Trade Analysis: Iguodala to Miami

The Andre Iguodala saga finally came to an end this week when he was extended-and-traded to Miami. There was a lot of speculation about what else the Heat were going to do, including significant time spent talking with Oklahoma City about Danilo Gallinari in a similar extend-and-trade transaction. On Wednesday evening, the deal was in place for Iguodala to sign his extension and move to Miami, but it took until the next afternoon for the full details to be worked out, with a late addendum to add a third non-Oklahoma City team to the mix.

The full terms of the final version of the trade:
Miami receives Andre Iguodala, Jae Crowder and Solomon Hill.
Memphis receives Justise Winslow, Gorgui Dieng, and Dion Waiters.
Minnesota receives James Johnson.

Iguodala signed a two-year extension in conjunction with the trade that will pay him $15 million in each season, with a team option for 2021-22. The extension also has a 7.5% trade bonus, league sources tell Early Bird Rights. $15 million seems to have been Iguodala’s price to show up to work in Miami, rather than continue to sit out and force a buyout. Given how much other money the Heat dumped in this deal, the $15 million is well worth the price.

Crowder and Hill are on expiring contract; Crowder makes $7.82 million and Hill will earn $12.76 million in base salary this year, with another $531k available if he plays 1,000 minutes this season. He’s already up to 901 minutes and figures to be in the Miami rotation, so it’s a fair bet he’ll earn that. Crowder’s struggled with consistency on his jumper throughout his career and is having a down year, but he’ll absolutely be a part of Miami’s rotation. Hill is overpaid but is still useful to a Miami team looking for depth at the forward spots.

In sum, Miami clearly made out extremely well in this trade. It’s hard to see how this could have worked out better for them, short of Oklahoma City giving away Gallinari for nothing. They cleared a whole bunch of money from their books for next year; even with Iguodala’s $15 million extension, they project to have $26.50 million in cap space this summer. The 2020 free agent class isn’t all that strong, but if we’ve learned anything about Pat Riley over the years, it’s that he’ll put whatever it takes on the table to get a trade done. After the 2020 draft, they’ll have another first-round pick to send out in a trade; nobody would be surprised if Riley put that 2027 first-rounder in a trade for a star to fill that cap space.

Winslow is in the first year of a three-year, $39 million extension he signed with Miami in the fall of 2018. That contract has a team option on the third year, which lowers the Grizzlies’ downside risk if he doesn’t work out. That risk is pretty substantial, given that he’s currently nursing a back injury that has varying degrees of severity depending on who you talk to about it. He could be back after the All-Star Break, but if he’s out significantly longer than that, it wouldn’t necessarily be a shock.

Dieng’s contract will pay him $16.23 million this season and $17.29 million next year. Waiters is on $12.1 million this year and $12.65 million next year, with $1.21 million in annual unlikely bonuses attached to the deal. The latest reporting is that Memphis will seek a buyout with Waiters. Dieng will take over the backup center spot for the Grizzlies behind Jonas Valanciunas, which should semi-permanently move Jaren Jackson to the 4.

Mirroring the Warriors’ move for D’Angelo Russell last year which brought Iguodala to Memphis (well, sorta, since he never actually suited up for them), the Grizzlies likely would have been better off doing nothing and eating the financial and public relations cost of cutting or buying out Iguodala. They’ve made themselves worse for this season, when they’re right in the middle of a race for the 8 seed in the West and will close $43 million for Winslow and Dieng next year, since Waiters won’t be on the team anymore, and what do they have to show for it? They got no draft picks and little future value.

Winslow, when healthy, is at best properly paid on his contract and doesn’t necessarily fit all that well with the Grizzlies’ future, so it’s not like paying this hefty price gets them a ton of on-court value the next two years. His best role offensively is with the ball in his hands, but the Grizzlies are clearly committed to Ja Morant as the team’s full-time starting point guard and they just spent about $27 million on Tyus Jones to be the backup. Winslow can probably play with Jones on the second unit, but they paid a pretty penny for a guy who doesn’t fit with their star point guard in the starting lineup. He’ll bring an upgrade to their defense moving forward, but the questionable offensive fit and injury concerns makes this move difficult to understand for Memphis.

The argument for this trade has to do with the opportunity cost of their 2020 cap space, which stood north of $40 million before the trade. The Grizzlies have never been a free agency draw, for logical reasons, but signing players isn’t the only way to use cap space – they could have had the cap space and draft assets to make a swing trade this summer and contend as soon as the 2020-21 season. Morant and Jackson are ready for prime time already, as they’ve shown this season; surround those guys with another star and a few quality veterans and the Grizzlies would be a very tough out in a playoff series.

After conveying their first-rounder to Boston this year, they’ll have all their own firsts going forward, plus a pick from Utah that projects to convey in 2022 and a pick from Golden State that should arrive in 2024. They have Phoenix’s second-rounder this year, which should have value on the trade market at the draft. Cap space may not be valuable to Memphis for signing difference makers in free agency, but they sure as hell could have used it to trade for a guy and moved some of their extra draft picks to do it.

They can still make a move this summer and use Dieng as outgoing matching salary, but they’re going to have to pay an extra price to get a team to take his money, even as an expiring contract. Waiters, if he’s bought out, sticks to their cap sheet; a team can’t trade dead money. The only reason to buy him out is if they desperately need that roster spot or if he’s willing to give a significant portion of his salary back in the buyout – why not keep him, like they did with Iguodala, and trade him later, even just as filler salary in a deal to upgrade the rotation?

I’m all for preaching patience, particularly for a small market team, but they didn’t nearly enough for the value they lost in this trade. The Memphis front office hit home run after home run last summer – trading Mike Conley for significant positive value, drafting Morant to replace him, nabbing Iguodala and that 2024 Warriors first-rounder, and filling out the roster with quality veterans who have helped them get to the playoff position in which they find themselves today. They had a very good young core in Morant and Jackson along with quality young role players in Brandon Clarke and Dillon Brooks, a few extra first-rounders over the next few years, and ample financial flexibility to upgrade this summer and push themselves into the conversation for a top-four seed in the West. Now, they still have that young core, but they’ve sapped the flexibility they could have used to make a real push this offseason, even if they’re not a free agency destination.

Johnson makes about the same as Dieng: $15.35 million this year, with a player option for $16.05 million next year. This is mostly a neutral salary move for the Wolves, though they do save about $900k on their team salary, which pushes them closer to getting out of the tax. They’ll likely complete a buyout with Evan Turner in the next few days that may get them all the way out of the tax – they’re $1.14 million over for now.

Johnson should play a larger role on the Wolves than Dieng would have. Dieng is a one-position player who was going to max out at 10-15 minutes per game behind Karl-Anthony Towns, but he played those minutes well and Minnesota is going to have to replace that with some combination of Omari Spellman and Naz Reid the rest of the year. They could also fill Turner’s roster spot with a backup 5, but that’ll cost them on the tax.

They have a handful of 4s on the roster, but none better than Johnson, assuming he’s healthy and engaged. He should slide into the starting lineup before long and play significant minutes ahead of Juancho Hernangomez and Jarred Vanderbilt. Hernangomez may supplant him next year if he shows that he can bring consistent value, but the starting 4 should be Johnson’s spot to lose for now. And who knows, maybe he’ll opt out and relieve the Wolves of some financial pressure this summer.