If You Do the Math, CP3 to the Knicks Is Possible

By Moke Hamilton, Special to TKB

You down with O.P.P.?

Other people’s players?

Yea, you are.

So that is why—despite the Knicks turning in their best season since 1996 and grabbing their first Atlantic Division title since 1994—Knicks fans are quietly reliving their elementary school math classes. Adding two and two together, subtracting a long-term extension and calculating whether (and how) the Knicks can some way end up with Chris Paul.

The short answer is yes, it is possible, though highly improbable.

How improbable?

Paul would likely have to be willing to accept less than the \$18.7 million max. salary he could earn under the first year of his new deal. The Knicks would have to give up several players they would probably rather keep, and the Clippers would probably have to agree to a trade that may not suit them.

Maybe all of the above.

The Finances

Of all financial mechanisms in the 2011 CBA, the most important, in my opinion, is the “apron amount.” Most fans know, generally, what the “salary cap” is. Fewer know what the “luxury tax threshold” is and that is mainly because,u p until the 2011 CBA, the luxury tax threshold was not really important.

Today, however, a number of restrictions are placed on teams with high payrolls, which makes the tax threshold and the apron amount vitally important.

Wait, what’s the apron amount?

Good question. The apron amount is \$4 million greater than the luxury tax threshold. So, for all intents and purposes, there are three important numbers to keep in mind. (1) The salary cap, (2) the luxury tax threshold, and (3) the apron amount.

Since the apron amount is a derivative of the tax threshold, all you need to remember is \$4 million. Why is it \$4 million? Because the league and the NBA players union agreed to that number, that’s why.

For the 2012-13 NBA season, the salary cap was set at \$58.04 million. The luxury tax threshold is \$70.3 million. By definition, the apron amount is \$74.3 million.

We will not know what these numbers are for the 2013-14 season until somewhere around July 10, 2013. That is when the NBA usually completes the financial analyses necessary to set the numbers. But for now, let’s assume that the league collectively made a lot of money during the 2012-13 season, and let’s assume that the salary cap for the 2013-14 season will be \$60 million and the luxury tax threshold will be \$72 million. By extension, the apron amount would be \$76 million.

Under the 2011 CBA, the rule is simple: beginning July 1, 2013, a team cannot acquire a player who is being signed-and-traded if the team’s payroll would exceed the apron amount after the trade is completed.

The Knicks Payroll

For the 2013-14 season, the Knicks currently have \$75.7 million in guaranteed salaries committed to nine players—Carmelo Anthony, Amar’e Stoudemire, Tyson Chandler, Raymond Felton, Steve Novak, Marcus Camby, Jason Kidd, Iman Shumpert and James White.

They will have the 24th pick in the 2014 NBA Draft, and that pick’s first-year salary will eat up \$997,300 worth of payroll until signed.

So, as of right now, we can safely say that the Knicks will have \$76.7 million in guaranteed salaries committed to ten players.

It is very important to note that J.R. Smith has a player option on the final year of his deal, and that option is worth \$2.9 million. If Smith opts in to his deal, the Knicks payroll would be about \$79.6 million. However, the prevailing sentiment is that Smith will opt out, so we will function under that assumption for now.

The other five Knicks players—Quentin Richardson, Earl Barron, Kenyon Martin, Pablo Prigioni and Chris Copeland—will all be unrestricted free agents following this season. If the Knicks wanted to pursue a sign-and-trade for Paul, they could walk away from all five players with no money counting against their cap.

How It Could Happen

It is possible for the Knicks to acquire Chris Paul in a sign-and-trade agreement as long as, after the trade, their payroll is less than the apron amount. Since this restriction applies AFTER the trade is completed, we’re really asking whether it is possible to complete a sign-and-trade where the Knicks finish with a payroll below \$76 million.

The math is straightforward. To get from their projected \$76.7 million to \$76 million while adding Paul, the Knicks would have to send out at least \$700,000 more than they take back. Paul is eligible to earn a first-year salary of \$18.7 million, and is likely to want to maximize his earning potential wherever he goes.

In other words, if Paul is to be paid his maximum first-year salary, the Knicks would have to send out \$19.4 million in the trade, and doing so would be difficult (more on that in a bit).

If, however, Paul was willing to accept a lower salary—say \$15 million—then the Knicks would only have to send out \$15.7 million in salaries.

Since Paul is a free-agent, he could, in theory, accept less money than he is eligible for, and doing so could help to facilitate the deal.

Scenario A: If Paul wanted his max. salary, the Clippers would have to take back \$19.4 million worth of salaries from the Knicks. The toughest part for the Knicks would be finding \$19.4 million worth of salary that the Clippers would want to take back in return.

If the Clippers were willing to take Amar’e Stoudemire and his \$21.7M salary for Paul, the trade would work, easily. But that is not likely.

That is why Chandler would have to go in any Paul deal. Again, it’s math.

Chandler will earn \$14.1M next season. Mathematically, it would be impossible for the Knicks to send the Clippers \$19.4 million without including Chandler. Even with him in the deal, the Clippers would have to accept at least two of the following players to get to \$19.4 million and make the salaries match: Felton, Camby, Novak, Kidd and Iman Shumpert.

Of those players, Felton and Shumpert are probably the best values, and it is likely that, if forced to choose from that pool, the Clippers would want them.

Is Paul worth Chandler, Felton and Shumpert? Especially if J.R. Smith bolted via free agency?

Again, not my decision to make, but since we are talking about possibilities, you should know that it is possible that Paul would cost that much.

If Paul agreed to accept \$15 million instead of his max. of \$18.7 million, the Knicks would only need to send the Clippers \$15.7 million in the trade.

That is a more manageable number. But again, even in such an instance, Chandler would have to go. The bright side (for the Knicks) is that the deal could happen with only one additional player from the Felton, Camby, Novak, Kidd and Shumpert pool.

Scenario B: Before executing their trade with the Clippers, the Knicks could trim their payroll by executing a separate trade with a team under the salary cap. A team under the salary cap could receive a player from the Knicks without the Knicks having to accept a player in return.

In theory, such a move could reduce the Knicks payroll (without Smith) from \$76.7 million to somewhere closer to \$72-\$74 million—depending on whom they trade.

Though the difference does not seem great, every little bit counts here, especially since Paul will probably want to maximize his earning potential.

If done, the amount the Clippers would need to take back in the trade would be reduced.

Scenario C: Pretty much the same as Scenario A, except that the Knicks could turn this into a multi-team trade that ends up with them getting Paul. Though it would be easy to find a team that is interested in Chandler, the Knicks would still have to send out at least \$700,000 more in salaries than they were acquiring because, again, they would have to be under the apron after the trade was completed.

At the End of the Day…

– There is a huge difference between “possible” and “impossible” and between “probable” and “improbable.” At the end of the day, few things are actually impossible; we just tend to designate things that are highly improbable as being impossible. Our purpose here was mainly to address whether or not it is possible for the Knicks to acquire Paul in a sign-and-trade arrangement.

The answer to that question is yes — it is possible.

– There are a lot of unknowns here. We do not know what the luxury tax threshold will be. We do not know if Smith will opt out of his contract. We do not know if Paul would be willing to accept less than his maximum salary. Heck, we do not even know if the Clippers would be willing to entertain the idea of trading Paul.

– By rule, any sign-and-trade deal must be at least three years in length. For those wondering if Paul could take a very low salary on a one-year deal to help facilitate the trade and then re-sign a max. deal with the Knicks next summer after playing one season for them, the answer is no.

– By rule, the most Paul could receive in a sign-and-trade deal is a four year deal worth about \$80 million—the same he would be eligible for if he signed outright with a team with cap room. Under the 2011 CBA, you can no longer be signed-and-traded and still get a five-year deal.

– Paul’s max. deal with the Clippers is five years, \$107.5 million. So, even if the Knicks and Clippers were able to come to terms on an agreement, Paul would have to leave at least \$27.5 million on the table this summer. That is very risky. He would have to really, really want to be a Knick.