Summary/Analysis of the CP3 Fiasco...

[CavemanDoctor]

I posted this on the Celtics board but thought some of you might like to read it on the General board as well. None of the information is new but I tried to summarize it all (and add some personal theories, inspired by others on realgm as well) as best I could.

First off, let me just say that I hate Stern. I am not defending him generally. He should have been fired, drawn, and quartered for a million other offenses. But not for this.

Here's what happened:

Yesterday, a deal was agreed to in principle where New Orleans sends Chris Paul to the Lakers, L.A. sends Lamar Odom to New Orleans and Pau Gasol to Houston, and Houston sends Kevin Martin, Luis Scola, Goran Dragic and a 2012 draft pick (which they received from NY, a pick that would be in the mid 20s) to New Orleans. When I heard this I started the first draft of my suicide note because I knew this meant Dwight Howard would likely be joining the Lakers soon as well (they kept Bynum as the major trade piece for Dwight), giving us a league dominated by Miami and L.A. for the next decade. Within an hour, Commissioner Stern disallowed the trade. Everyone went crazy saying he was doing something unprecedented and generally being a dictatorial a-hole. The media, who love anything and everything Laker, immediately spun this into Stern using his power as Commissioner to veto a trade he didn't agree with, something which admittedly never happens. The problem is, that's not what happened at all.

Let's rewind to December of last year really quick: Last year, George Shinn -- owner of the New Orleans Hornets -- could no longer afford to operate his franchise. Unfortunately, nobody was willing to buy the New Orleans Hornets, a team and city still in shambles from Hurricane Katrina. So, in an unprecedented move, the NBA itself purchased the team for $300 million. What does this mean? This means the 29 owners of the other NBA franchises effectively own the Hornets as well. Mark Cuban and Wyc Grousbeck and Jerry Buss and the rest are all shareholders in the Hornets, each with a 1/29 share. They each split up the $300 million cost and paid for this share. Any and all salaries on the roster are split and paid by these 29 other owners. Commissioner Stern, as representative of the owners, is in a sense the owners' de facto representative of Hornets ownership. In this totally weird situation, David Stern is effectively New Orleans's Mark Cuban. Since this had never happened before, and questions arose about inevitable conflicts of interest, the league hired Dell Demps to be the general manager of the Hornets and essentially let him run the team. The rest of the owners still owned the Hornets, mind you, but the team was being run by Demps.

Now, as with any trade, the team's general manager has to take an offer he likes to his owner and ask for approval, since the owner is the one signing the checks. This happens everyday in trades. When Danny Ainge finds a trade he likes, he has to go to Celtics owner Wyc Grousbeck to get final approval. Owners can and have turned down trades from their general managers for business reasons. Even if the trade would help the team in the short term talent-wise, owners have nixed them for fear that the trade will hurt the franchise financially. And this is exactly what happened yesterday. Dell Demps agreed to a trade in principle, a point that has to emphasized since trades couldn't officially be made till today anyway. Stern, in his role as representative of the owners of the Hornets (i.e. the other 29 owners), said "no deal, the trade hurts the franchise." The media, in its typical moronic fashion, totally missed this point and said the deal was done (again, it wasn't; no trade could even be made till today) and that Stern "vetoed" it in his capacity as NBA Commissioner (also false). And that's how things go with the likes of ESPN.

Now why would Stern say the trade was bad for the Hornets? To understand this, we have to first ascertain what the Hornets should want in a trade at this point. They're losing their star player, they are clearly in rebuild mode, and they are looking to be sold to a potential buyer. With that in mind, the franchise should want: 1) a young stud or two, 2) high draft picks, especially in this year's draft which is slated to be one of the best drafts in recent history, and 3) reasonable contracts that won't cripple the franchise. They don't want bloated long-term contracts (this significantly hurts the chances a buyer will want to buy the franchise). They don't want just enough good-but-not-great players to barely miss the playoffs every year, i.e. to stay mediocre, to do well enough to never get good draft picks but also never be able to contend.

What did the Lakers trade get them? Exactly what they didn't want! They didn't get any young studs. They got 31-year old Luis Scola, with 4 years $40 million left on his contract. They got 32-year old Lamar Odom, who is a good player but nothing great and has 3 years $27 million left on his contract. They got a 28-year old Kevin Martin, a player who is talented but not All-star caliber and who also happens to have the brittle body of a 45-year old. They got Goran Dragic; woohoo I guess? And they got a draft pick that will be in the mid 20s. And they got all this for the awesome price of taking on $70 million onto their payroll. What?????

Boston was willing to give them Rajon Rondo (on a great deal, mind you), Jeff Green, and two draft picks (one of which would likely end up being between pick 11 and 14 this year, since it was from the Clippers). A young stud, good contracts, a young guy with potential in Green, and a better draft pick. And yet Dell Demps turned this down. This was a much better package for New Orleans, especially when you consider their goals. Would Martin, Scola, and Odom make the team better in the short term? Yes, most likely. But that's not what we're discussing here. These are business decisions. The team would have been much better served with Boston's package in the long run, and that's what matters when you're trying to sell the franchise. A potential buyer doesn't care that this team will win 40 games each season for the next few seasons. A potential buyer wants a young team on lean contracts, with potential. A potential buyer wants a high pick in this upcoming stacked draft, to be able to get a rookie that can end up maybe being the new face of the franchise in a few years. The owner doesn't want 3 guys in their 30s or close to it.

When you look at it from the perspectives of the 29 other owners who own the Hornets, suddenly it makes a lot of sense why the owners were in an uproar and asked Stern to not approve the trade. In this trade, the Lakers were getting the best player and all the salary cap savings. This never happens. Dan Gilbert made a great point about this and I can't emphasize this enough, in spite of my overall disdain for Gilbert. The Lakers got the best player in the trade AND saved $20 million this year, and didn't even give up any draft picks. Because of this, the Lakers saved an additional $20 million in luxury tax. Mind you, luxury tax paid by a team goes into a pool that is distributed to the non-luxury-tax teams at the end of the year, as a sort of bonus for teams that stayed under the luxury tax threshold. The other non-tax owners would have been denied the extra $20 million the Lakers should have paid in luxury tax to them.

So, in effect, you have the other 29 owners who own the Hornets 1) footing the bill of the $70 million in salary taken back by the Hornets over the next few years, assuming a buyer isn't found, 2) being denied the luxury tax disbursement they would have gotten by the Lakers, and 3) being put in a tougher situation trying to sell the team to a potential buyer since the team is worse off in the long run. And all this good stuff for what? For the honor of gifting a top 5 player in Chris Paul to the Lakers, who would then undoubtedly be used to start another dynasty. Of course the owners (who again, mind you, control the Hornets) wouldn't sign off on this. It makes zero sense for all parties involved, except for the Lakers.

To give you an idea of what the Hornets should have been after, the most analogous example is Utah trading Deron Williams last year. It's especially apt since Chris Paul and Deron Williams are the top 2 point guards in the league. Utah moved Williams to New Jersey for Derrick Favors (a highly rated big man prospect who was just taken with the 3rd pick), two first round picks, and Devin Harris. They saved money, got a young big man with a lot of potential who may be the future face of the franchise, a young point guard who is on an okay deal, and two high picks in the 2011 and 2012 drafts. When you compare what Utah got with what New Orleans did, Utah totally made out like bandits. They're now in full rebuild mode, and will do much better in the long run than New Orleans would have.

Why did Demps do this trade then? A few reasons. Dell Demps made a good 'fantasy basketball' move. He made the team better in the very short term. He doesn't care about the business side of things. He's not the owner. He's not the one selling the team. He made the team better this year, since Chris Paul was going to leave anyway. And this is why stupid media pundits are "praising" him for what he was able to get. Cause they don't see the big picture either. Most importantly, Dell Demps was looking out for himself. He can turn around and pad his resume: "I lost Chris Paul but was still able to get pieces to have a 40-win team and sneak into the playoffs. I'm a great GM." The Hornets ownership (i.e. the rest of the league) stepped in and didn't approve cause it hurt the team when you look at the big picture.

Most importantly -- and this is somewhat conspiracy theory-ish -- Demps was forced into this position by Chris Paul. By all indications, the Hornets were about to make the trade with the Celtics. It was so close, in fact, that it was reported that Boston had ordered physicals on Chris Paul, which is one of the last steps teams take before a deal is done. Then, literally within the span of an hour, the deal fell apart, and the Lakers swooped in. What happened? As has been reported over the past week, Paul made it clear he didn't want to play in Boston. He said he wouldn't sign an extension. He wanted to go to a big market, notably New York. This resistance made teams like Golden State, the Clippers, and initially Boston back off. But Ainge changed his mind and, with immense testicular fortitude, decided he'd take the risk on Chris Paul being a 1-season rental. He was willing to gamble that he could get Paul to re-up for another contract after this year. Chris Paul was trying to use the only leverage he had - a threat that he would leave whatever team got him for a big market after this season - in order to secure a trade to New York or another big market and still be able to get the maximum amount of money. Paul would have to forego at least $24 million if he left whatever team he was traded to and signed with New York, so obviously it was vastly to his benefit if he was able to get traded to whatever team he wanted to right now, and re-up with them after the year. The problem was Ainge effectively called his bluff, by being willing to take the risk that Paul would not actually give up all that money and leave after the year. Ainge was daring Paul to put his money where his mouth is.

What follows is speculation:

And this is where I get real conspiratorial (tip of the hat to some realgm posters who speculated about this). I think with the Boston deal about to go down, Chris Paul and his agent basically told Ainge he wouldn't report to the team if he was traded to Boston.

Note: Chris Paul's agent is with CAA, the world's largest mega-agency, which also represents over 100 other players and exerts considerable influence on GMs since they can blacklist franchises in trades/signings for their other clients if the GMs don't listen to them, Mafia-style.

This was the only leverage Chris Paul had, the last threat he could make. And cause of this, the deal fell apart. All that was left was the awful, awful trade from the Lakers. Chris Paul held his team hostage, and they were forced to deal with a big market team (the Lakers) in order to get a deal done. And Dell Demps was happy to oblige, of course, cause on the surface it looks like the team got a pretty good haul. This is all speculative but the timeline fits, and when you hear Stern yesterday say the league is "tired of players dictating where they get to go in trades," well it all starts to makes sense.

[StocktonShorts]

Bravo, sir. This is 1000x better than all of the reactionary garbage that's been showing up on Yahoo! Sports and ESPN and other blogs.

[bimmer100]

Let it go, Paul will not go to the celtics and no top 5 player will as well once Allen and Garnett's contract get off the books. Get over it!!!!!!!

[ennui]

If you don't have anything to say don't post. Next time its a warning

[Bobbcats]

LOL all that writing and it's so wrong.

You completely miss the Hornets rationale. Do you think they can get tons of young players and picks in one trade? If they could they probably would. Instead they pile up as many assets as they can and a first rounder. These aren't bad contracts or bad players, they will be able to trade any of them fairly easily at the deadline for young players and picks. They can have a viable team for a few months, then at the deadline ship Scola and Odom and KMart to different playoff teams for prospects and picks. They will be able to get more this way than directly trading for young players, and they will fill out the roster for much cheaper considering how expensive FA's would be for a team in such an unattractive situation.

As far as some CAA conspiracy, Paul wasn't exclusively wanting to go to the lakers we already know he'd love to be Knick, said he wouldn't mind being a clipper etc. He is not under some moral obligation to extend for whoever the Hornets want him to extend for. The thing about a contract is it only holds for a certain amount of time, after that time is up CP can do whatever he wants. A lot of people on here seem to think that your team should be able to force you to extend your contract when trading. That's silly why wouldn't the Hornets just force CP to extend with the Hornets too? As long as he plays hard for the remainder of his contract wherever he ends up, he is under no other obligations.

[Warriors Analyst]

Bravo, sir. This is 1000x better than all of the reactionary garbage that's been showing up on Yahoo! Sports and ESPN and other blogs.

+1, a rational and well-thought take on this.

[CavemanDoctor]

bimmer: This isn't about letting it go. Honestly, I'm over the whole Chris Paul thing. I lost a lot of respect for him and am not pining for him to come to Boston like I was the past week.

Bobbcats: Miss the Hornets rationale? They had an offer on the table from Boston that gave them young players, better contracts, and better picks. Putting that aside, they couldn't even get a single pick from the Lakers? Really? And on top of giving up a top 5 player, they take on all that extra salary? The Lakers tried to pull a fast one on the league.

And for those trying to say the Lakers gave up a ton in Gasol + Odom (true), you can't look at this in isolation. They were receiving a ton of savings, a massive trade exception, and were undoubtedly about to make more moves, likely for Dwight Howard.

As for your point that Paul wasn't exclusively wanting to go to the Lakers but was also okay with the Clippers and the Knicks, umm thanks for proving my point? Last I checked, the Clippers and Knicks were also in the nation's two biggest markets.

[Grumpy Heat Fan]

I don't really care. We aren't Laker fans.

I side with Stern on this one. Veto the trade. I'm moving on with my life. Let the Laker fans cry about it.

[LeBronte Jest]

If you don't have anything to say then don't post in the thread. Next time is a warning

[Bobbcats]

Bobbcats: Miss the Hornets rationale? They had an offer on the table from Boston that gave them young players, better contracts, and better picks. Putting that aside, they couldn't even get a single pick from the Lakers? Really? And on top of giving up a top 5 player, they take on all that extra salary? The Lakers tried to pull a fast one on the league.

They got a pick in the deal. It's not their job to make sure it's the Lakers who pay the big price if the Rockets are willing, they only look at what goes in and what comes out of the Hornets.

And the salary argument is very disingenuous. Of course Lakers on the face save total salary in the long run because they are trading for a superstar "EXPIRER". That's not really what it's going to cost them in the long run.

On the other hand none of the contracts the Hornets acquire are actually bad contracts. It's like they broke a dollar bill into four quarters so they can make future trades easier. The other rebuilding bonus is that with this haul they don't have to spend as much on the FA market where they regularly have to overpay even when they have a real owner. they could probably come out of this season with 5 first round picks in a stacked draft next season.

[CavemanDoctor]

This latest report pretty much proves the general crux of my original post:

KBergCBS Ken Berger
In resumption of CP3-Lakers talks with Houston, Hornets under directive from NBA to get younger players, quality picks in deal, souces say.

Anyway, Bobbcats you WAY overrate Scola, Martin, and Odom. They can get FIVE picks in the 2012 draft? Are you kidding? You have no idea how the league works if you think that's true.

They were bad contracts. More importantly, they were especially bad contracts considering the unique state of the Hornets franchise, and the league's desire to sell it to a potential buyer.

[Grumpy Heat Fan]

David Stern is the owner of the Hornets. Just create an imaginary line in your head,

NBA Commissioner <------------> New Orleans Hornets Owner

He is acting as the New Orleans Hornets owner. Well within his right to do so. The trade in question from the Lakers was not acceptable, and I completely agree with him.

[Bobbcats]

This latest report pretty much proves the general crux of my original post:

KBergCBS Ken Berger
In resumption of CP3-Lakers talks with Houston, Hornets under directive from NBA to get younger players, quality picks in deal, souces say.

Anyway, Bobbcats you WAY overrate Scola, Martin, and Odom. They can get FIVE picks in the 2012 draft? Are you kidding? You have no idea how the league works if you think that's true.

They were bad contracts. More importantly, they were especially bad contracts considering the unique state of the Hornets franchise, and the league's desire to sell it to a potential buyer.

IF the trade went through they would have 2 picks. Scola to a playoff team at the deadline could get them a pick along with a young player. Odom to a playoff team at the deadline could do the same. Not sure about Kevin Martin, maybe not 5 but certainly 4 and some young players.

And whoever buys the Hornets isn't just going to look at the immediate salary picture in valuing the team, obviously if you're spending that much money you're going to do your homework as to the long term potential of the team. That part of the argument by stern is dumb. If the trade puts them in a better spot long term, it should be done. a team with no assets and a low salary isn't going to get more $$$ when sold than a team with a shot at rebuilding.

[Cammo101]

I'll cliff notes it a lot quicker: The NBA tried to gift Paul to the Lakers and set up Dwight to follow. The owners got pissed, put pressure on Stern and he nixed it to try to look like the good guy.

[haterade]

LOL all that writing and it's so wrong.

You completely miss the Hornets rationale. Do you think they can get tons of young players and picks in one trade? If they could they probably would. Instead they pile up as many assets as they can and a first rounder. These aren't bad contracts or bad players, they will be able to trade any of them fairly easily at the deadline for young players and picks. They can have a viable team for a few months, then at the deadline ship Scola and Odom and KMart to different playoff teams for prospects and picks. They will be able to get more this way than directly trading for young players, and they will fill out the roster for much cheaper considering how expensive FA's would be for a team in such an unattractive situation.

As far as some CAA conspiracy, Paul wasn't exclusively wanting to go to the lakers we already know he'd love to be Knick, said he wouldn't mind being a clipper etc. He is not under some moral obligation to extend for whoever the Hornets want him to extend for. The thing about a contract is it only holds for a certain amount of time, after that time is up CP can do whatever he wants. A lot of people on here seem to think that your team should be able to force you to extend your contract when trading. That's silly why wouldn't the Hornets just force CP to extend with the Hornets too? As long as he plays hard for the remainder of his contract wherever he ends up, he is under no other obligations.

Both Denver and Utah received draft picks, young players with potential and salary cap flexibility just this past February. Its not as impossible as it may seem. It may be impossible for the Lakers and Houston but not for a team like the Clippers or GSW.

[Wade2k6]

I'll cliff notes it a lot quicker: The NBA tried to gift Paul to the Lakers and set up Dwight to follow. The owners got pissed, put pressure on Stern and he nixed it to try to look like the good guy.

+1. Although I think the value in the CP3 trade was okay, the D12 trade would've been terrible. Orlando should be getting a hell of a lot more than an injury prone and overpaid center.

[Bobbcats]

Both Denver and Utah received draft picks, young players with potential and salary cap flexibility just this past February. Its not as impossible as it may seem. It may be impossible for the Lakers and Houston but not for a team like the Clippers or GSW.

I agree those are the teams that could do something, but the Knicks could offer that knowing Melo would stay and the Nets knew they'd have a season and a half to sell themselves to Deron or even trade him again. The Hornets probably can't get that kind of deal in their current situation.

[Cammo101]

I'll cliff notes it a lot quicker: The NBA tried to gift Paul to the Lakers and set up Dwight to follow. The owners got pissed, put pressure on Stern and he nixed it to try to look like the good guy.

+1. Although I think the value in the CP3 trade was okay, the D12 trade would've been terrible. Orlando should be getting a hell of a lot more than an injury prone and overpaid center.

The value is okay in a bubble. But, the best player was going to another team and the Hornets were getting a bunch of aging role players and not getting any picks or dumping any bad contracts.

It was a farce.

[Grumpy Heat Fan]

I'll cliff notes it a lot quicker: The NBA tried to gift Paul to the Lakers and set up Dwight to follow. The owners got pissed, put pressure on Stern and he nixed it to try to look like the good guy.

+1. Although I think the value in the CP3 trade was okay, the D12 trade would've been terrible. Orlando should be getting a hell of a lot more than an injury prone and overpaid center.

The value is okay in a bubble. But, the best player was going to another team and the Hornets were getting a bunch of aging role players and not getting any picks or dumping any bad contracts.

It was a farce.

Absolutely. It is interesting Demps was so eager to facilitate this move for Paul to LA. Oh, how I would love the NBA to investigate the Buss family. Part 2 of "Secret deal where LA trades their used up garbage for a superstar"

[demcanes26]

^^^ it said younger players and more picks. It never said anything about less salary. The Hornets have to add atleast 8 million to their payroll just to get to the mimium salary. If they trade Paul, they still have to 24 million this off season. Again, no one is going to give up their young talent without an extension from Chris Paul.