Trade Analysis: Anthony Davis to the Lakers

UPDATE 27 June 2019: The Lakers have cleared the additional salary in a three-team deal in order to take Davis in as an over-the-cap team, rather than using cap space. That will leave them with $32.02 million in usable cap space.

Our long national nightmare is over. Anthony Davis, after months of trade demands and backdoor leaks to the media and immense changes to the teams on both sides of the deal, has finally gotten his wish: he’s a Los Angeles Laker. Or, well, he will be, since the Lakers and New Orleans Pelicans have to wait to make the trade fully official with the league. On July 6, Davis will officially get his wish and be unveiled as the latest superstar big man to join the Lakers’ long line of superstar big men. After months of drama surrounding one of the best players in the league today, the only drama left for Davis is which number he’ll wear in Los Angeles, as his preferred No. 23 is already held by LeBron James.

The full details of the deal, for posterity’s sake:

The Lakers receive Anthony Davis.

The Pelicans receive Lonzo Ball, Brandon Ingram, Josh Hart, the No. 4 pick in the 2019 NBA Draft, and a slew of future picks – the Lakers’ own 2021 first-round pick, reverse-protected for the top 8, which will roll over to an unprotected 2022 first-round pick if the Lakers are picking outside the top 8 in 2021, the greater of the Lakers’ and Pelicans’ first-round picks in 2023 (swap rights), and the Lakers’ 2024 or 2025 first-round pick (New Orleans holds the right to defer in 2024 if they’d rather push the obligation back a year).

All told, the Pelicans will pick up three players on their rookie scale contracts, three out-and-out first-round picks in 2019, 2021 or 2022, and 2024 or 2025, and swap rights in 2023.

The mechanics of this particular trade are very interesting and can still go in a number of different directions. The move will have to wait until July 6 to go through, but there is ample reason for the Lakers to push back official consummation of the trade about another month, when the No. 4 pick’s salary can be included in the salary matching for Davis. Los Angeles doesn’t have to wait that long, if the two sides agree to do it sooner, as they can simply take Davis into cap space, but doing so cuts out a projected $8.9 million of usable cap space this summer, provided Davis takes his full trade bonus in the deal.

UPDATE 16 June 2019: ESPN’s Adrian Wojnarowski reported on SportsCenter two hours after this article was posted that the deal will in fact go through on July 6, rather than July 30 or later. This is another win for the Pelicans, who will be able to use that extra bit of cap space earlier in the process, assuming Randle opts out, but it really makes things difficult on the Lakers, who are down to $23.7 million in space, rather than being up at $32.5 million. The below analysis is still interesting to think about, as it represents where the two teams would have been had they waited until late July to complete the deal. The positives for the Lakers and negatives for the Pelicans of waiting are outlined below in what was the original article. There are some small nuances to moving forward with the trade earlier or waiting until the end of the July, but the most important is that the Lakers gave away $8.9 million in usable cap space by agreeing to do the trade earlier.

On the other side, waiting will cost the Pelicans in a couple of ways – their projected usable cap space drops by nearly $5 million, from $19.5 million to $14.7 million. These numbers can change dramatically based on numerous factors, from Julius Randle’s player option to the non- or partially-guaranteed contracts of Jahlil Okafor, Christian Wood, Frank Jackson, Kenrich Williams, and Dairis Bertans. Should Randle opt in, then the timing of the trade doesn’t matter quite as much to New Orleans, as they’d function as an over-the-cap team almost no matter what. It should be noted that this would be a temporary problem, as they’d get that $5 million back as soon as the trade was completed, so they could operate throughout July as if that $5 million is available to them, then wait to make those deals official until after the trade goes through in late July.

The second downside to waiting for New Orleans is that whoever is picked at No. 4 won’t be able to join his new team for a month and certainly won’t play Summer League. That guy will sign his contract with the Lakers but will have to work out separately for a while until officially joining up with the Pelicans (or a third team, should New Orleans find a new home for that pick).

The positive side of waiting for New Orleans is that they can restructure the trade over the course of the next six weeks or so, if they can find a third party interested in some of their newly-acquired pieces. Throughout negotiations, the Pelicans were looking to include a third team in the trade in order to essentially flip No. 4 for a player already under contract who can help them win in the immediate future. Although they’ve agreed to this trade with the Lakers, if they end up finding a taker for that pick, the three teams can get together and figure out how to make it work with nothing extra having to come from Los Angeles to do so. That gets complicated quickly, as the No. 4 pick will have a salary value at that point and thus will need to either be matched or taken into cap space or a trade exception, but it’s a possibility.

The talks surrounding No. 4 should ramp up very quickly in the next few days, as the pick itself becomes less valuable as soon as it’s converted into a particular player during Thursday’s draft. Should New Orleans want to get maximum value in a trade involving that pick, it’ll likely have to happen this week, so the receiving team can have the freedom to choose whomever they want on Thursday.

Davis will get his full bonus no matter what, as the salary being sent out by the Lakers satisfies the trade rules whether he waives it or not. That bonus will be paid out by New Orleans but won’t affect their books at all, as he’ll immediately move over to the Lakers’ cap sheet upon completion of the trade, which is what triggers the bonus. That bonus pays out 15 percent of the remaining value of Davis’s contract, minus any years covered by an option, which essentially amounts to 15 percent of his 2019-20 salary. That extra $4.1 million puts his cap hit at $31.2 million for the upcoming season.

Assuming the two sides are going to wait the 30 days to ensure that the Lakers can use $32.5 million in cap space, the trade math works, but just barely – the four players (Ball, Ingram, No. 4, and Hart) the Lakers are sending out aggregate to $24.98 million in salary. Los Angeles can take back up to 125 percent (plus $100,000) of that number if they’re operating as an over-the-cap team, which adds up to $31.32 million. Davis’s new $31.16 million cap hit fits the bill precisely; if the Lakers had held back on sending Hart in the deal, the trade math wouldn’t have worked and Davis would have had to give up part of his trade bonus. [Editor’s note: the two sides will not wait, as referenced in the above update. Davis will be able to keep his full trade bonus and the Lakers will take him into cap space, so the normal salary matching rules will not apply to this trade. Those rules only apply to over-the-cap teams.]

Now that we’re more than a thousand words deep on the salary cap nuances of this trade, it’s time to get into the actual players and draft picks that are changing hands.

Davis is a true superstar and the best player (at the time of the trade) to be dealt in quite some time. The superstar trades of the last few years were all for players who were either well below Davis’s level (DeMarcus Cousins, Jimmy Butler, Paul George, Kyrie Irving) or were coming off a severe injury (Kawhi Leonard). Davis has none of the injury concerns Leonard had a year ago and is clearly at least a top-ten player in the league today, depending on how you rank the bottom half of the top ten, and gives the Lakers a one-two punch in James and Davis that rivals the Stephen Curry-Kevin Durant combination that has terrorized the league in Golden State over the past three years.

In exchange for the most valuable player to be traded while still under contract in decades, the Lakers had to send out three of their four prized young players and so many draft picks that the move instantly drew comparisons to the Nets-Celtics trade from 2013 that ended up ruining the Nets for a half-decade. Of course, Brooklyn traded for 35-year-old Paul Pierce and 37-year-old Kevin Garnett as the centerpieces in that ill-fated move, whereas the Lakers have acquired 26-year-old Anthony Davis. Davis still has many productive years in front of him; the picks they sent out may still end up quite valuable, but to even compare Davis to Pierce/Garnett underrates just how good and how young Davis currently is.

Ball, Ingram, and Hart were the Lakers’ three best young players, though certainly the club’s inclination to include Hart ahead of Kyle Kuzma would indicate that Los Angeles believes Kuzma is a more valuable player. To say I disagree with that assessment is a gross understatement, but Rob Pelinka and his staff clearly believe in Kuzma’s ability to put the ball in the basket more than Hart’s 3-and-D qualities. The Lakers’ folly obviously works to the advantage of the Pelicans, as Hart fits their team perfectly. An above-average shooter and wing defender, he’s precisely the sort of player who will play well on a team dominated by Zion Williamson and the other higher-usage players on the roster, including his two former Lakers teammates.

Ball’s value is mostly derived on the defensive end of the floor, where he’s proven himself to be very strong at either guard spot. He and Jrue Holiday are going to make life miserable for opposing guards throughout their time together. On the other end of the floor, his playmaking will give the Pelicans another drive-and-kick threat, though their spacing will be somewhat difficult to maintain in certain lineups.

Ingram’s fit is most dubious among this group, as he still hasn’t quite found his footing in the league. He’s not much of an outside threat and needs the ball in his hands to succeed, but so do Ball, Holiday, and Williamson, which makes Ingram a difficult cog in the new-look Pelicans machine. Given head coach Alvin Gentry’s numerous options on the wing, it might make sense to bring Ingram off the bench, where he can be used in a higher-usage role.

There’s a chance New Orleans repackages Ingram, either as a part of this trade (as discussed earlier, the Pelicans will have the chance to create a three-team deal out of this trade) or a future move. They’re openly shopping No. 4 around to find a star, but have yet to find real traction in those talks; perhaps including Ingram as well could get them the complementary star they seek.

The draft picks are the crown jewels of this trade for New Orleans. Giving up a top-tier superstar in Davis hurts, but he was already on his way out and to get this level of draft compensation for him is an outstanding job by David Griffin. No. 4 in this year’s class plus two more picks and swap rights in the intervening year is a massive haul for the Pelicans, who will be able to build their team around Williamson with one of the better collections of draft assets in the league.

The particular draft assets moving from Los Angeles to New Orleans serve both teams’ purposes – the picks are far enough out that the Lakers will be able to flesh out their roster around James and Davis, while the Pelicans are happy to extend those obligations out to James’ later years and beyond, when the Lakers should be worse than they will be over the next year or two.

The risk in this deal almost entirely rests with the Lakers. The Pelicans had to move Davis after his trade demand, but they still had significant leverage in trade talks, particularly as they were shopping him around to multiple teams. Now that the deal is done, Los Angeles assumes the risk that Davis can walk next summer for nothing, which would leave them in a hell of a lurch. Of course, Davis’s people have executed on his desire to play for the Lakers, so things would really have to go downhill for him to leave a year later. Still, he’s reserving the option to do just that, as he and his agent have already made it known that he’s uninterested in signing an extension that would commit his future to the club that just moved heaven and earth to acquire him. The likely scenario is that Davis waits until 2020 because doing so will pay him a lot more than he would get on an extension, but the flight risk is still there for Los Angeles.

The idealized version of the Lakers has James, Davis, and a third star surrounded by capable role players willing to sign on at the minimum to play with such a vaunted group, but the downside risk is there as well. James is no spring chicken and just suffered the first serious injury of his career this past season. Davis has never been one to stay healthy throughout a season. Signing that third star remains difficult, as rumor has it that they’re not really in the running for any of the top guys.

Los Angeles must know that as well, as Woj reported that the deal will be done on July 6, pushing their available cap space down to $23.7 million, assuming Davis takes his full trade bonus. The Lakers will not have max cap space this summer, which will limit what they can do to sign a third star, but it also limits what they can do from a role player perspective. Whether they had had $23.7 million or $32.5 million, it might make more sense to spread their cap space around across multiple players who fit their top two well. Now that we know it’ll be the former, smaller number, it will be imperative that they learn from their previous mistakes when it comes to signing role players. Trusting the Lakers to identify the right group of role players to surround James and Davis will be somewhat difficult, as this similar group of decision makers thought it was a good idea to spend nearly $20 million on Rajon Rondo, Lance Stephenson, Michael Beasley, and JaVale McGee last summer.

For now, it doesn’t look like New Orleans is going to be a significant player in free agency, but they could clear more than $21.5 million in cap space if Randle opts out and they try to maximize their space. As things stand, they have so many players and picks they don’t even fit in my 20-line cap sheet, so some thinning will certainly be necessary before they begin to look outward on the free agency market. Their surefire rotation players are mostly a really young group, but with Ingram hitting restricted free agency next summer and Ball and Hart the summer after that, New Orleans doesn’t necessarily have all the time in the world to evaluate how these players fit next to Williamson. They still have a number of deep bench players who will have value around the league, most notably Kenrich Williams, but with the arrival of Hart and Ingram on the wing, Williams might find himself squeezed out of Gentry’s rotation.

There are a million nuances to this deal that make it one of the most fascinating trades in recent memory, but the bird’s eye view remains relatively untouched. Davis had asked out of New Orleans and they had to accommodate his wishes or watch him walk for nothing next summer. He had made it extremely difficult for them to get value for him, as he and his representation undermined their trade efforts at every non-Lakers turn. Getting fair value for a star is tough under any circumstances, much less the ones under which the Pelicans had to operate. In the end, they did extremely well to get what they got in this deal – the three young players they received pale in comparison to the young talent Boston could have offered, but the Celtics also weren’t placing Jayson Tatum on the table in these talks and likely would not have surrendered the sort of draft capital New Orleans got from the Lakers. It was a long process from the trade demand in the middle of the 2018-19 season to where we are now, but the Pelicans’ patience paid off, as did the Lakers’ persistence. Anthony Davis is a Laker, New Orleans got young players and draft picks, and everybody can go home happy.