhi’s All-NBA nods qualified him for a deal starting at up to 35% of the cap in 2019/20.
As we outlined on Tuesday, a five-year Designated Veteran Extension starting in ’19/20 is currently worth a projected $221MM+ based on the NBA’s latest cap projections. However, since a player can only get that form of contract extension from the team that signed him to his initial rookie scale extension, Leonard will no longer qualify. Instead, he’ll be eligible next summer for a five-year deal with the Raptors worth a projected $189.66MM, or a four-year contract with another team worth a projected $140.6MM.
While many observers will say that Leonard “lost” $30MM+ (or $80MM) due to today’s trade, that’s not necessarily accurate. There’s no guarantee that San Antonio would have put that Designated Veteran Extension offer on the table for Kawhi as he came off an injury-plagued season, so it’s not as if he formally turned down $221MM+. Depending on how his 2018/19 season plays out, there’s also no guarantee he’ll be in line for a max deal next offseason — a lot can change in a year.
Still, Leonard’s maximum possible earnings for the next several years have a lower ceiling as a result of today’s trade.
Leonard gets a trade bonus
It wasn’t all bad news for Leonard, who lost access to that super-max extension and will move to Canada from Texas, a state with no income tax. His contract included a 15% trade kicker, so he’ll receive a modest bonus as a result of today’s trade.
Because player-option years aren’t taken into account when calculating trade bonuses, Leonard’s 15% trade kicker will only apply to his $20,099,189 salary for 2018/19. His 15% bonus will be worth $3,014,878, increasing his ’18/19 earnings to $23,114,067.
How salary-matching worked in the trade
Due to the size of the contracts changing hands in this deal, both the Raptors and Spurs were permitted to take back up to 125% (plus $100K) of their outgoing salaries. This was slightly complicated by the fact that Leonard counted for $20,099,189 (no trade kicker) from the Spurs’ perspective and $23,114,067 (15% trade kicker) from the Raptors’ perspective.
For the Spurs, simply sending out Leonard wasn’t enough to take back DeRozan ($27,739,975), let alone Jakob Poeltl ($2,947,320). San Antonio had to include more salary in the swap, which was one reason why Danny Green ($10,000,000) was part of the deal. Combining Leonard’s and Green’s cap hits, San Antonio was eligible to absorb up to about $37.72MM. DeRozan and Poeltl comfortably fit within that threshold.
For the Raptors, simply sending out DeRozan’s $27,739,975 salary allowed them to take back up to about $34.77MM. That was more than enough to absorb both Leonard and Green, even after taking into account Kawhi’s trade kicker.
Since Poeltl wasn’t needed for salary-matching purposes, the Raptors will create a traded player exception worth his $2,947,320 salary. It’s the only TPE generated in the deal, and Toronto will have until July 18, 2019 to use it.
Impact on 2018/19 cap outlook
In an unusual development, both the Spurs’ and Raptors’ team salaries will actually increase as a result of this deal due to Leonard’s trade kicker. That’s not a big deal for San Antonio, whose team salary will only increase very marginally — the Spurs are still well below the luxury-tax threshold.
For the Raptors though, the modest increase in 2018/19 salary will have an impact. By my count, the club now has about $138.99MM committed to 13 players. That would result in a total tax bill of about $29.59MM, and that number will increase when Toronto fills out its roster with a 14th player.
A cost-cutting move is a possibility for the Raptors. C.J. Miles ($8,333,333) and Norman Powell ($9,367,200) became more expendable today with Leonard and Green joining the small forward mix, so perhaps Toronto will explore moving one of them. For now though, this projects to be one of the league’s most expensive rosters.
Impact on 2019/20 and beyond
While the Raptors added a little salary for 2018/19, they cleared their cap for future seasons in today’s deal. DeRozan remains under contract for $27,739,975 in 2019/20, with a player option worth the same amount in 2020/21, while Poeltl has a ’19/20 team option worth $3,754,886. Conversely, Leonard and Green are on expiring contracts.
Prior to today’s trade, the Raptors had $113.27MM in projected guaranteed money on their cap for 2019/20, with player options for Miles and Jonas Valanciunas bringing that number up to $139.62MM. In other words, the team was a strong bet to remain in the tax again next season.
By removing $31.49MM from that total in today’s deal, the Raps no longer project to be a tax team in 2019/20. They probably won’t have cap room, which would be a problem if Leonard walks. But the club would be loaded with expiring contracts in that scenario — by 2020/21, only Powell ($10,865,952) and OG Anunoby ($3,872,215) remain on the books, creating a ton of flexibility for Toronto to go in any number of directions a couple years from now if the Leonard experiment doesn’t work.
As for the Spurs, they’ve significantly reduced their potential cap flexibility for next summer, with their projected guarantees increasing from about $59.16MM to $90.65MM, by my count. That total doesn’t include Marco Belinelli‘s player option or Bryn Forbes‘ salary, since the exact details of those newly-signed contracts aren’t yet known. With a cap of $109MM projected for 2019/20, the Spurs may not end up having any real space available.
The Spurs’ 2020/21 outlook might not be impacted by the deal, since DeRozan and Poeltl can both reach free agency that year. However, if DeRozan exercises his $27,739,975 player option and the Spurs look to lock up Poeltl beyond his rookie deal, those deals would once again eat into the club’s projected space.
Photos courtesy of USA Today Sports Images. Salary information from Basketball Insiders was used in the creation of this post.
The Raptors and Spurs officially announced their blockbuster trade involving Kawhi Leonard and DeMar DeRozan today, issuing a pair of press releases to confirm the deal. However, the Raptors have yet to conduct a physical on Leonard, as ESPN’s Brian Windhorst noted during an appearance on Outside the Lines.
Windhorst suggests there’s a chance that the Raptors could waive Leonard’s physical, since they just want the two-time Defensive Player of the Year on their roster and may be willing to take a gamble on his health. Still, it’s a situation worth keeping an eye on. Last year, the Cavaliers and Celtics seemingly finalized their Kyrie Irving blockbuster before Isaiah Thomas‘ physical held up the deal for an extra week. I don’t expect that to happen here, and it’s even less likely that this trade falls through, but it’s not necessarily officially official until the Raptors make a call on that physical.
Here are many more reactions, notes, and updates on today’s mega-deal:
- Raptors president of basketball operations Masai Ujiri has a reputation for making bold decisions, but the team’s acquisition of Leonard is his boldest move to date, writes Josh Lewenberg of TSN.ca. As Lewenberg observes, Ujiri has long wanted to land a bona-fide superstar, and finally gets a chance to do so with his deal for Leonard.
- Spurs head coach Gregg Popovich informed Leonard’s camp of today’s trade early on Wednesday in what was called a “cordial” conversation, a source tells David Aldridge of TNT. According to Aldridge, Leonard isn’t thrilled about being sent to the Raptors for a few reasons, including the higher taxation rate in Canada — Texas, of course, has no state income tax.
- The Spurs‘ top priority in Leonard trade talks was landing an established scorer capable of averaging 20+ PPG, per NBA columnist Mitch Lawrence (Twitter link). The club achieved that goal by landing DeRozan.
- According to Sean Deveney of The Sporting News, there’s a “fine line between hope and desperation,” and Deveney believes the Raptors land on the wrong side of that line with this trade.
- The trade is “tantalizing on paper” for the Raptors, but includes plenty of red flags and comes at a cost, given DeRozan’s loyalty to the franchise, writes Michael Grange of Sportsnet.ca.
- The Raptors are sending a loud message that they’re not happy with merely being good and want to be great, says Tim Bontemps of The Washington Post.
- Longtime Spurs swingman Danny Green posted a goodbye message to the club and its fans today on Instagram, adding that he’s looking forward to his “next chapter” in Toronto.
- We passed along more notes on the Spurs/Raptors trade earlier today.
11:06am: The trade is now official, according to a press release issued by the Spurs.
8:07am: The deal will send Leonard and Green to Toronto in exchange for DeRozan, Poeltl, and a protected 2019 first-round pick, league sources tell Wojnarowski (Twitter link). Jabari Young of The San Antonio Express-News first reported Green’s inclusion in the trade (Twitter link).
Wojnarowski adds (via Twitter) that the 2019 first-round pick is protected from 1-20. If it doesn’t change hands after one year, it would turn into a pair of second-round picks instead.
The extra assets beyond Leonard and DeRozan look good for the Raptors, who will get to hang on their top two prospects in Anunoby and Siakam, and will only surrender a late first-rounder, at worst. Toronto will also add Green, a three-and-D wing who is a career 39.5% three-point shooter and is on a $10MM expiring contract.
Toronto will also create a modest trade exception equivalent to Poeltl’s $2.95MM salary in the deal.
7:15am: The Raptors and Spurs have reached an agreement in principle on a deal that will send Leonard to Toronto and DeRozan to San Antonio, reports Wojnarowski (via Twitter). According to Woj, there are more pieces involved on both sides, and players are still being informed about the deal. A trade call with the NBA is expected to happen later today.
4:53am: The Raptors are finalizing a trade to acquire Kawhi Leonard from the Spurs, Chris Haynes and Adrian Wojnarowski of ESPN report. San Antonio would receive a package headlined by DeMar DeRozan in the swap.
The Raptors and Spurs have been exploring such a trade for at least two weeks now, though Haynes adds that DeRozan was allegedly told during the Las Vegas summer league that he wouldn’t be dealt.
“Be told one thing & the outcome another,” DeRozan wrote in a story on his Instagram account early Wednesday morning. “Can’t trust em. Ain’t no loyalty in this game. Sell you out quick for a little bit of nothing.”
Neither Leonard nor DeRozan appears to be particularly pleased with the potential deal, with Haynes noting in a subsequent tweet that sources have told him that Leonard has no desire to play in Toronto. As ESPN’s Zach Lowe tweets, Leonard would risk fines and possible forfeiture of his 2018/19 salary if he’s traded to the Raptors and doesn’t report to the team, unless he can provide a legitimate medical reason.
The two clubs are said to have discussed several packages and a deal could be agreed to in principle as early as today.
With Leonard eligible to become an unrestricted free agent next summer, Raptors president Masai Ujiri is taking a substantial risk trading a committed All-Star for an outside player with eyes for Los Angeles. That said, the Thunder took a similar chance trading for Paul George last summer and it paid off when he re-signed long-term earlier this month.
Leonard, who has a 15% trade kicker, is set to earn approximately $23.1MM in 2018/19 (counting that trade bonus) before becoming eligible for free agency a year from now, so even if the Kawhi experiment doesn’t work, the Raptors could clear some long-term salary from their books in a deal. DeRozan will make $27.74MM annually for the next two years, with a player option worth the same amount in 2020/21.
Given the difference in salaries between the two stars, and the fact that the Spurs will likely receive another player or two in any deal, the Raptors may also take on another veteran to even out the ’18/19 money involved. Patty Mills ($11.57MM), Danny Green ($10MM), and perhaps even Pau Gasol ($16.8MM) would be candidates.
As we wrote yesterday, the supposed asking price for Leonard could be as high as an All-Star caliber player, high-potential young players, and draft picks. If DeRozan represents the first item on that list, it will be interesting to see what other pieces round out the offer. Toronto’s roster features a handful of intriguing young players, including OG Anunoby, Pascal Siakam, and Jakob Poeltl. The Raptors also control all their future draft picks.
At full health, a content, committed Leonard could easily justify such a substantial haul, but concerns about his quadriceps injury and his willingness to re-sign with a non-L.A. team trading for him may have diminished his value.
Although the Raptors have been prominently linked to Leonard of late, Shams Charania of Yahoo Sports notes in his own story on the potential deal that the Lakers, Clippers, Sixers and Celtics were said to be suitors as well. On Tuesday, we learned that the Nuggets, Suns, Trail Blazers, and Wizards also talked to San Antonio about a possible trade.
Given that he was limited to just nine games last season, and didn’t look like his All-NBA self, it’s hard to gauge exactly what the Raptors might expect to see from Leonard on the court. Still, he’s just one year removed from back-to-back finishes as a top-three MVP candidate and a member of the All-NBA First Team.
Those All-NBA nods allowed Leonard to qualify for a Designated Veteran Extension worth 35% of the cap with the Spurs. By the time he officially became eligible to sign such an extension this week though, the star forward’s desire to leave San Antonio was well known, making a new deal with the Spurs an extreme long shot — even if the club was willing to offer it.
Leonard will lose his eligibility for that five-year super-max deal – worth an estimated $221MM – if he’s traded. If he’s sent to Toronto and becomes a free agent next summer, Kawhi would be eligible for up to five years and nearly $190MM with the Raptors or four years and $140.6MM with another team, based on current cap projections for 2019/20.
In nine seasons with the Raptors, DeRozan has averaged 19.7 points and 4.1 rebounds per game. The 28-year-old has been named an All-Star in four of the past five seasons and played an instrumental role in Toronto’s rise up the Eastern Conference ranks the past half decade.
Per Wojnarowski (via Twitter), a Spurs/Raptors swap has been close for a few days, but has nearly fallen apart multiple times. Ujiri wanted to let DeRozan know about the impending deal himself late last night, according to Woj, who adds that DeRozan and good friend Kyle Lowry talked a few hours ago.
Photos courtesy of USA Today Sports Images. Luke Adams contributed to this post.