The Cavaliers Ace in the Hole: The Brendan Haywood Contract

Much has obviously been made ado about the Cavaliers since LeBron put them back on the map after his homecoming. Whether you view their 16-10 start or 5th ranked offense (when some came into the season believing this to be potentially the best offense of all time) as a disappointment is personalized and largely up for debate. What is not subject to contestation is the fact this team has weaknesses, largely in the rim protection and perimeter defense categories. While many expect the offense to continue to improve as the team gels in Blatt’s system, these respective weaknesses are chronic flaws that are not going to be absolved with experience playing together. Thus, steps will have to be taken to remedy this flaws, beginning either at the trade deadline this season or this upcoming offseason. The Cavaliers are largely devoid of assets unless they decide to trade Irving, an unlikely event. Their most significant trade asset is perhaps the most unlikely and underreported asset in the league: Brendan Haywood. Yes, THE 35 year-old Brendan Haywood who was last seen playing competitive basketball for the Washington Wizards in 2009. However, as the following will indicate, Haywood, or rather his contract setup, is nothing to scoff at in terms of a legitimate asset, and could end up being the Cavaliers vehicle to create a true championship caliber roster. First, the background of Haywood’s contract and it’s significance will be explored.

The History and Significance of Haywood’s Contract

Haywood originally signed a 6 year, $52,267,500 deal with the Mavericks in the summer of 2010 after being traded from the Wizards. However, shortly after signing the contract, Tyson Chandler, who Dallas also acquired via trade, beat Haywood out for the starting center role. This led to a sequence of events that resulted in the Mavericks utilizing the amnesty clause on the remainder of Haywood’s contract in 2012. In the original contract, Haywood’s final season was $10,522,500, but was fully non-guaranteed if waived by August 1st, 2015. This component is absolutely crucial.

After Haywood was placed on amnesty waivers, the Charlotte Bobcats submitted a partial waiver claim for Haywood. As opposed to the traditional waivers where the claiming team must submit a full waiver claim and take the contract as is, amnesty waivers permits a team to make a partial waiver claim (or a full waiver claim, which receives priority) and the player goes to the team with the highest bid. The waiving team, in this case Dallas, is responsible for the unclaimed amount.

The Bobcats submitted a bid for Haywood for $6.15 million. The minimum bid for Haywood was $4,200,178, the minimum salary for a player of 10+ years of experience in Haywood’s case, from 2012-2014 (the minimum bid is the greater of the aforementioned minimum salary in the remaining protected years or the aggregate non-guaranteed salary in protected years, but the latter did not apply here because all of Haywood’s non-guaranteed salary was in one unprotected year). The winning $6.15 million bid was then spread over the remaining three protected years of the contract pro rata, resulting in team salary figures of $1,886,312 in 2012/13, $2,050,000 in 2013/14 and $2,213,688 in 2014/15. Again, the Mavericks were on the hook for the remainder of guaranteed portion of the contract through 2014/15, and the Bobcats became responsible for the non-guaranteed salary year of 2015/16.

This past summer, the Cavaliers acquired Haywood in the three-way trade that landed Alonzo Gee in New Orleans. The significant takeaway from this sequence of events is Haywood’s final contract year in 2015/16 of $10,522,500 remains fully non-guaranteed, and the Cavs surely acquired Haywood with that fact in mind. The contract can either be waived by the Cavaliers prior to August 1st in the 2015 offseason, resulting in immediate cap relief, or traded to a team who can do the same. In essence, unlike an expiring contract where player salary is included in team salary until the end of the final cap year of the deal, Haywood’s non-guaranteed deal can be waived and immediately subtracted from team salary, making it incredibly valuable. Being as though the Cavs will likely be over the salary cap, as evidenced below, the most likely utilization of the Haywood contract will be through trade, and thus the trade parameters will now be explored.

Trade Parameters of the Contract

Depending on the Cavs team salary obligations as it pertains to the luxury tax post trade, the Cavs can either trade Haywood for $15,522,500 (outgoing salary + $5,000,000) in returning salary or $13,253,125 (125% of outgoing salary + $100,000). The Cavs tentative cap sheet for guaranteed core players is expected to be as follows assuming a $66,500,000 cap:

LeBron James: $22,000,000 (max salary 10 year veteran 35% cap)

Kevin Love: $18,500,000 (max salary 7-9 year veteran 30% of cap)

Kyrie Irving: $17,200,000 (max salary 27.5% of cap)

*Eligible for 5th year max if voted as a starting guard in the all-star game for a second time, fulfilling one of the requirements for the 5th year max

Anderson Varejao: $9,638,554

Dion Waiters: $5,138,430

Guaranteed Total: $72,476,984

With an expected luxury tax threshold of $81,000,000, the Cavs are likely to be a tax-paying team, especially if they re-sign Thompson to a contract in the $7-10 million annual range. Moreover, they will likely be a tax-paying team if they take back a large salary contract in return in any Haywood deal.  There are other factors to consider, such as if the Cavs will use their full non-taxpayer midlevel exception, which would hard cap them to the expected $85M apron, and constrict their trade flexibility. However, the following operates under the assumption that Cavs will be a tax-paying team without being hard-capped (which makes it likely that a trade involving Haywood happens first, and then an accompanying free agency signing second). Prior to exploring trade targets the Cavs will likely pursue this offseason, a brief look at the Cavs draft pick situation is required.

Cavs Draft Pick Availability

Cleveland has two draft pick debits in accordance with the following:

1.2015 First Round Pick Swap with Chicago.

Chicago has the right to swap picks with the Cavs this season if the Cavs pick falls outside the lottery.

2.2016 First Round Pick to Boston.

Protections: 1-10 in 2016, 1-10 in 2017, 1-10 in 2018 and unprotected in 2019

On the opposite end, Cleveland has one draft pick credit in accordance with the following:

1.2015 First Round Pick From Memphis

Protections: 1-5 and 15-30 in 2015, 1-5 and 15-30 in 2016, 1-5 in 2017, 1-5 in 2018 and unprotected in 2019

Based on current projections, the Cavs project to keep their own pick in 2015 (no pick swap with Chicago), convey their 2016 first round pick to Boston and will not receive Memphis’ pick until 2017. In accordance with the Stepien rule, the Cavs can trade Memphis’ 2015 pick either now or after the 2015 draft, their own 2015 first round pick after their selection in the draft, and a conditional first rounder starting in 2018, but cannot trade their own future pick unconditionally until 2021. Memphis’ pick could become incredibly valuable as early as 2016 if Marc Gasol departs in free agency this summer, so expect that pick (which should roll-over to 2016 with Memphis expected to finish in the 15-30 protected range) to be included in any deal. Factoring in that component, the following are realistic and potential trade targets for the Cavaliers this offseason.

2015 Offseason Targets

Al Horford: $12,000,000

The Cavs could make a straight up 1 for 1 trade involving just Haywood because Horford’s $12,000,000 salary falls within the trade legal $13,253,125 incoming salary amount described above. Depending on the Hawks ownership situation, Horford could become available in the final year of his contract if the Hawks decide to rebuild either through the draft or in free agency. It would likely take Waiters in addition to the Memphis pick to make Atlanta amenable to any Horford trade, but the pieces to complete a deal are there. Horford would afford Cleveland some rim protection and become a substantial upgrade as a pick and roll defender at both the 4 and 5 spots. Also, Horford is perhaps the best fit in Blatt’s offensive system with his high post passing, speed, mobility and ability to stretch the floor.

Brook Lopez: $16,744,128

Being as though Lopez’s contract falls outside of the $13,253,125 allowable range, another contract would have to be included in any trade offer, most likely Waiters. The Nets are currently in the midst of another disappointing season and are fielding an egregiously high team salary for a middling team. Given Lopez’s likely opt-in next year coming off an injury plagued stint, the Nets willingness to shed salary (they are currently rumored to be attempting to offload Deron Williams) and Mason Plumlee being entrenched as an alleged a core component of the team moving forward, Lopez could likely be had for the right price this offseason. A trade might not even have to include Memphis’ pick, but including it would likely seal the deal. Lopez offers the Cavs a true low-post scorer on offense and some rim protection. However, Lopez is a slow-mover both in straight-line speed and rotating defensively, rendering him not the ideal fit for Blatt’s system. Still, his low-post scoring would offer the Cavs an element they currently do not possess.

Andre Iguodala: $11,710,456

Similar to Horford, a Haywood for Iguodala 1 for 1 swap is trade legal. As covered in a recent post, the Warriors will be in luxury tax hell this offseason if they match the inevitable hefty Draymond Green contract and keep both Lee and Iguodala. While the Warriors will look to deal Lee first, suitors might be hard to come by. Iguodala is the much more desirable asset. The Cavs can offer the Warriors immediate salary relief for Iguodala, and would likely not have to part with either a first round pick or Waiters. Multiple second round picks should suffice considering the Warriors obvious luxury tax predicament. Should the situations arise, Iguodala would provide the Cavs elite perimeter defense and stand-in as an upgrade over Marion as a floor-spacer. While the Cavs lack of rim protection is viewed as their primary weakness, it could be argued acquiring another 3 & D perimeter wing tops the need category. This scenario has a realistic chance of transpiring.

Roy Hibbert: $15,514,031

In alignment with the Lopez trade scenario, an additional salary would be required to make this trade legal, again most likely Waiters. With Hibbert expected to opt-in to the final year of his contract, and given the Pacers struggles this year, they could look to push the reset button and rebuild around the presently injured Paul George by shedding salary. Enter the highly controversial Hibbert, whose verticality and rim protection ranks as most dominant in the league, but who affords little else outside of underrated passing. Hibbert would fill the Cavs greatest need to its maximum potential, but could detract from some of the more up-tempo offensive sets Blatt wants to run with his laboring frame. Still, a Haywood/Waiters offer could appeal to the Pacers, and permit the Cavs to fill a primary need while focusing on another perimeter defender in free agency.

Larry Sanders: $11,000,000

Lastly, a Sanders for Haywood trade would be trade legal in any tax/non-tax circumstance, and Sanders would similarly fill the Cavs need for rim protection. The Bucks are rebuilding around Giannis and Parker, both still teenagers, and Sanders at age 26 falls way outside the age of the team’s core. However, Sanders is all the Bucks have for rim protection, and this season he has regained his form as one of the best rim protectors in the league. Thus, it will likely take the Grizzlies pick, which could appeal to the rebuilding Bucks, to land Sanders in any trade. Ranking behind Hibbert as ideal defensive anchors, Sanders could definitely be a realistic second choice.