Hot off an eight-game winning streak, the Oklahoma City Thunder (30-20) are playing their best basketball of the season. Yet there's no resting easy for Thunder general manager Sam Presti, who must weigh economic realities with championship-hungry superstars and fans.
Complicating Presti's planning is the knee injury to defensive-minded swingman Andre Roberson, who will miss the remainder of the season. The initial temptation would be to replace him via trade or free agency, but Presti must look long and hard at the bigger-picture questions surrounding Paul George before the Feb. 8 trade deadline.
George, who is expected to opt out of the final year of his contract in June ($20.7 million), recently signaled he may want to stay long term in Oklahoma City. "Russ [Westbrook] is the reason why this decision is becoming [even] easier to make, is the character Russ [has]," George told ESPN's Rachel Nichols.
That sounds like good news for Thunder fans, but it's more complicated than getting George to like his superstar teammate.
The central question shifts to how deep Thunder ownership's pockets are. To the point: Will Oklahoma City pay $250 million to $300 million for a roster that doesn't scream "title contender"?
With Roberson the Thunder weren't in the same class as the Golden State Warriors (40-10). The Houston Rockets (35-13) have been better as well. A trip to the NBA Finals is a long shot. Looking to July, the team may get a "yes" from George on a new maximum deal, starting at $30.3 million (for up to five years, $175.7 million), but Presti's real challenge may be convincing Oklahoma City ownership to foot the bill.
The Thunder can avoid the uncertainty if George takes an extension, but the most the team can pay him for the 2019-20 season is a below-market-value $23.4 million. That $30.3 million starting figure may be a luxury-tax back-breaker.
For their current roster, the Thunder will pay roughly $24.5 million in tax on their $132.6 million in team salary. They also paid $2.8 million in taxes for the 2014-15 season and $14.5 million for 2015-16.
With three of the four prior seasons as a taxpayer, the Thunder will be a repeat tax offender for the 2018-19 season, facing a dollar-for-dollar tax in addition to the league's punitive, progressive tax rate.
With George, along with Westbrook at $35.4 million, center Steven Adams at $24.2 million, Roberson at $10 million and Anthony at $27.9 million (with an early termination option), the Thunder could be looking at paying between $250 and $300 million for their roster.
Should Anthony opt out, that would help solve the team's budget crisis, but that doesn't appear likely.
"Anthony will opt in," a Western Conference executive said. "There's no question about it. He won't get [$27.9 million] anywhere else. The Thunder may have the most conservative ownership in the NBA. There's no way they'll pay $250 million. They can't do it."
The reality is the Thunder are a second-tier team in the conference. Now in fifth place, they are close to overtaking both the third-placed San Antonio Spurs (33-19) and fourth-seeded Minnesota Timberwolves (32-20) in the West. But the Roberson setback will hurt both the team's defense and depth.
A 50-win season with a first- or second-round playoff exit can be had at a more reasonable price. So, what can (and should) Presti do before the deadline and in free agency this July? Can the Thunder compete with the likes of the Warriors? What path is in the best franchise's interest? Is there a serious playoff run to be had? Can the Thunder afford to keep their roster together next year, facing what projects to be a massive luxury-tax bill?
Let George Walk
This won't be a popular option for Thunder fans. If the franchise lets George leave to another team, even if he wants to stay, it will get no compensation in return.
Oklahoma might be able to get under the projected tax threshold of $123 million with some resources to spend elsewhere. The Thunder could retain Jerami Grant (who is due a raise from his current $1.5 million salary) and/or lure other free agents with the team's mid-level exception (between an estimated $5.3 to 8.6 million).
After losing Kevin Durant to the Warriors in 2016, getting nothing in return for George would be a problem.
If George is leaving in July, Presti can try to negotiate with the forward's new team before he signs.
George, who grew up in the Los Angeles metropolitan area of Palmdale, has been long linked to the Lakers. Presti might be able to swing a deal for guard Jordan Clarkson in a sign-and-trade for George, which could help the Lakers open additional cap space to go after a second max free agent.
In previous years, the Thunder have paid teams cash to fashion a sign-and-trade that yielded a trade exception (for example, Thabo Sefolosha to the Atlanta Hawks in 2014). The exception, which lasts a full year, can be used to acquire another player without the Thunder required to send out matching salary in return. The risk is that the team won't find a way to use the exception.
The biggest issue with the sign-and-trade path is it relies on the participation of another team, which also isn't guaranteed. George has full say in where he plays next; Presti doesn't have control over the situation. The sign-and-trade plan could quickly turn into "Let George Walk."
Trade George Before the Deadline
Given the Thunder's recent run, winning eight straight games, would Presti trade George before the Feb. 8 deadline? He might if he agrees that investing over $250 million for a good but non-elite roster doesn't make a lot of sense. If so, the best way to make sure the Thunder get something in return for George is a trade over the next couple of weeks.
The perception, true or false, that George will join the Lakers in free agency may lower his trade value around the league.
If the Lakers believe that to be true, they may prefer to wait out the Thunder instead of giving up real value to acquire him in February. Then again, Los Angeles would still need to clear salary from its 2018-19 books to chase two max players in July.
If the Lakers were willing to offer a package now, built around Jordan Clarkson, Julius Randle, Corey Brewer and Ivica Zubac, would that be enough for the Thunder?
What if the Lakers took on two of the three multiyear salaries of Patrick Patterson, Kyle Singler and Alex Abrines? Clarkson still had $25.9 million left on his deal over the next two seasons. Randle will be a restricted free agent. Zubac is inexpensive at a non-guaranteed $1.5 million for next season. Brewer, in the last year of his deal, would be salary ballast.
Oklahoma City would gain three rotation players and a promising development project in Zubac. The Thunder can look to re-sign Randle as a restricted free agent. Few teams project to have significant cap room, and Randle's market may be in the mid-level exception range, starting at around $8.6 million.
If the Thunder didn't want to risk that Randle gets a larger offer, or the Lakers still have interest in retaining the forward, Larry Nance Jr. might be a better option. Because Nance is under a cheap, rookie-scale contract, the Lakers would also need to send Tyler Ennis, who is non-guaranteed in 2018-19, to match salaries.
The Lakers would be in a position to re-sign George and sign James by either trading Luol Deng, Singler and Patterson (or Abrines) or waiving and stretching their salaries out over multiple years.
Should the Thunder try to prevent the Lakers from forming a superteam? Ultimately, it's about self-interest, and Presti needs to worry about the Thunder first and foremost. He could ask for Lonzo Ball, Brandon Ingram or Kyle Kuzma, but the Lakers will say no and wait to sign George in the summer.
If Los Angeles is giving up players it already intends to let go in order to land two stars, it may be willing to act proactively. In a Nance deal, the Thunder are looking at roughly $143 million in salary and tax for 2018-19. In a Randle trade (with the forward re-signed starting at $10 million), Oklahoma City is looking at nearly $175 million in total. (Both scenarios are without Jerami Grant.)
Outside of the Lakers, would the Thunder be willing to pay for Kevin Love in exchange for George? It'd be an All-Star for All-Star deal, but Oklahoma City would still be looking at a payroll over the $200 million mark.
The Denver Nuggets have several interesting players who might be available for a player like George, presuming Denver believes he'll re-sign, including Kenneth Faried, Wilson Chandler, Emmanuel Mudiay, Juancho Hernangomez and possibly Trey Lyles.
The Utah Jazz also have a number of useful players who could be available like Rodney Hood, Derrick Favors and Joe Johnson.
Would the Detroit Pistons consider Avery Bradley, Stanley Johnson and Anthony Tolliver in a package for George? Bradley, who the Pistons have made available for trade discussions according to ESPN, may be looking for a big contract in free agency, but with cap space sparse around the league, would Presti take that risk if offered?
Any team trading for George would want to believe it is the favorite to re-sign him, but that's not necessarily an assurance he'll be able to provide. That may be a limiting factor for Presti, but as he showed with the original George deal with the Indiana Pacers, he's capable of pulling off blockbuster deals from out of nowhere.
Sign George, Find Clever Ways to Reduce Tax Hit
If Presti is intent on keeping his core of George, Westbrook, Anthony, Adams and Roberson together, that's $127.7 million in salary for just the five players—already more than the projected $123 million tax threshold for 2018-19.
One trick to lower that total could be an extension for Anthony. Instead of paying him $27.9 million for next season, Presti can try to work a deal that pays Anthony something like $15 million a season over three years.
Anthony could lock in roughly $45 million in total, while a $14 million haircut next season. If so, the Thunder might be able to trim almost $40 million in taxes, but that's up to Anthony. He can simply refuse.
Another step would be finding teams to take on the salaries of Patterson, Singler and/or Abrines in a trade. However, the Thunder have already traded multiple draft picks and don't have a lot to offer other teams as an incentive.
Provided they make the playoffs, the Thunder will send their first-round pick to the Minnesota Timberwolves. They also owe their 2020 first to the Orlando Magic and by league rules cannot trade their 2019 and 2021 picks.
Oklahoma City won't be able to trade a second-rounder until 2024, although once the Thunder officially clinch a playoff berth, their 2020 and 2021 second-rounders become available.
Presti may be better off waiving and stretching the contracts of Patterson and Singler. Together, they would eat up $3.2 million of the Thunder's cap room each season over five years.
With Anthony's help, Presti might be able to get his team's salary below $135 million, with under $34 million in tax. Even if the price tag climbs to $175 million in payroll and tax, that's a much more manageable figure than $250-$300 million.
If George is the priority this summer, the key may be in Anthony making it possible.
Dealing Anthony outright to another team is also up to the player; he still possesses a no-trade clause, but that may ultimately be the answer.
Whatever the outcome, the Westbrook extension has already made the George and Anthony trades successes, even if the team is knocked out in the first or second round of the playoffs.
Where the Thunder go from here is one of the great questions in the NBA. They're facing serious economic pressure. It's going to take some creative maneuvering to keep George this summer—if that's even the right move.
If not, Presti needs to pull off another shocking trade before the deadline.