Derrick Rose for Dennis Smith Jr: Looking at the money behind the trade

Way back in the offseason, I wrote about the Detroit Pistons cap situation and the financial validation behind all the moves and signings, as well as the order in which they were being done. were being done in. With the trade last week that sent Derrick Rose to the Knicks for Dennis Smith Jr and the 2021 Hornets second-round draft pick, I wanted to see the financial implications of the move.

First, a look at the Pistons current cap sheet.

One major thing up top. This analysis is all before accounting for any potential Blake Griffin trades or potential buyouts. Perhaps it’s best to look at everything through the narrow prism of the Rose deal to help acclimate to when the major money moves around once Blake is gone.

Another thing, the last financial piece I wrote I got a few of the values wrong. I’ll run through those changes quickly, in case you were wondering why numbers may have gotten a bit higher:

1. All the rookies salaries (minus Saben Lee) have been increased. When I did the original sheet we didn’t have the rookie contract details yet so I went off, from memory, the Spotrac projected rookie scale. Now we have hard numbers.
2. When Josh Jackson’s signing got announced, I assumed it was a minimum, so I used the fourth year minimum value. Then it was announced he got part of the room exception, but figures weren’t reported so I left it. Now we can see Jackson’s deal is worth roughly $9.7M for two years. Money well spent, I’d say.
3. While the overall values of the deals for Mason Plumlee and Jerami Grant were right, the year to year raises were off. Those have been readjusted.
4. Added in the dead cap figure for Dzanan Musa.
5. Added reported salary for Deividas Sirvydis.

Right, with me? Let’s go.

Derrick Rose signed with the Pistons last offseason for $15 million over two years. He was due around $7.6M this season, while as you can clearly see, Dennis Smith Jr is in the last year of his rookie deal worth $5.6 million. Straight up, that’s a $2 million raw saving.

As the Pistons are not a taxpayer, the rules regarding what they can accept in a trade is determined by the amount of outgoing salary. Rose’s $7.6 million salary falls into the middle bracket of rules (Question 86 on Larry Coon’s excellent CBA FAQ), meaning the Pistons could take back a maximum amount equalling the value of the outgoing salary plus $5 million. Basically, the Pistons could trade Rose and get $12.6 million worth of contracts for this season in return.

The Knicks, also being a non-tax team, are bound by the same set of rules. But because the salary they were sending out was only $5.6 million, they fall into the first rule (again, Question 86 on the FAQ). They could bring back 175% of the outgoing salary plus $100K. Doing the rough maths, that’s about $9.9 million they could get back as a maximum value, just for Dennis Smith Jr.

The trade itself doesn’t do much for cap relief this year or in the future. Both Smith Jr and Rose are expiring deals, and the Pistons already have a ton of money committed next season (Blake outcome notwithstanding). The only real money you’re clearing is not guaranteeing Rodney McGruder’s deal, which seems fairly likely to happen, even with Troy Weaver’s history with McGruder in Washington DC. The Pistons also picked up Sekou’s team option for next season back in December.

I saw a lot of criticism on Twitter about the pick the Pistons received in the trade. Many (myself included) lamented the fact that the Pistons didn’t get one of the many first round picks the Knicks currently own. On the face of it, losing a player of Rose’s known calibre for a flier on a young guy that wasn’t even in the rotation of a mediocre Knicks team, plus a potential mid second rounder, seems like asset mismanagement.

But if we look at it from a numbers perspective you can make the case you’d almost prefer the second rounder (stay with me here). In a vacuum, yes, first rounders are the goal in any trade. But as I mentioned earlier, the Pistons have a lot of committed salary already for 2021-22, so it’s entirely likely that they’re eyeing off the summer of 2022 as their move.

Regarding the status of New York’s first rounder this upcoming draft, it’s a weird one. They have the option to swap with the Clippers should Los Angeles’ first rounder fall between 5-30 (spoiler, it will) as a result of the trade that sent Marcus Morris Sr to LA. The odds of New York exercising that option right now are minimal as New York’s own pick right now is projected to be No 16, while the Clippers would pick No. 28. New York also own Dallas’ first rounder for 2021 as a result of the Porzingis trade, a pick that is currently No. 14.

As you can see, quite mediocre picks in a fairly top heavy draft. My thinking is, Troy Weaver didn’t want to add 2+2 years of fully guaranteed money to a fairly flush 2021-22 cap sheet. Yes, it’s always possible they could’ve packaged the draft pick, but I doubt they would’ve done that either.

The pick Detroit got is currently the 46th overall, which isn’t great. But as we’ve seen the last two years, the Pistons love picking guys in the second round and putting them on two-way deals. It’s entirely possible Troy Weaver just saw this as a way to save a bit of cash before making their big run.

Back to my original point, the Pistons lose a lot of money after next season. Blake Griffin’s $39 million comes off the books, as does another $8.5 million for Delon Wright. On the off chance they keep McGruder around, his $5 million goes, and Josh Jackson’s $5 million as well. At this point in time, the Pistons are projected to have only $52 million in committed money (half going to Jerami Grant and Mason Plumlee).

Teams with empty cap sheets become dangerous free agent players. You saw it with Brooklyn a few years ago during their rebuild. Teams with tons of space can inflate the market by offering bloated backloaded deals, especially to restricted free agents. The downside is your money gets tied up for three days while the original team decides whether to match or not, but there are benefits. If the team matches, that’s a player likely out of the free agent market. If not, hey, you got a (hopefully) nice young player. Brooklyn did this exact thing by forcing Miami into giving Tyler Johnson a truly horrible four-year deal worth $50 million.

In conclusion, the trade for Dennis Smith Jr saves the Pistons $2 million this year but makes no difference in future seasons. I wouldn’t be surprised if they saw the success with Jerami Grant and decided to bet on their cap space in 2022, not committing too much to guaranteed money in the way of first round picks (outside of their own).

I realise it’s a pretty left field way to view things. Generally, acquiring first round picks for veteran guys is always a solid move. But, and I’m trying to keep emotional analysis out of this piece, from a purely financial perspective, this is my bet as to what the Pistons are doing. Plus the pick you’d likely get from New York is no better than a very late lottery pick and most likely a high teens pick anyway.