As the Memphis Grizzlies and Cleveland Cavaliers completed a deal Tuesday that will send three players and a future first-round draft pick to Cleveland in exchange for forward/perennial D-Leaguer Jon Leuer, we must all become more aware of the bigger picture at stake.
The clock is expiring on the NBA’s practical, dollar-for-dollar luxury tax era.
The rules are changing, and these deals will become more of the norm than the exception.
It appears as if Cavaliers GM Chris Grant fleeced the Grizzlies for a formidable big man, Marreese Speights, and rotation guards Josh Selby and Wayne Ellington with a protected first-round pick to boot. Sheridan called it a heist, with some bandit art thrown in.
But as you peal off the layers, it becomes obvious that this was a business decision by Memphis, a move that shed $6 million in salary in order to get under the luxury tax threshold.
Memphis’s new ownership has been reevaluating its business model and working hard on a contingency plan to reduce salary. In the short-term, this trade will allow them to keep Rudy Gay and Zach Randolph on the books for a playoff run this year. In the long-term, this is just the first step to not becoming a perennial tax team.
Between Gay, Randolph, Marc Gasol and Mike Conley, the Grizzlies owe nearly $59 million next year. The league salary cap set to kick in July 2013 will be around $60 million, and a harsher luxury tax penalty will begin.
Details on that below.
Simply put, somebody had to go.
To the basketball mind, this does not make a lot of sense. Memphis is one of the few teams on the cusp of an NBA title run. Currently the NBA’s second-ranked defense, they bring an unparalleled intensity to the table in an offensively driven Western Conference. Breaking up their core-four (or Tony Allen) would likely strip any chance Memphis has at a title run in the immediate future .
It’s no secret that the NBA is a copycat league. As everybody works towards the same goal it becomes apparent over time that certain models are going to work better than others. When one formula works, you’ll find many others trying to mimic it in the hopes of the same success.
Many believe that there are currently two different successful NBA formulas being emulated right now.
There is a long-term model which consists of building through the draft, getting a lucky ping-pong bounce and landing a Hall of Famer – or two – as the San Antonio Spurs and Oklahoma City Thunder have done, then filling in the rest of the puzzle with complimentary role players and veterans.
The short-term, superstar triumvirate model is the most recent archetype of NBA success recently defined by the Boston Celtics in 2007.
The Heat, Knicks, Clippers, Nets and Lakers have since tried to replicate that success by pairing a triad of stars together in hopes of competing for a title instantaneously.
If a team is currently not navigating down one of these two paths, they’re stuck in NBA purgatory, circling the block until they can definitively program their Garmin GPS. The Grizzlies are just that, a nitty-gritty team laden with a nice core of sub-stars with a small window for success because they were caught in-between models.
Memphis landed Rudy Gay and Mike Conley through the draft and brought in Marc Gasol and Zach Randolph via trades and free agency. All have developed into good-but-not-great players with superstar price tags.
Like Memphis, all teams will have to reevaluate their business models to avoid the luxury tax, unless of course they have an owner with Prokhorovian deep pockets or are a perennial title contender.
Since the luxury tax was introduced in the 1999 collective bargaining agreement, the dollar-for-dollar tax system allowed the rich to conquer.