Why Kendrick Perkins' Contract Forced OKC Thunder to Trade James Harden

Dan Favale@@danfavaleFeatured ColumnistOctober 30, 2012

James Harden's path to the Houston Rockets was cleared by the Oklahoma City Thunder themselves almost two years ago.

Though the guard's future continued to be dissected up until his final seconds in Oklahoma City, there has really only ever been one possible outcome in the works—an inevitable divorce between him and the Thunder.

This not-so surprising split became a reality once Sam Presti and company literally ensured that they would be strapped for cash in the not-so-distant-future. By now, you might realize that I'm referring to the Kendrick Perkins trade Oklahoma City that pulled the trigger on in February of 2011.

You remember that trade, right? The one that sent Jeff Green to the Boston Celtics in exchange for size. The one that made the Thunder bigger and deeper in the post, and thus rendered them a legitimate championship contender. And ultimately the one that ensured Harden's days next to Kevin Durant and Russell Westbrook were numbered.

Yeah, that trade.

Except, as D.J. Foster of ProBasketballTalk notes, it wasn't so much the trade as it was Oklahoma City's decision to prematurely offer Perkins a sizable extension:

March 1st, 2011: Before he plays a single minute in a Thunder uniform, Perkins is signed to a 36-million dollar, 4-year extension.

A little foreshadowing—the Thunder lock up Perkins before they see how he fits with the team, simply because they know they can’t afford to lose an asset and receive nothing in return but cap space. They were committed, but it was to the idea of Perkins instead of what he actually was.

Before Perkins even stepped foot on the court as a member of the Thunder, he was signed to a four-year extension that paid him an average of $9 million annually, $36 million total.

But what you see, what you read and what you are told isn't always what you get.

On the outside, at first glance, Perkins cost Oklahoma City $36 million. Go deeper into the realm of numbers and logic, and you see he cost them much more.

As in James Harden more.

The Thunder offered Perkins that contract as the NBA and all its franchises were staring down the barrel of a financial-induced lockout.

Even before the lockout began, even before it reared its ugly head and even before it ended, the heart of the issue was known—the Association wanted to enforce a stricter spending policy.

Big market bullies like the Los Angeles Lakers, New York Knicks and Miami Heat were running rampant, using the vast majority of the financial resources available to them to pull coups via trade and free agency.

That had to stop.

If teams wanted to spend obscene amounts of money, the league was going to make sure to penalize them to the point of Knicks owner James Dolan questioning whether or not he should match the contract of a cash cow like Jeremy Lin.  

And so it did. All for the sake of establishing a "competitive balance."

Fast-foward nearly two years later and we find Adrian Wojnarowski of Yahoo! Sports reporting that the Thunder dealt restricted-free-agent-to-be Harden to the Rockets after the two sides failed to agree upon a contract extension.

The world was shocked, to say the least, David Stern was probably smirking and Oklahoma City was left heartbroken and beard-less.

Yet what most people failed to realize during this trying, but not unforeseen, time is that Perkins' contract didn't just lay the groundwork for Harden to be dealt, it forced the Thunder's hand.

As Wojnarowski reported, Oklahoma City offered Harden a four-year extension "that would have paid him a base salary of $53 million to $54 million," making it at least $6 million shy of the $60 million max.

But that wasn't good enough for Harden. He's a budding young superstar and undoubtedly believed it was time he got paid like one, even after teammates and self-proclaimed "family" members Kevin Durant, Serge Ibaka and Russell Westbrook made some sort of sacrifice to stay in Oklahoma City.

Criticizing Harden for not doing the same is futile and misinformed, though. What his peers sacrificed in pay, he had been sacrificing in status considering his role with the team for over three years.

No one's denying there are obvious perks to being a star coming off the bench. Not only was Harden a lock to remain a Sixth Man of the Year favorite on an annual basis, but he would spend a majority of his time playing against second units, or in other words, inferior talent he could run right over.

But again, that wasn't enough—not anymore. Not for a star who would probably never see his minutes rise above the 31.4 he averaged in 2011-12, not after he had spent his entire career on the bench, basking in the shadows cast by Durant and Westbrook.

Simply put, Harden needed one or the other—the starting role or the paycheck his talents warranted—and wanted both.

But the Thunder couldn't give him both thanks to how they handled Perkins. 

With his salary, along with Harden's $7.6 million qualifying offer, Oklahoma City's payroll sat nearly $73 million heading into the 2013-14 campaign, almost $3 million over the $70.3 million luxury tax line.

Move on to the 2014-15 crusade, where Harden's salary technically came off the books, and the Thunder were slated for $64.5 million in player salaries.

Had Harden accepted the extension that was offered to him, it would have paid him roughly $13.5 million annually, increasing Oklahoma City's salary bill to around $78 million. Had the Thunder caved and paid their star guard $60 million over four seasons, though, it would have brought his average annual salary to $15 million and put their salaries for that year near $80 million, $22 million over the $58 million salary cap and $10 million into the luxury tax.

And that's just the beginning.

Taking the parameters of the league's CBA into account, the Oklahoma City would incur a bounty of luxury tax penalties. 

For teams that are between $10 million and $15 million over the luxury tax line—e.g. the Thunder—they would be forced to pay a $2.50 tax for every dollar they are over that $70.3 million.

That means the Thunder would be paying around $25 million or more on top of the $80 million they already owe, bringing their grand total to more than $105 million.

For a team like the Lakers or Knicks, that's an unfortunate pay wall. For a small market team like the Oklahoma City, that's an impossible metric to meet.

That is why Perkins' contract is so important. The same Perkins who is still owed over $25 million. The same Perkins who averaged just 5.1 points and 6.6 rebounds per game last season. The same Perkins who posted an embarrassing 8.69 PER last year as well.

Yeah, that Perkins. From that trade.

If you take the $9.2 million he is owed off the books, that puts the Thunder in a whole different tax bracket. Assuming they had given Harden the four-year max, that puts their salary cap at around $71 million, meaning they just have to pay $1.50 for every dollar over $70.1 million they spend.

Even that's not ideal for a team based in Oklahoma City, but it's amount the franchise was prepared to fork over, given they offered Harden about $13 million annually in the first place. At that point, maybe they owe $5 million in luxury tax penalties, putting their grand total at around $75 million—$30 million less than the $105-plus million we just calculated. 

So, in other words—to belittle the complex road we just traveled—Harden would have had a future with the Thunder if Perkins didn't.

Could Oklahoma City have thrown caution to the wind, paid Harden and hoped to find an unwitting suitor for Perkins later?

Yes, but only if they had the ability to financially cope if such a tactic proved impossible, which as Tom Haberstroh of ESPN.com writes, they don't:

This is about a small-market team seeking future flexibility. Remember, the Lakers earn $250 million a year off their TV deal, but the Thunder make only about $15 million from theirs. Presti has to play a different game, thanks to the harsher CBA that was supposed to help his cause.

Does this sad conclusion hurt? Of course, but the truth always does. Admittedly, this dose of reality hurts more, as it could have been prevented.

No matter how good or bad the team fairs without him, or how prolific or disappointing he is outside the confines of Oklahoma City, the Thunder's greatest folly wasn't trading Harden.

It was acquiring—and subsequently retaining—Perkins.


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