Your Handy NetsDaily Trade Toolbox - II

Jeff Zelevansky

The trade deadline is now two weeks away. So, trade speculation is on the rise, particularly with Kris Humphries.

To help fans understand what the Nets have in assets, we offer this friendly toolbox, which we will update a couple of times before the clock strikes 3 p.m. on February 21. This time, we're updating sections on Draft Rights and Draft Picks and adding more precise language on sign-and-trade possibilities. Read it before you venture into the addicting darkness of the ESPN Trade Machine. (We're not linking to the trade machine. No need to encourage bad habits.)

It's so much easier to do this report nowadays. In the past, we had to take out our calculator and Larry Coon's CBA FAQ to figure out how much under the cap the Nets would be. Not a problem now. They're so far over the cap and luxury tax threshold, it doesn't matter! In fact, it 's likely that NO team in the NBA owes more to its players long term than the Nets, at $338.6 million.

The Nets have all their own first rounders through 2019 but no other teams'. It was recently disclosed that the Hawks have the right to swap picks with the Nets in 2014 and 2015 as part of the Joe Johnson deal. That could devalue the picks in trade discussions.

The Nets have dealt all their own second rounders through 2017. (They have the right to swap second round picks with the Clippers in 2016, as part of the Reggie Evans deal.) Since teams can only trade picks six years out, their 2018 and 2019 second rounders are the only second rounders they can deal. They can, as they did in the 2011 and 2012 drafts, buy picks. Those three second rounders, used for Bojan Bogdanovic, Tyshawn Taylor and Toko Shengelia, cost the Nets $5 million total.

Cap Space:

They have none and are unlikely to have any for another three years. They went from $40+ million under the cap to $11.6 million over the luxury tax threshold in a matter of days back in July. After Andray Blatche contract became fully guaranteed in January, the Nets are at $83.1 million, meaning they will have to pay $12.9 million in taxes this season unless something dramatic happens. (Waiving Childress and picking up, then dropping Damion James on a 10-day was not dramatic. The two were paid a total of $490,000.) It's the first time since 2003-04 that the Nets will have paid any luxury tax.

The Nets owe their current roster a grand total of $340.3 million over the next five years, which is the highest total in the NBA. And that doesn't count the $12 million still owed Travis Outlaw.

The big problem being so capped out for so long goes beyond the luxury taxes the Nets will have to pay, which Russian ownership seems to see as the cost of doing business, an investment. The Nets, for example, won't be able to accept any players sign-and-trade deals this summer, barring some extraordinary salary cutting...which is extremely unlikely. (The Nets can sign and trade their own free agents.)

Expiring contracts:

The Nets have six players on minimum deals: rookies Tyshawn Taylor and Toko Shengelia plus veterans Jerry Stackhouse, Keith Bogans, C.J. Watson, and Andray Blatche. Taylor and Shengelia have two-year guarantees. Watson has a two-year deal with a player option in the second year. Bogans and Stackhouse are on one-year contracts while Blatche only became guaranteed deals on January 7. He celebrated that night, you might recall. Blatche is owed amnesty clause payments from the Wizards totaling $23 million, including this year.

The rest of the roster is on a variety of other deals. Counting this year, Deron Williams has a five-year, $98.8 million contract with an early termination option in the fifth year; Brook Lopez has a four-year, $60.8 million deal with a player option in the fourth year; Gerald Wallace has a four-year, fully guaranteed $40 million deal; Kris Humphries has a two-year, fully guaranteed $24 million deal; Mirza Teletovic has a three-year, fully guaranteed $9.8 million deal; Reggie Evans has a three-year, fully guaranteed $5.1 million dollar deal and MarShon Brooks remains on his rookie contract, getting $1.16 million this season and assuming the team picks up his option, $4.5 million over the next three years. Williams and Lopez have 15% trade kickers.

Blatche's situation is unique because of his amnesty situation. Blatche is making more than reported on salary websites, the result of a complicated NBA formula that somewhat penalizes teams that amnesty players while at the same time providing more money to the players themselves.The formula, provided NetsDaily by a league source, also would seem to give an advantage to a team offering Blatche the mini-MLE or more this summer, when Blatche becomes an unrestricted free agent. All this becomes increasingly important as Blatche continues to play well and increases his value. For more, read here.

Draft rights:

The Nets hold the rights to Bojan Bogdanovic, selected in the 2011 draft, and Ilkan Karaman, selected in the 2012 draft.

Bogdanovic, a 6'8" Croatian swingman, could arrive in the NBA for 2013-14, when he will be 24. His agent reportedly wants him in the NBA earlier rather than later. However, and it's a big one, Bogdanovic's arrival depends on him taking care of a big buyout. Before the 2011 draft, he signed a three-year deal with Fenerbahce Ulker of Istanbul, because he felt loyal to the team's Croatian coach (who was then fired after his first year.) The contract has an "NBA out" in July 2013. It's very expensive. The buyout is 1.5 million euros or two million dollars, of which the Nets can pay only $570,000. The Nets had hoped they could work a deal with the Turkish club and get him here quicker, but it didn't work out.

As a second round pick, Bogdanovic can negotiate a contract outside the rookie minimums. Considering that he was the first pick of the second round (and would have certainly gone higher except for his deal with Fener), he's likely to want an initial contract with a first year salary of several million dollars to pay back his buyout as well as competitive salary. The Nets are likely to have only the mini-MLE of $3.1 million to pay him and other free agents ... including Blatche, if that's what he wants. He could be more valuable as a trade asset. Another team with more cap flexibility might have an easier time signing him, as we discussed here.

Karaman, a 6'10" Turkish power forward, has an uncertain arrival date. He's 22. The Nets have not publicly talked about his buyout situation although it's been reported that he, too, has 2013 buyout. Considering he was drafted at #57, he is not likely to get much of a contract. Jeff Schwartz, who represents Williams, Teletovic, Stackhouse and Taylor, also has Karaman as a U.S. client. Although the Nets surprised draftniks by taking him, Karaman has improved this year, making the pick look smart. He too would have to be paid out of the mini-MLE or accept the rookie minimum of a little less than $500,000 which is considerably less than what he's making in Turkey. What that means is he is unlikely to show up for a while.

Draft picks:

The Nets have all their first round picks going forward, from 2013 through 2019, but none from other teams. On the other hand, they have no second round picks until 2018. Here are the details:

--In 2013, the Nets have their own first round pick but sent their second round pick to Minnesota along with a reported $1.5 million in cash for Bogdanovic on Draft Night in 2011.

--In 2014, the Nets have their own first round pick but sent their second round pick and their 2010 first round pick (Jujaun Johnson) to Boston for MarShon Brooks, also on Draft Night in 2011. The Hawks have the right to swap first round picks with the Nets, as part of the Joe Johnson deal. That reduces its value.

--In 2015, the Nets have their own first round pick, but sent their second round pick to Utah for Mehmet Okur. The Hawks have the right to swap first round picks with the Nets, as part of the Joe Johnson deal which reduces its value.

--In 2016, the Nets have their own first round pick, but agreed to swap second round picks with the Clippers in return for Reggie Evans. If the Clippers pick is between #31 and #55, they can swap it with the Nets pick.

--In 2017, the Nets have their own first round pick, but sent their second round pick to Atlanta in the package for Joe Johnson.

--In 2018, the Nets have their own first and second round picks.

--In 2019, the Nets have their own first and second round picks.

Prior to the Deron Williams' trade, the Nets had not traded any of their own first round picks since 1999, preferring to keep their picks and trade those acquired from other teams. Under Billy King, they traded their own first rounders in 2011 and 2012 to acquire Williams and Gerald Wallace.

Trade Exceptions:

The Nets received two trade exceptions from the Gerald Wallace trade, a $3 million exception and a $1.3 million exception. Part of the larger TE --$1.62 million-- was used to sign Reggie Evans. That leaves $1.38 million from the first TE and the full $1.3 million on the second. They expire at the deadline. Considering how small the exceptions are, it's unlikely either will be used. They can be used to grab a player off waivers as well as in a trade. The TE's have a small additional cushion of $100,000 if needed to match salaries or grab a waived player. (The Nets had a $1.3 million trade exception from the Terrence Williams trade which they never used. It expired last season.)

Mid-level and Low-level exceptions:

The Nets had a mini-MLE this year and used it to pay Teletovic. Next year the Nets are unlikely to have anything more. By going way over $74 million in salaries, the Nets can only use up to $3.09 million out of the MLE, thus the "mini-MLE." Also, teams over that figure cannot take advantage of the Bi-Annual Exception, which starts at $1.96 million. Nor can they accept players in sign-and-trades. They can send them out, but not take them in.

Cash Considerations:

Although the Nets have the richest owner in the NBA, new restrictions on cash considerations limit how much Mikhail Prokhorov can spend in deals. Under the new CBA teams are limited to sending --or receiving-- $3 million in cash during the fiscal year, July 1 through June 30. Since the Nets hadn't paid out any cash since June 27,2011, they were able to buy second round picks in the 2012 draft, paying Portland $2 million for the rights to the #41 pick, Tyshawn Taylor, and paying Philadelphia $750,000 for the rights to the #57 pick, Toko Shengelia. They now have until June 30 of this year to spend another $3 million. Such cash considerations can be used to sweeten a trade or purchase a player's rights but the Nets would prefer to hold on to the money and use it on Draft Night.

Since he bought the team, Prokhorov has spent about $11.75 million in cash: $3 million in the Yi Jianlian salary dump; $3 million to facilitate the Deron Williams trade; $1.5 million to buy the rights to Bojan Bogdanovic and the $2.75 millionto buy the rights to Taylor and Shengelia. During that period, no owner paid out more. James Dolan of the Knicks is second.

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