The salary cap machinations of the double sign-and-trade involving Kemba Walker and Terry Rozier

The double sign-and-trade between Boston and Charlotte was, in many ways, nearly identical to the transaction between Brooklyn and Golden State. Charlotte was on their way to losing a star free agent in Kemba Walker and Boston had the cap space to simply take him in without giving anything back to the Hornets, but Charlotte’s front office was able to convince the Celtics to structure the deal as a double sign-and-trade, with Walker exiting Charlotte for Boston in exchange for Terry Rozier and his three-year, $57 million contract. Like Golden State with Russell, the Hornets would have had no way of signing Rozier to such a lucrative deal without the sign-and-trade, though certainly there’s an argument that they should never have wanted to sign Rozier to that contract in the first place. There will be plenty of time for that discussion at another time.

Charlotte structures the trade as a one-for-one swap, though they won’t get a trade exception despite the fact that Walker makes so much more than Rozier on their new contracts. Base Year Compensation kicks in for Walker’s outgoing trade value, as he’s clearly receiving a raise of more than 20% and the Hornets are using the Bird exception to do the deal, which cuts his outgoing salary in half – rather than the full $32.74 million salary he’ll make in Boston, his outgoing salary for Charlotte is half of that figure, or $16.37 million. Because of where they are with relation to the luxury tax threshold, the Hornets can take back up to $5 million more than that number, which will allow them to structure Rozier’s contract with declining salaries. Despite it still being a massive overpay for what Rozier has shown in his four years in the NBA, it will at least be a slightly more tradeable contract as the years go on, if the Hornets do in fact make it a descending deal, which will start Rozier out at $20.35 million for 2019-20 and drop him to $18.32 million in 2021-22, the final year of the deal.

Boston will likely structure this trade as Brooklyn did – they’ll sign-and-trade Rozier to Charlotte and take back Walker’s max salary into the cap space vacated by Irving and Al Horford. There’s an opening for the Celtics to go through their entire summer as an over-the-cap team, should they want to keep the cap hold for Marcus Morris on the books, but it would cost them draft capital and may not be worthwhile for their goals. If it had been able to net them both Horford and Morris, as was the thought before Horford agreed to go to Philadelphia, then whatever picks needed to make the Irving move to Brooklyn would have been worth the trouble, but with just Morris leftover, Boston will likely go the cap space route.

Both the Celtics and Hornets will be hard-capped as a result of this double sign-and-trade, but neither will have any issue staying well under the $139.93 million hard cap. Boston still has some cap space to spend and looks to be more than $22 million under the apron, while Charlotte has $18.1 million to spend before they hit the apron; they could use their entire mid-level and bi-annual exceptions and still have room to spare.