Transcript of Explain One Trade: All about the possible Lauri Markkanen - Warriors trade | with cap expert Perks
Transcript of Explain One Trade: All about the possible Lauri Markkanen - Warriors trade | with cap expert Perks
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Eric Apricot and Perks from GSW Reddit delve into the complexities surrounding a potential trade involving Lauri Markkanen. They examine the rumored trade packages, the valuation differences between the Warriors and Jazz, and the strategic considerations of both teams. The conversation covers historical trades, the economic incentives of the new CBA, and Markkanen's contractual options. Tune in as they assess the likelihood of a blockbuster deal and its implications for both franchises.
00:00 Introduction and Guest Introduction
00:07 Lauri Markkanen Trade Speculations
01:04 Trade Valuations and Negotiations
02:09 Warriors and Jazz Motivations
03:32 Gripes about Danny Ainge
04:56 A Fair Estimate of Going Rate for Blockbuster Trades
06:40 Impact of Kuminga's Extension and the Salary Floor
10:01 The Magic Date of August 6th
13:22 Lauri Markkanen's Contract Scenarios
19:03 Will This Drag Out to August 6 so Lauri Markkanen Can Re-negotiate?
22:30 Is the Warriors Offer Enough?
25:53 Conclusion and Sign-Off
Transcript
Eric: Hello, everybody! This is Eric Apricot, and I'm joined by Perks, from GSW Reddit.
Okay, so the big shadow over all of our conversations is Lauri Markkanen's shadow. A seven foot, slightly injury prone shadow.
Perks: You've heard some of these reported packages, right? What do you feel like is gonna be the final price here if a deal gets done?
Eric: I'm sure that I won't like it, whatever it is.
Perks: Absolutely.
Eric: And no Warriors fan will like it, because just my experience, I've polled lots of trades amongst Warriors fans and other fans, and I feel like we always overvalue our assets by about one to one and a half first round picks.
Whatever the deal is.
Like, this may be a bad example, but when we were trading D'Angelo Russell for Andrew Wiggins, I was like, what? You got Wiggins and only one draft pick? One first rounder? That's crazy. I was expecting at least three first rounders just to take on the worst contract in the league, and D'Lo is like an all star, but, that, that wasn't his value at all.
Trade Valuations and Negotiations
Eric: You've probably thought very carefully about what the going rate is for these kinds of moves, but it feels like that recently we had the Bridges trade, and that was something like four first rounders and a couple of decent players. And so I feel like that's probably what Ainge, oh, I guess it's actually been reported that Ainge wants more or less Kuminga and Podziemski and three or four first rounders and two or three swaps.
Perks: Yeah, as far as what I know I think Shams reported that the Warriors have offered Moody, two firsts, two swaps, and multiple seconds, right? So that's about let's say if Moody we classify as a late first rounder, that's about five ish picks, right? And then we've also heard from Shams that the Jazz are asking for Podz, three Warriors firsts and four Warriors swaps and a bunch of second rounders.
So that's, if we classify Podz as a good first round pick, that's about what, maybe eight firsts they're wanting. So that's a bit of a valuation difference there.
Eric: There's kind of a gap there.
Perks: Yeah.
Warriors and Jazz Motivations
Perks: And the thing here is historically, the Warriors and the Jazz have both been teams that are very firm in their evaluations of their players, so I think they will both find it hard to try to find a compromise and concede in terms of their value.
I don't think the Warriors are super amenable to the idea of including Podz or JK into these deals, especially if the Utah doesn't lower the pay compensation they want for Lauri. Same way, again I don't think the Jazz are looking to necessarily lower their price because they don't have to.
But at the same time, I do feel like there should be a motivation on both sides to get a deal done here, specifically for the Warriors, right? You have Steph, he's in the twilight of his career. He's a generational talent. Regardless of what happens, you're probably not going to have a good team for the next decade after he leaves.
So it kind of makes sense from their standpoint to try to maybe overpay slightly on terms of what you're comfortable with to get someone like Lauri to pair with Steph and really try to go for a championship these last couple of years. And again, as we talked earlier about Utah, for them, there should be a motivation to try to sell high on Lauri and get as many assets out of it as possible because you're a rebuilding team right now.
You should look at what the Nets are doing. They sold high on Mikal and they're looking to rebuild and try to get a generational talent to build a team around. So I think Utah should be looking towards that as something for their team building direction.
Gripes about Danny Ainge
Eric: I don't have a lot of faith that Ainge is going to do it. I feel like
Perks: Yeah, it's tough to think he would.
Eric: I feel like his track record is that he wants to collect assets. And he minimaxes his trades to get the most assets possible, regardless of whether it leads to a winning team. This is just my side gripe, but I just have a longstanding grudge against Ainge as a GM, cause during the Warriors dynasty, the Celtics were almost the only team in the Eastern Conference that could really threaten LeBron's Cavaliers.
And they were clearly one player short. And Ainge had all these assets because he ripped off the Russian owner of the Nets. And he would just never do any of the trades for these stars that would come on the market. And then after the trade didn't happen, he'd leak to the press that, oh, they made this great offer and it was refused.
So it's just really frustrating that it just felt like Ainge had the assets to go in and have the Celtics really challenge LeBron's Cavaliers, and instead he just hibernated and let that be the cakewalk to the finals for LeBron. While the Warriors were fighting for their lives against all these all time great teams, at least Houston had the guts to challenge the Warriors and go in on that.
Anyway, I have this long standing annoyance with Danny Ainge. I just have this mental model that he's all about winning the trades and not about building the team.
A Fair Estimate of Going Rate for Blockbuster Trades
Perks: Let me ask you this, because I've been looking into kind of what the pricing has been for all these blockbuster trades, like I think of like Mikal Bridges, and Rudy and Donovan when Utah sold them. And then Kevin Durant. And from what I can gather is usually somewhere about six quality assets, including like intriguing young players and like first round picks.
And for me, that six quality assets, I think would come down to something like Moody, Podz or Kuminga. And then on top of that, I'd probably throw in about four picks.
Some protections on those at some level, but either first rounders or swaps, probably later, when Steph is gone in like the 2028 or the 2030 pick, the Warriors still have that top 20 portion of. So in my mind, I think for a deal to get done, the Warriors would have to include something like Kuminga, Moody, a 2028 first, the rest of their 2030 first, and then two swaps in there.
Do you think that's something that Utah, specifically Ainge, would accept?
Eric: I think not. I feel like that's a really good estimate, and I feel like that's too much for the Warriors and too little for Utah. And I think that's a realistic amount for what this kind of trade should be. Cause if Lauri Markkanen really is good enough to turn the Warriors into contenders with Steph, say, then he's worth it.
Podz, Moody, Kuminga, they all have potential, but they're just not all the way there yet. But from Ainge's point of view, Moody and Kuminga are about to want massive extensions, right? So that's not all that appetizing and I don't think—
Perks: yeah, I do have a point on that. Obviously Podz is attractive. He's a good player. He's on a good contract and that makes sense.
Impact of Kuminga's Extension and the Salary Floor
Perks: But at the same time, I don't know if I necessarily buy that Utah isn't interested in Kuminga or to a lesser extent Moody, because yes, you have to pay those guys. But they have to reach the salary floor anyway.
Eric: Quick technical question: so there is a salary floor. Every team has to spend some minimum amount on their roster. My memory, tell me if this is right, is that if you just don't spend it, then whatever you should have spent just gets divvied up among the players on your roster.
Perks: Yeah. So that used to be the case, but they actually changed that in the new CBA because they wanted to penalize slash incentivize teams from cheaping it out on their rosters. So what actually happens now is if teams don't meet the salary floor by the first game of the regular season, they do not receive a share of the luxury tax payout.
So for those who don't know every team who's in the luxury tax and makes luxury tax payments, all that money actually, half of it ends up going to the NBA teams who don't pay any luxury tax. So essentially the Warriors for the past couple of years have been sending out half of that money to teams like OKC who haven't been in the tax. So from this season onwards, if a team like Utah doesn't meet that salary floor, they don't see a single penny of that luxury tax payout share. And on top of that, for all that money that is between them and the salary floor that they don't spend, it no longer actually goes to their players, it now goes to the league who then divvies it up among all of the players for all 30 teams.
Those have been really two drastic changes that have been implemented to make teams no longer spend very little on the rosters as possible. So Utah is extremely incentivized to make use of that cap space. And at this current moment in time, they have 12 players under contract.
If you currently look at their their cap sheet, they're at what they have 30 million in cash space right now.
They have to spend at least 16 million on those last two to three spots to meet that. You could sign some free agents. There's some interesting guys out there, like Tyus Jones, you could give them like a big deal just to meet that. But yeah, they have to do something with it, for sure.
And if you trade Lauri depending on what you get back for that's still like 16, 20 million you have to cover somehow. And that's going to be the same thing for the next couple of years, especially when you have these aging guys like Clarkson and John Collins coming off of deals.
If Kuminga really becomes who he can be, three years from now, he's 25 years old. He's making, 35, 40 million. Is that bad of a contract? Kuminga making 40 at 25 with three years left on his deal?
I don't think so. I think you could trade that to a team. Like you could probably do what you're doing with Lauri now. Like, yeah, Lauri makes a lot less, but it's still the same concept.
Eric: Yeah. I think what you're saying is true, but knowing Kuminga you're gonna have to decide right away whether to extend, it just makes it less attractive as an asset. But I think what you're saying is right.
Perks: I guess we'll have to see. And I do think it was interesting. I'm sure you saw yesterday that Utah waived two of their non guaranteed guys and Bazley and Lofton Jr. And yes, those guys both have partial guarantee triggers for today, actually, that start at 400,000. So I'm sure at some level, they just didn't want to commit to those guys.
But then you also have to ask like that's two pretty cheap contracts for young players that they don't want to keep around. Is there something more to it? Are you going to be bringing in more players than you're sending out in a trade soon? So again, I don't know where those conversations are at right now.
I'm sure we'll hear it heat up a little bit closer to that August 6th deadline.
The Magic Date of August 6th
Eric: Let's talk about this magic date of August 6th. As I understand it: If I'm Lauri Markkanen, and I want to make the most money possible, then I don't want to be traded before August 6th, because if, let's say that I get traded to the Warriors, then they can only give me a salary of a certain size, and in fact, it's much better for me as Lauri Markkanen to renegotiate my contract on August 6th with Utah, then I'll be making a ton more money.
Perks: First of all, the importance of this August 6th date is that is the first day that Lauri is actually allowed to even negotiate or extend his contract. The reason for that is, is that the rule in the CBA is that the third anniversary of the contract, is when the player is allowed to renegotiate it, so in Lauri's case, while technically he was signed and traded from Chicago to Cleveland on August 27th, 2021 . The Salt Lake Tribune had reported that his specific paperwork on that deal stated that he actually signed the contract himself on the 6th of August, but the trade wasn't completed until about two weeks later.
So that's why that date is important. And the other reason that date is important is because For any player who signs an extension that is more than what is known as the extend and trade amount, which is 120 percent of their salary, that player isn't allowed to be traded for six months, and that's also the case for if that player signs that contract after they're traded.
So they wouldn't be allowed to sign a contract like that after they're traded. So that's why if Lauri signs this deal on August 6th, specifically that's six months and one day to the trade deadline. So he would still be eligible to be traded specifically on the day of the trade deadline. So that's why it's very notable because let's say he signs on August 7th, then he can't be traded until the following off season.
So he would essentially be in Utah for the next year and guaranteed.
Eric: Wow. So I. It's probably not a coincidence that he signed it on August 6th, right?
Perks: Somewhat. 2021, August 6th, is what actually would be in a normal NBA year, July 6th. So that is usually the day the Moratorium lifts and teams are actually allowed to complete contracts.
So in that off season, for example, Steph signed his extension on August 6th that year as well, because that's when he was allowed to do that. So that's the specific reason why they ended up signing that contract back then. But again, for the renegotiating extension for this year, August 6th is the first day they can do it.
And then if they do it on that day, Lauri would still be trade eligible. So for him specifically, let's say he wants to have the most money possible and also move on to a different team. He could sign this contract on August 6th and then get traded on February 6th. And so he ends up getting the best of both worlds.
Eric: So that's what I imagine would probably happen, right? Because Lauri Markkanen has leverage, because anyone who signs him now, there's no guarantee he'd re-sign with that team.
Perks: That's correct, yeah.
Eric: And he could just put out through back channels that I'm not going to re-sign with anyone if you trade for me before August 6th because I want the biggest bag I can get.
Perks: Yeah, so a lot of this just depends on what Lauri actually himself wants, right? Is he happy in Utah? Is he concerned about getting the most money possible? Is he concerned about, being in a situation where he's playing winning basketball?
Lauri Markkanen's Contract Scenarios
Perks: But in terms of the money itself, I have this little graphic here where we can see all the extension options.
So the first one is called the extend and trade. So let's say Lauri was traded tomorrow to the Warriors. This would be the contract they would be immediately allowed to re-sign him to as of that day. So it would be a four year extension. At 120 percent raise on his current salary with 5 percent raises subsequently.
So that would net him in total, including this year, that's five years, about 111 million. So that's the lowest. I don't think he'd have any interest in taking that. The second one is the standard extension, which is 140 percent of current salary, so if Lauri was traded to the Warriors today, or tomorrow 6 months after that date, he would be allowed to sign this extension, so if the Warriors trade for Lauri at any point during this season and wanted to extend him on his current contract, this would be the most money that the Warriors are allowed to offer him.
So that, in total, with his current salary for this year, would be 131 million for what is that, five years? And again, with both of those cases, Lauri's not even making a fraction of what he could make either extending with Utah or entering free agency. In his mind, there's no intention of signing any sort of extension like that.
So that's why the two options that are the most feasible for Lauri is to either get traded right now. And then re-sign in free agency. So again, he would have to, pretty much make it known with whatever team trades for him that, yeah, I'm 100 percent re-signing with you. Free agency it's a done deal, I'm not gonna negotiate with anyone as long as you give me such and such salary, right?
So if the Warriors did that, if they traded for Lauri they wouldn't extend him, but they would enter free agency with his bird rights, and then they would be allowed to give him a maximum contract, which, based on the current 10 percent projection for the salary cap next year, would start it about around 46 million.
So including his salary for this season, that's going to come out to around 287 million for the next six years. And the big difference between that and what Utah can give him is that Utah can give him the same as that max contract, but they can also increase the salary for this specific season. So the reason for that is because Lauri is making 18 million with that 140 percent extension limit.
Utah couldn't give him the max extension, right? They can only give him this 25 million starting salary for next year. But what renegotiating allows them is using their available cap space, they can increase his salary from this 18 million all the way up to 33 million, even more than that, but they would need at least 33 million.
To then be able to do that 140 percent raise and give him that maximum extension, locking him in for over 300 million for the next six years.
Eric: Yeah. Saying the phrase 300 million made me dizzy for a second there, but.
Perks: So yeah, that's the biggest difference here is either way, Lauri can get his max if he wants to, but only Utah or, again, a team with cap space is able to renegotiate that salary for this year and give him at least a 15 million bump.
The Warriors wouldn't be able to do that. Any other team other than the cap space team that trades from wouldn't be able to do that. So by renegotiating with Utah, not only does he get that 15 million for the season that he wouldn't otherwise, he also gets to lock in that extension right now in case, anything were to happen to him this upcoming season. That wouldn't be the case if he was traded to the Warriors.
Eric: Yeah. That seems to be the big thing because when you look at column D and E, it's actually not as big a difference as I would have thought. Like when you look at it overall, it's only really this season raise that Utah can give. And of course 15 million bucks is massive to most humans, but when you're making 300 million, then you can probably pick your situation a little more carefully.
But in column D, that means he would be traded, and then he would go into free agency. And that's a lot of risk for everybody. So for him, if he gets injured, then it might lower his chance of getting a max extension or max re-signing. If for the Warriors, if something goes wrong and he just doesn't want to sign back, then there's no recourse, right? Like he can just leave.
Perks: They wouldn't trade for him unless there was like a very firm understanding that he'd be resigning. We saw this with the Pacers last year. They traded for Siakam. They were essentially doing the same thing where Siakam was like, yes, I'm re-signing with you guys.
We just have to wait till free agency to do it. So they wouldn't do a deal unless Lauri would, you know, 100 percent in on coming back. Now, obviously, they can't lock in anything officially, so Lauri could not be a man of his word and be like, you know what, I'm actually going to leave.
But again, I just don't think something like that would happen. It's a bad way to have connections and stuff. The one thing I also want to point out that I didn't put here is if Lauri, let's say, were to do that, where he'd renege on a contract with the Warriors and instead explore a free agency, the amount of money he could get would be slightly lower than this, because this 30 percent max is with 8 percent raises.
So Lauri instead would only be eligible for 5 percent raises with another team, so I can actually see if I can show what that would look like.
Eric: Okay, you're saying that if the Warriors traded for him, they could give him 8 percent annual raises, But if he went as a free agent to some other team, they, that new team that's interloping and messing up our relationship would only be able to give him 5 percent raises.
Perks: Correct. And that would come out to about, so 273 total. So that's about, what is that, 15 million less? So again, not too bad. A huge amount of money, but still, or I guess 14 million less. Not a huge amount of money, but something. Okay.
Eric: At this point we're talking about, can you buy a small country or a medium sized country.
Will This Drag Out to August 6 so Lauri Markkanen Can Re-negotiate?
Eric: So for all those reasons, I always just imagined that Lauri was going to want to do the renegotiation and extension. It's just so good for him.
And then from Ainge's point of view, if Lauri is now locked into this contract, I feel like he will expect more teams to be able to bid on him, because now you're matching a bigger salary, so maybe there's more possibilities and then also you have the lock in of the contract, so teams don't have to worry about whether Lauri's going to re-sign with them or not.
So for Ainge's point of view, and from Markkanen's point of view, it feels like column E is just better for both of them.
Perks: Yeah. And I think the only difference here with that is once Lauri locks in that contract, it lowers his trade value, right? Because, let's say they keep him for two years, like Lauri at age 29 making 50 million, how attractive of an asset is that necessarily going to be?
From the outside in, I don't know, I think both Lauri and Utah are happy with where they're at right now, but at the same time, I think the issue for Utah is you don't have yet a Wembanyama, a Cade Cunningham, a Paulo Banchero: this type of young budding star that you would want to pair with a guy like Lauri as his number two.
And until you have that, he's wasting away on your roster, at a certain point, you have to sell them and get that best price possible until you can get that foundational franchise player. And they don't have that right now. So again, if they don't get a price they don't like, I think they keep them and they just do the renegotiating extension.
But I do feel like there's a motivation for Utah to try to get the most assets out of it as possible because Lauri is 27. At this point, he doesn't fit their timeline, and I don't know if you want to trade him down the line, if you can get more than you could at this current moment in time.
Eric: Yeah, that's fair.
I feel like Lauri's trade value must be maximum right now. He's on the verge of having a too injury prone rap on him. There's a question mark about whether his last two years have been so good just because he's been featured on a team that doesn't care about winning.
At this point, people are willing to bet on his potential, but in two years, he could lock in both of those ideas, and that would really reduce his value.
Perks: Yeah, and I just want to make a slight correction for my chart here. I forgot that when you sign a free agent that's not yours, you can only offer them a four year deal.
So in this scenario, if Lauri reneged he'd be leaving the 61 million off the table. But again, at the end, there's free agency in that year, maybe. I don't know what, that's 28, 29, 30, 31, maybe 32-year-old Lauri can get $61m on the open market in 2029.
Eric: By then the salary cap might be larger 'cause the media deal will be renegotiated. So every game is on a different network.
Perks: I'm normally pessimistic when it comes to the Warriors making a bigger trade just because historically, they don't end up doing it. We hear a lot of talk about it, but they don't pull the trigger, but I don't know. I feel like for this specific moment in time, I feel more positive about it than I have in years past. I don't know if you share the same sentiment.
Eric: Interesting. Interesting. Uh, No, I'm pretty pessimistic, but I like to hear people being optimistic because I think it's a nice swing. Markkanen is one of those Top 30 players that you could see fitting well with Steph and actually many of the other top 30 players you could see not fitting well with Steph. In theory, it could be a really good transition to the next stage.
Is the Warriors Offer Enough?
Eric: But I guess I don't think Moody plus picks is a very appetizing package.
Perks: I don't think it gets it done. They need to have either JK or Podziemski in there.
Eric: So of course I think, like everyone, that Moody's kinda gotten the shaft and that if he'd had more playing time, he'd have better stats and be doing better and have developed better, right? Okay, so let's just stipulate.
But, to the rest of the world, he's just some guy who's got a little bit of potential. So he's certainly not the centerpiece for this kind of trade. J.K. is someone who has eye popping highlights, but has only really played well for like, four months or something. And all the potential in the world, but still, and he's up for this re-signing.
Podziemski had one year where he, like almost with paper clips and tape or something. He had a very effective year. His plus minus, it was excellent. When he was actually on the floor, the Warriors were a winning team. It just feels weird the way he does it.
It's just not traditional. His defense came out of being in good positions and taking a ton of charges and his offense, his three pointer, I think his three point percentage ended up pretty good by the end of the year, but it definitely felt super shaky through the year. And he was a glue guy. He gets a zillion rebounds, which is actually low key very important for winning, but it doesn't look like a player who's gonna be a star, or a star in his role.
And I'm just trying to give the most neutral, outsider point of view on our assets. Even though I love watching all those guys. So I just can't see this being all that attractive to Ainge. I feel like it's just about the draft picks, personally.
Perks: See, I do agree with that, but I think at the same time, we haven't really heard any other teams really showing a big interest in Lauri. Like the Spurs have been mentioned, they have some picks in there. They've, there's been talk of Keldon Johnson being in that deal, but whose picks are more attractive?
The Spurs or the Warriors? I would think it's going to be, the team is going to be much, much worse in the future. If your competition is a team whose, I would say assets on paper are worse than yours, and there isn't much other noise about teams being interested, if we go with the assumption that at some point Utah doesn't want to cash in on Lauri and get a good deal for him is there going to be a better offer than, what the Warriors can put together right now?
Assuming that they would end up including, Podz or JK in a deal with the belief that they'd also take out a couple of firsts that have been offered.
Eric: Yeah, yeah, that is true. It's also like suspicious. It makes me a little worried. Like why are there not more teams bidding on him? Markkanen's highlights look good. He's an agile, like actually quite springy, dunky kind of guy who can hit threes. But he plays 50-ish games a year, and you don't even know if he's gonna make it to the playoffs in one piece, and there's always a question, is it big stats on a bad team? So it's easy to talk down any player, but it is suspicious that there isn't more of a bidding war.
Perks: But then again, that's what's been reported. If I remember correctly, when they were shopping Donovan Mitchell it was, we were hearing Knicks, and then, Cleveland comes out of nowhere and gets that deal done. So you never really know what's going on behind the scenes, but we can only get a glimpse of it from what we hear.
Eric: That's true. That's true. Okay, so I feel like we've covered Lauri Markkanen. You're a bit optimistic that something good will happen. I feel pessimistic because it's Ainge and he doesn't need to trade Lauri so he's just trying to exploit someone for a really bad deal.