Money Troubles
Jeremy Cohen highlights some cash-strapped teams the Knicks could target for a possible trade. Plus, news and notes from yesterday.
Good morning!
Jeremy Cohen has been on a bit of a writing rampage, so for the second day in a row, today’s newsletter features a piece from him, this time on the recent ESPN story that many NBA owners are hurting where it counts, and specifically how the Knicks can take advantage. I also offer some of my own thoughts throughout.
Before we get to it though, a couple quick news and notes:
As was initially reported by Stefan Bondy last week, Kentucky Assistant coach Kenny Payne is being considered for a spot on Tom Thibodeau’s staff. According to Jack Pilgrim of Kentucky Sports Radio, Payne is under consideration not only for his stellar work with big men but also as a possible lure for former Kentucky stars like Devin Booker and Karl-Anthony Towns. This, understandably, drove many a Knicks fan up a wall yesterday.
A few things: Primarily, while it’s certainly possible that someone who reports on Kentucky sports has a source directly within the Knicks, my guess is this came from somewhere within UK basketball, so I’d take that for what it’s worth.
Second, this shouldn’t come as a shock to anyone who has been paying attention to the Knicks hiring practices over the last several months. Almost every front office addition, while talented and worthy in their own right (as is Payne, I’m sure), is known for their stellar ability to build relationships in and around the league. If you’re in for a penny, might as well go in for the pound. Plus, as I reported for SI.com last month and as Marc Berman noted a bit later, Devin Booker was already a name to keep an eye on.
Speaking of Berman, he interviewed Payne in mid-June about Kevin Knox, who Payne worked with extensively at Kentucky and still keeps in touch with. If you’re looking for another possible silver lining to the hire (and are a believer that Knox’s issues can be sorted out if he just gets his head right, perhaps with the help of someone he’s comfortable with), there it is.
Finally, as it pertains to KAT, while many joked about the possibility of a Thibs reunion in New York after what went down in Minnesota, never say never. On that note…
Rarely do I ever aggressively promote a podcast, but you’re going to want to check out my latest episode of the Hoops Spy. Adam Taylor and I interviewed Jon Krawczynski of The Athletic, who has been covering the Timberwolves for years, including during Thibodeau’s time there. He had some fantastic insight on Thibs’ run in Minnesota, including the truth about his practice habits, his effect on team culture, and what his relationship with Karl-Anthony Towns was really like (hint: it’s not nearly as bad as has been made out to be).
Give a listen on Spotify, iTunes, or anywhere fine podcasts are found (and if you like it, feel free to subscribe, give a rating, and/or leave a review. We’re brand new, and I’m told those things tend to help a lot at this stage of the game)
According to Steve Popper, the “Delete Eight” offseason activities, which have also been reported on recently by Rick Bonnell of the Charlotte Observer, could feature three weeks of “team OTA's” as opposed to a second bubble.
As I reported for SI.com earlier this month, the Knicks and at least one other team were seriously considering sitting out a second bubble anyway, so it makes sense that they’d be in favor of something more local and without all of the other teams there at once. Thibs in particular is counting down the minutes until he can get his guys in a gym, I’m sure.
Don’t forget to get your mailbag questions in to KFSMailbag@gmail.com before tomorrow at noon! I’m recoding a mailbag episode of the pod with Kris Pursiainen tomorrow, starting whenever he gets back from his paper route.
Speaking of people I’m much older than, Happy Belated Birthday, Frank Ntilikina!
Welcome back, Terry and Tray!
Congrats to Ian Begley on his new SNY show! Zach Lowe as a first guest? Not half bad!
Last but certainly not least, I’m THRILLED to report our final tally for the Higher Heights for America fundraiser pods as $705. THANK YOU once again to everyone who participated and also everyone who listened. ICYMI, here’s Part 1 and Part 2.
And without further ado, here’s Jeremy on how the Knicks can take advantage of the NBA’s current financial predicament…
How Can the Knicks Take Advantage of a Reeling NBA?
by Jeremy Cohen
There are a few three-word phrases that can inspire fear and terror.
For some, it’s being the first person to say “I love you” in a relationship. For others, it’s the crushing “Is it in?” For me, at least when it comes to basketball this week, it’s simple.
“Thank you, Windhorst.”
For weeks, we have been starving for any news related to future spending. While we still don’t have a clear picture on what the salary cap will be or where the Knicks will land in the draft, ESPN’s Brian Windhorst came through with an article on how cash-strapped teams are surviving COVID-19.
If you didn’t read the article, here are some takeaways.
The owners of the Warriors, as well as other NBA owners, are considering raising money to support themselves. Other teams may sue insurance companies that denied them pandemic-related claims (Rockets’ owner Tilman Fertitta has already done this).
One team executive believes that first round picks will be for sale in this draft.
One owner believes his team could lose $50 million next year.
Cavaliers’ owner Dan Gilbert is richer than we thought.
Clippers’ owner Steve Ballmer is even richer than before.
The Buss family, who own the Lakers, is relatively poor.
Fertitta took out an expensive loan with a high interest rate.
Pacers’ owner Herb Simon’s company has lost more than $25 billion in stock value since January.
Heat owner Micky Arison has seen his net worth decrease by $2.5 billion since March.
The energy industry has been hit hard by COVID, which impacts Thunder ownership, which is deeply involved in profiting off energy.
Let’s address each point and how it relates to the Knicks, shall we?
The Warriors have $150 million in commitments to Stephen Curry, Klay Thompson, Andrew Wiggins, and Draymond Green over the next few years. The Warriors aren’t trading Curry or Thompson, and the Knicks won’t want to touch the other two salaries with a ten-foot pole. Seriously, if you’re thinking about taking on Wiggins’ contract for Golden State’s 2020 first round pick, it’s not worth it, especially now that Tom Thibodeau is head coach of the Knicks.
Would the Warriors be interested in trading down with the Knicks? Perhaps attaching the Clippers’ first round pick and cash might be enough to move up three or so spots. In a normal year, such a deal would feel blasphemous. Now, maybe not so much.
(Also keep in mind here the lower cost of paying, say, the seventh pick than the third or fourth pick. That difference amounts to only about $2 million next season, but given the fact that the Warriors are deep into the tax, it would effectively be quite a bit more, and then there are the remaining years on the deal. It’s not absurd to think the right swap [I’d replace the Clips 1st with the Hornets 2nd in Jeremy’s scenario because the later means no guaranteed money and Golden State could then draft and stash someone] could easily wind up saving Golden State more than $10 million this season between salary and taxes. Even so, I can’t imagine they’d stomach the PR backlash that they saw Chicago get first hand a few years ago when the Warriors bought the pick that became Jordan Bell. Therefor, if the Knicks ever did something like this, my guess is that there would be a future draft asset going out in the deal, such as the 2023 Mavericks 1st - Ed.)
First round picks could be for sale, and if they are, the Knicks would be wise to jump on that. The CBA states that “Cash cannot be the only asset sent out in trade for a first round draft pick. In other words, teams can't 'sell' their first round draft picks, but they can sell second round picks, player contracts or draft rights.” Windhorst writes about how Rudy Gobert is the last first round pick to be sold, and while that’s technically true, the deal was Gobert for cash and a second round pick.
The Knicks have or project to have three excellent second round picks in the next two drafts but they could trade conditional second round picks of their own and call it a day (Shoutout Brock Aller and his magical pick protections). They also have the draft rights to players like Louis Labeyrie and Ognjen Jaramaz, each of whom can be used to grease the wheels in a deal. If the Knicks dealt Theo Pinson, his team option would have to get picked up next year, so Pinson isn’t as easy to deal like the assets previously listed, as he would count against the cap. With that said, if the Knicks took back a more expensive contract, Pinson could be used as salary filler.
New York has $5.6 million in cash that can be used as cash considerations. If the Knicks send out $1 million in cash and receive $1 million in cash, they still have only $4.6 million at their disposal. The Knicks used $1 million last year to acquire Ignas Brazdeikis, although that was under Steve Mills. I’m inclined to believe that he was not the brainchild behind that idea though. Also, because the salary cap (usually) resets on July 1st, that $1 million shouldn’t apply to this year’s draft.
If the Knicks fall in the draft and want to move up, they could use that money and those assets to purchase picks and send the assets to a team positioned above them. If the Knicks rise in the draft, they could still try to purchase picks and then package them with the Clippers’ first round pick and the Hornets’ second round pick for a better player. The Knicks also gained a trade exception worth $3,988,766 in the Marcus Morris Sr. deal, which means that they can absorb any salary worth that number or less.
An owner losing $50 million in a year? Ouch! Dolan is heavily invested in the entertainment market, which has been decimated by COVID. The good news is that Dolan has reportedly shown zero signs of limiting expenditures, seeing as how he has added people around Rose and the Knicks have hired the head coach who will likely cost the most.
(And over more years than they would have liked to go on the contract - Ed.)
Gilbert being richer than we thought means that the Cavaliers may be less likely to trade down. Although seeing as how talent-strapped Cleveland is to begin with, the odds of them trading down were probably slim anyway.
Ballmer being the richest owner already means he has the ability to give Morris Sr. a multi-year deal. The Clippers can give Morris Sr. up to 120% of what he’s earning this year, which would be crucial towards keeping Kawhi Leonard and Paul George happy. Similar could be said of Montrezl Harrell but he’s likely lower on the priority list. The Clippers should try to re-sign Morris Sr. and Harrell, because if they don’t, their options for acquiring talented players are limited due to their salary commitments.
The Buss family being poor compared to their fellow owners is more about how long the effects of coronavirus last. I have no doubt that the Lakers can afford to re-sign Anthony Davis next season. If the NBA is still feeling the burden of coronavirus in 2021 though, that’s a different story. It’s hard to believe the Knicks wouldn’t want Davis, so using their assets to put themselves in a better position to get him and another star in 2021 is probably an idea they do not want to discard right now.
The Lakers, meanwhile, will have to figure out a way to entice Davis to stay long term. That’s hard to do considering the 2021 Lakers project to have two players under contract: a soon-to-be 37-year old LeBron James (assuming he opts in) and their 2020 first round pick. Those two players and Anthony Davis’ cap hold project as around $80 million in salary, which gives the Lakers little room to assemble a competitive roster depending on what the salary cap is.
Tilman Fertitta sucks. That’s all I have to say about that.
If the Pacers want to slash as much payroll as possible next year, they would still be at $123,348,594 in salary commitments. They traded their first round pick to the Bucks in a sign-and-trade for Malcolm Brogdon. I would love to see TJ Leaf’s expiring deal and a future protected first round pick for a second round pick and cash. Leaf should get some playing time in the bubble with Domantas Sabonis sidelined with a foot injury. As mentioned, in any other year, such a trade scenario would be considered crazy. Maybe this type of deal is still unrealistic, but once again, their owner’s company (which operates malls) has lost $25,000,000,000 in stock value in six months. I don’t see too many people going to malls right now or in the near future!
(I have no earthly clue if either the Knicks or the Pacers would consider a swap of Knox and cash for Aaron Holiday and the remaining two years on Jeremy Lamb’s deal, but if New York parted ways with all of their partially guaranteed contracts, they could easily take in the salary. This would be selling massively low on Knox and betting big on Holiday as a league-average point guard sooner rather than later - a designation he hasn’t earned, to be clear - but I’d do my homework on Jrue’s little brother. He’s good. Regardless, they’re almost certainly not taking on ‘21-22 salary, and the final year Lamb’s contract is fully guaranteed for $10.5 million, so this is probably mute - Ed.)
Arison and the Heat will maintain flexibility and go after Giannis Antetokounmpo. If anything, coronavirus is merely another reason why they are likely to only give out short term contracts this offseason.
If the Thunder want to slash as much payroll as possible next year, they would be resting right around what this year’s salary cap is, which is $109,140,000. I don’t see any team willing to take on Chris Paul’s contract right now. If the final year were a team option instead of a player option, absolutely. As it stands now though, the Knicks would be punting on 2021 for Paul in his mid-thirties. No thanks.
Danilo Gallinari is a different story though. If the Thunder would like to keep costs low, and if no team is willing to offer him a multi-year deal, New York would be the perfect place for him. The mix of shooting, passing, playmaking, and high basketball IQ would complement the young core extremely well. However, I’m not sure how Gallinari, who has eclipsed 70 regular season games once since 2010, would hold up with Thibodeau as coach.
(Other than Miami, I don’t see the team that would be willing and able to give Gallo both a one-year balloon payment in the $20 million range and a starting spot, which is why I think there’s a decent chance he ends up back where he started his career next season - Ed.)
This could be an extraordinary offseason for the NBA. With so many teams and owners facing financial ruin, the Knicks have opportunities to capitalize. You know how the narrative is that every presidential election is the most important election of our lifetimes?
Well, this upcoming offseason is the most important one in Knicks history.
(Until the next one, of course - Ed.)
That’s it for today! See everyone with at least one more newsletter later this week, likely on Friday. #BlackLivesMatter