Trade assets for short ... or long-term ... rebuild

It's bad, really bad. But is it bad enough to start thinking about a rebuild? Not yet. However, it is bad enough to review what the Nets have if they wanted to either make big changes this season? Sure. We'd like to avoid the "R-word."

So, as Kevin Garnett said after the loss in Minnesota, "This is what it is. We created this monster and we have to deal with it. You have the business of basketball come into play, I’m sure. And management’s probably going to do what it’s got to do, and that’s out of our hands."

Short-term, they have some minor pieces they can move but it's hard to see them being able to get value for some of their big pieces or be willing to dump their younger players like Brook Lopez or Mason Plumlee or the rights to Bojan Bogdanovic for short-term relief. Andray Blatche can't be traded without his permission and that's unlikely since he would lose his Bird Rights if dealt.

At the moment, they have no first round picks to trade. They owe three of their first rounders to Boston and can't trade their two others in 2015 and 2017 because of the Stepien rule. Even if they could, both have protections: they must be swapped with Atlanta (2015) and Boston (2017) if the Nets have the higher pick.

Long-term, the Nets don't have a lot of flexibility but things could change. Paul Pierce is a free agent in June, and assuming the Nets don't extend him, that's $15.3 million off the cap. Garnett could retire, freeing up another $12 million. The Nets could make a couple of other deals to get under the luxury tax and make some moves in the off-season.  Could they trade Deron Williams or Joe Johnson and get value back?  Would they?

Let's hope it doesn't come to that. .

Cap Space:

They have none and are unlikely to have any for another two years, at least. 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 2012. The payroll jumped to $83 million when Andray Blatche's contract became guaranteed in January. Luxury taxes for last season totaled $12.9 million, the first time they had paid a dime in seven years.

That turned out to be nothing.

The went all in this summer, trading for Paul Pierce, Kevin Garnett and Jason Terry, signing or re-signing Andray Blatche, Shaun Livingston, Alan Anderson and Andrei Kirilenko and drafting Mason Plumlee. The payroll now hovers around $102 million and the luxury tax is likely to be $87 million ... or more than they paid out in salaries last season!

The Nets owe their current roster a grand total of $278.5 million in fully guaranteed deals over the next five years.including the 2013-14 season (down from $340.3 million last year). That's the second highest total in the NBA (surprise!), according to ShamSports. The Clippers owe $307 million. Yes! Even if you add the $8 million the Nets still owe Travis Outlaw, they can't catch Clippers.

One financial advantage from the Celtics trade: the Nets dumped Gerald Wallace's contract, with its $10 million salary in 2015-16. By doing so, that should help them avoid the dreaded repeater tax for that season.

The big problem being so capped out for so long goes beyond the luxury taxes, which Russian ownership seems to see as the cost of doing business, an investment. The Nets won't be able to accept any players sign-and-trade deals until the summer of 2015-16, unless something extraordinary happens, like Garnett retires. Nor will they have the full MLE or the BAE. They will have the mini-MLE, which should start at around $3.3 million. (The Nets can sign and trade their own free agents if they have Bird rights, as they did with Keith Bogans in the Celtics trade. In that case, they used the big number to make the deal work.)

Not a lot of flexibility there. Moreover, neither Garnett and Blatche can be traded without their approval.

Expiring contracts:

Last summer, the big expiring contract was Kris Humphries, who is being paid $12 million in 2013-14 by Boston. They also got value out of Keith Bogans who because he had been with the team two straight years was eligible for Early Bird rights. They signed him for $5.2 million and traded him to Boston to make the deal work.

This year, they have multiple expiring deals. Start with Pierce, who will make $15.3 million this year. Don't be surprised to see the Nets offer him a multi-year deal at the end of this season ... at less money ... if he improves.  His agent is Jeff Schwartz.  Because he is at the end of a multi-year deal, the Nets have his full Bird rights. That means they can re-sign him outside the salary cap. Will they?

Tyshawn Taylor and Tornike Shengelia have two-year guaranteed deals that expire as well.  Shaun Livingston is also an expiring contract with no options, team or player. If the Nets want to keep him, they will either have to give him the mini-MLE or he will have to accept a vets minimum deal plus 20 percent. His agent is Jeff Schwartz. The Nets have three players who are on two-year deals with player options in the second year: Andrei Kirilenko, Andray Blatche and Alan Anderson. Kirilenko is being paid under the mini-MLE, the other two are vets minimum deals.

Blatche, as always, is unique. He still has two years to go on his amnesty payments from Washington, this season and next. Between his Nets salary and amnesty payments, he is guaranteed $18.5 million over two years. Because he's in his second season with the Nets, he will have his Early Bird rights next summer. That makes him eligible for a four-year $25 million contract outside the salary cap. If he plays well again, continues to mature and is healthy, he could be in for a big payday. He'll only be 28. By holding his Early Bird rights, the Nets can pay him a competitive salary. And yes, if he opts out and signs with the Nets (or any other team), he still gets money from the Wizards in 2014-15.

The Nets also turn Taylor or Shengelia into larger contracts for trade purposes as they did with Bogans. Or they could offer them qualifying offers of $1.1 million for 2014-15.

The rest of the roster is on a variety of other deals. Here are the details as laid out by ShamSports. Deron Williams has four years and $81.6 million left on his contract with an early termination option in the last year; Joe Johnson, three years and $69.5 million left; Brook Lopez, three years and $47.2 million left, with a player option in the last year; Kevin Garnett, two years and $24.4 million left; Jason Terry, two years and $11.5 million left; Mirza Teletovic, two years and $6.6 million left; Reggie Evans, two years and $3.5 million left. Mason Plumlee is on a rookie contract which could pay him $6.4 million over four if the Nets exercise his third and fourth year options. Williams and Lopez have 15% trade kickers that would be paid by receiving teams.

A footnote: Last year, D-Will and JJ ranked #1 and #2 in guaranteed money owed. This year, they are #5 and #8. Chris Paul is #1, followed by Blake Griffin, John Wall, Dwight Howard, Williams, James Harden, Derrick Rose and Johnson.

Special situations:

What if Garnett decides to retire after this year with $12.3 million still on the books? Increasingly, that looks likely.  He almost retired last year and with things going as bad as they are, it wouldn't be a surprise. Does the last year of his contract simply go away? Once he puts in his retirement papers, he stops getting paid. Money comes off the cap.

What if Teletovic wants to go back to Europe? Euroleague teams must submit final playoff rosters the last week of February, around time of NBA trade deadline. It would involve a buyout. The Nets and whatever European team wanted to sign him would have to work out a deal. Note this, however: Teletovic gave up a small fortune to join the Nets, initially paying $2.1 million to Caja Laboral of Spain to get out of his contract, then agreeing to take a $6 million pay cut over three years when the Nets realized giving him the full MLE in 2012 would hard cap them. He settled for the mini-MLE to help the team. He's not going to walk away from more money. His agent is Jeff Schwartz, who originally brought him to the Nets' attention. Be better to trade him.

Draft rights:

The Nets still hold the rights to Bojan Bogdanovic, selected in the 2011 draft, and Ilkan Karaman, selected in the 2012 draft. Both play for Fenerbahce of Istanbul.

Bogdanovic, a 6'8" Croatian swingman, could arrive in the NBA for 2014-15, when he will be 25. As reported ad nauseum, he couldn't get out of his $2 million buyout with Fenerbahce this summer, scuttling the Nets plans to bring him over. Next summer, he will be a free agent. He has no buyout. He has told Croatian websites that he still wants to join the Nets and league sources have told NetsDaily they look forward to getting his signature on an NBA contract.

As a second round pick --#31 in 2011-- Bogdanovic can negotiate a contract outside the rookie minimums. Under the proposed deal he and the Nets had agreed to in early July, Bogdanovic reportedly would have been paid $3.2 million in 2013-13 and $10 million over three years. Since he will have no buyout this summer, will the Nets try to get him for a smaller package? Or did the Nets commit to the $9.9 million whenever he signs? We don't know. Agents do have a tendency to hold teams to handshake deals.

A bigger question is whether the Nets will be outbid by a European club ... and how he sees what happened to Teletovic, who is after all from the same town in Bosnia. (League sources don't see that as a much of an issue. Players see themselves as different, that is, better, than other players.)

Karaman, a 6'10" Turkish power forward, has an uncertain arrival date. He's 23. The Nets have not publicly talked about his buyout situation but he is quite a way from being an NBA quality player and in fact, he's barely on their radar. Moreover, he is still recovering from double knee surgery he had over the summer. His agent is Jeff Schwartz.

Draft picks:

The Nets have their own first round picks in 2015, 2017 and 2019 and none from other teams.

They traded their first round picks --unprotected-- in 2014, 2016 and 2018 to the Celtics. The 2015 and 2017 picks must be swapped if they are higher than the Hawks (2015) and Celtics (2017) picks.

They have only three second round picks through 2019. Here are the details on the second round picks:

--On Draft Night in 2011, the Nets sent their second round pick in 2014 and their 2010 first round pick (Jujaun Johnson) to Boston for MarShon Brooks.

--In the 2011 Mehmet Okur trade, the Nets sent their second round pick in 2015 to Utah for Okur.

--In 2012 Reggie Evans trade, the Nets agreed to swap second round picks in 2016 with the Clippers in return for Evans. If the Clippers pick is between #31 and #55, L.A. can swap it with the Nets pick if the Nets pick is higher. The Nets can still trade the pick if the other team is willing to assume the risk.

--In the 2012 Joe Johnson trade, the Nets sent their second round in 2017 pick to Atlanta. It wasn't included in the original deal but the league required it because of a CBA technicality.

--In 2018, the Nets have their own second round pick.

--In 2019, the Nets have their own second round pick.

Prior to the Deron Williams' trade, the Nets hadn't traded any of their own first round picks going back to 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, then traded their own first rounders in 2014, 2016 and 2018 to acquire Pierce and Garnett.

As Devin Kharpertian noted, the Nets picks traded away since 2010 have yielded: Derrick Favors, Enes Kanter, Damian Lillard, Darius Morris, Gorgui Dieng and Shane Larkin. In return, they have received Deron Williams, Gerald Wallace and Joe Johnson

Trade Exceptions:

The Nets have no trade exceptions. The Boston deal was arranged so the Celtics came away with a $10 million TE.

Mid-level and Low-level exceptions:

The Nets had a mini-MLE last year and used it to pay Teletovic. This year, they used it to pay Kirilenko. The Nets don't have access to the Bi-Annual Exception, which starts at $2.6 million because of the size of their payroll. Assuming they can't get under the luxury tax, they won't have one next summer either.

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-- $3.2 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 did not spend any of their $3.1 million limit in 2012-13. As of July 1, they have a new $3.2 million limit. The limit goes up $100,000 each year of the CBA.  Such cash considerations can be used to sweeten a trade or purchase a player's draft 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 million to buy the rights to Taylor and Shengelia. During that period, no owner paid out more. James Dolan of the Knicks is second.

Springfield Armor:

The Nets not control the NBA rights to anyone currently on the Armor roster, just their D-League rights. However, if they made a lopsided trade, they could use the player on the Armor to replenish their roster. The best prospects are bigs Dennis Horner and Willie Reed and swingman Adonis Thomas.