Wiz trade Shard and 2nd rounder for Okafor and Ariza

[veji1]

Technically KS is a sunk cost (we can't get the 17th pick back for example) , however the cost is minimal relative to the benefit. Sunk costs are generally referring to situations when the cost far exceeds the benefit which is the case with Shards contract, a heavy cost with no benefit.

Well then we just got rid of a sunk cost by trading him for Okafor and Ariza who are less sunkcostly

Am i right ?

[hands11]

I'm sorry, but you still don't get it. The 14 million was and is a sunk cost. We traded that sunk cost for an equivalent sunk cost of Charlotte players. But then we threw another 25-30 million (don't know the exact figure) for two years of Okafor and Ariza.

Look, again, my original post was only saying that our financial position before and after the trade should be described accurately by all, that Leonsis was not doing that, and that the position that "Leonsis would never pay Lewis 14 million to go away" either is inaccurate or reflects poorly on Leonsis.

I also would protest if people start complaining about us adding 40 million dollars salary in Okafor and Ariza--that would be equally dishonest.

Look, every NBA contract is sunk cost since they are guaranteed contracts. So what. That sunk cost also has an asset value. The Wiz turned one big annual sunk cost contact that was for one year contract and unproductive into two smaller cost assets that are more productive.

[DCZards]

They are in a very different position because they are just starting the rebuilding process. this is something that is important: a Franchise is dynamic, we need to get moving or stagnation will lead to rot.

What I mean is that we can't act like we are at the beginning of a rebuilding process, while Wall is starting his 3rd year- Without move this year to have cap flexibility for 2013 that team was very very short : we are one injury to Nene away from being again a 25 wins team...

Agreed. The Zards and the Hornets are in very different places as far as the rebuilding process is concerned. The Zards have as their cornerstones an overall #1 pick going into his third year in the league and a veteran center (Nene). The Hornets have an overall #1 pick who has yet to play an NBA game, a star SG (Gordon) who they traded for last year but was injured and barely played, and an owner entering his first full year at the helm.

[tontoz]

Technically KS is a sunk cost (we can't get the 17th pick back for example) , however the cost is minimal relative to the benefit. Sunk costs are generally referring to situations when the cost far exceeds the benefit which is the case with Shards contract, a heavy cost with no benefit.

Well then we just got rid of a sunk cost by trading him for Okafor and Ariza who are less sunkcostly

Am i right ?

We got rid of a 13 million cost and replaced it with a 40+ million cost, assuming both players pick up their options which they are almost 100% sure to do.

[Bickerstaff]

Technically KS is a sunk cost (we can't get the 17th pick back for example) , however the cost is minimal relative to the benefit. Sunk costs are generally referring to situations when the cost far exceeds the benefit which is the case with Shards contract, a heavy cost with no benefit.

Well then we just got rid of a sunk cost by trading him for Okafor and Ariza who are less sunkcostly

Am i right ?

We got rid of a 13 million cost and replaced it with a 40+ million cost, assuming both players pick up their options which they are almost 100% sure to do.

Oh wait--so you're saying you DON'T like this trade?

[willbcocks]

Hands and Veiji: I wish I could continue this debate because I thought there was some point we were contending, but we are talking past one another. I encourage you to learn more about economics and the CBA, because you're simply wrong here.

I hope (and think it's likely) that Leonsis isn't making the same mistake, but instead believes in the power of a veteran lockerroom.

[willbcocks]

Nate, is it at all possible for the team to decide that they don't want to retain Booker and/or Seraphin in an attempt to sign a fee agent? Basically we add Wall's 14 mill and the 2014 1st rounder's 1.2 and that takes us to 38.8 million in salaries with the following 6 players:

Wall, Nene, Vesely, 2012 1st rder, 2013 1st rder, 2014 1st rd

Which at best would make it about $18M in cap space. My point i guess is that by 2014, we will know if guys like Booker, Seraphin, etc. are worth continuing to build around or if we should renounce them and sign a near max free agent to add to Wall, Beal, Nene, Vesely, and our next two 1st rounders.

MDStar: Yes, that is possible. Cap holds exist because a team has exercised its birds rights on a player but not yet signed him to a contract. In other words, if the team doesn't want to resign a player, it can decline the bird rights and have absolutely no cap hold. Unfortunately, this means that any advantage that team had in resigning the player disappears.

The other way a cap hold can be eliminated is if the player actually signs a contract. This could mean a significant cap "savings" if the player is signed for below his cap hold, which I think is normally 3x the salary. As Booker and Seraphin were both late first round picks and have correspondingly small contracts, and both appear like they will be productive players during the last year of their contracts, this seems like a poor bet to provide significant cap savings.

One alternative would be to kick the value can down the road, trading booker for a mid or late first. That way the salary would be much lower during the 2014 offseason, as they would still be on their rookie deal and not yet a RFA.

[Nivek]

The Wiz would be a much more attractive free agent destination if they had max salary cap room.

I don't buy that.

You're right. Basketball players have little interest in money.

[veji1]

Hands and Veiji: I wish I could continue this debate because I thought there was some point we were contending, but we are talking past one another. I encourage you to learn more about economics and the CBA, because you're simply wrong here.

I hope (and think it's likely) that Leonsis isn't making the same mistake, but instead believes in the power of a veteran lockerroom.

OK willbcocks it is nice of you to encourage me to learn more about Economics, which I am sure you do with the slightest hint of condescension. Thank you for explaining to me that a contract one is committed to means that the money owed has to be considered a cost, Yay !

So Lewis had a contract! Massive discovery here. Now instead of using college linguelese such as Economics 101, or bragging about your semi-pro poker carreer please make your point clear to my poor foreign limited english understanding.

Did you mean that the money owed to lewis was x and that that being wasted money, being able to get out of the contract by paying him x-y was the right decision (ie take your losses and move on)? Is that what you meant by it being a "sunk cost"? because otherwise every contract signed, to the extent that the money is guaranteed, is a sunk cost.

I genuinely think I don't understand the point you are trying to make. and would be very grateful if you could explain it to me once more.

[fishercob]

The Wiz would be a much more attractive free agent destination if they had max salary cap room.

I don't buy that.

You're right. Basketball players have little interest in money.

They can only take it from one place, though.

With the news coming out that Deron Williams will only consider Brooklyn or Dallas, how do teams feel who cleared a bunch of room in the hopes of luring him (Portland, Indy, Phoenix, Houston.

Houston has gone after the big FA's for a few summers now and continually struck out. Planning around cap space seems to carry some risks.

[nate33]

That's $23.6M right there. We will have the following cap holds:

Wall - $14M
Seraphin - $6.9M
Booker - $5.9M
2014 1st round pick - $1.2M

Question on the cap holds: when can those guys be extended? Meaning, if we extend them for less than their cap holds, that's more room we will have, yes? I have a hard time seeing booker and seraphin combining for $13m per year on their next deal.

cap holds are irrelevant if a new contract is agreed upon. the new contract would become the salary cap. cap holdss can also be ignored if the playerr is renounced

[veji1]

Considering sunk cost is about making good decisions. The 14 million dollars was Lewis's already. The decision management faced was whether they wanted to pay him 10 million dollars for another year of his services or cut him. If it were my money, I certainly would have cut him. I played poker semi-professionally for a while, and if you don't want to lose money, you must cut your Lewises.

Ok back to the core of the argument (and sorry for the sarcastic post above). So from your perspective, the Franchise had to pay him 14 millions anyway, so in a sense those 14 millions had to be taken away from the equation, as in admit that they are gone. And you consider that then the staff had three choices:
- Cut your losses and limit them to those 14 millions.
- keep Lewis on the payroll and add close to 10 millions for hardly any playing time
- trade that contract for something else, in this case, Okafor and Ariza who are owed 43 millions over 2 years, so an extra 29 millions compared to the unavoidable cost of 14 million (the sunk cost in question).

Have I understood you correctly?
Well in that case you could also explain it as : 14 million were goint to be lost anyway to Lewis. The FO decided that rather that losing outright those 14 million, it would parlay the loss into a few more vets. Now those 14 mils being a sunkcost and the FO basically accepting that, for a mere 7 millions this year and 22 million next season, the franchise gets to add 2 quality vets in Okafor and Ariza. 7 millions for this year is super duper fantastic deal !

Overall, since those 14 millions were lost anyway before the trade, the FO managed to sign Okafor and Ariza, who will help the team grow in its defensive identity for only 29 over 2 seasons. That is a pretty good short term deal...

Now have I skewed the logic of the "sunk cost" argument here or what?

[montestewart]

cap holds are irrelevant if a new contract is agreed upon. the new contract would become the salary cap. cap holdss can also be ignored if the playerr is renounced

Nate33, what about the MLE language in the Leroux article. Maybe I'm the only one that didn't understand what he was talking about, but I don't. How does that fit in for teams under the cap?

[tontoz]

They can only take it from one place, though.

With the news coming out that Deron Williams will only consider Brooklyn or Dallas, how do teams feel who cleared a bunch of room in the hopes of luring him (Portland, Indy, Phoenix, Houston.

Houston has gone after the big FA's for a few summers now and continually struck out. Planning around cap space seems to carry some risks.

Houston signed Gortat but then Orlando matched. Houston must have been pissed when they turned around and traded Gortat to the Suns.

[willbcocks]

Considering sunk cost is about making good decisions. The 14 million dollars was Lewis's already. The decision management faced was whether they wanted to pay him 10 million dollars for another year of his services or cut him. If it were my money, I certainly would have cut him. I played poker semi-professionally for a while, and if you don't want to lose money, you must cut your Lewises.

Ok back to the core of the argument (and sorry for the sarcastic post above). So from your perspective, the Franchise had to pay him 14 millions anyway, so in a sense those 14 millions had to be taken away from the equation, as in admit that they are gone. And you consider that then the staff had three choices:
- Cut your losses and limit them to those 14 millions.
- keep Lewis on the payroll and add close to 10 millions for hardly any playing time
- trade that contract for something else, in this case, Okafor and Ariza who are owed 43 millions over 2 years, so an extra 29 millions compared to the unavoidable cost of 14 million (the sunk cost in question).

Have I understood you correctly?
Well in that case you could also explain it as : 14 million were goint to be lost anyway to Lewis. The FO decided that rather that losing outright those 14 million, it would parlay the loss into a few more vets. Now those 14 mils being a sunkcost and the FO basically accepting that, for a mere 7 millions this year and 22 million next season, the franchise gets to add 2 quality vets in Okafor and Ariza. 7 millions for this year is super duper fantastic deal !

Overall, since those 14 millions were lost anyway before the trade, the FO managed to sign Okafor and Ariza, who will help the team grow in its defensive identity for only 29 over 2 seasons. That is a pretty good short term deal...

Now have I skewed the logic of the "sunk cost" argument here or what?

This is basically correct except for one point.

You said: "The FO decided that rather that losing outright those 14 million..."

My quibble is that this again frames the option as our MGT having some chance not to lose the 14 million. No matter which option they choose, the money was lost "outright." The option they did have was using the rest of Lewis's contract, the 10 million dollars in savings that they could receive themselves, as an asset in a trade. That is what they chose.

Anyway, the following paragaph is correct and is the debate we should be having:

Overall, since those 14 millions were lost anyway before the trade, the FO managed to sign Okafor and Ariza, who will help the team grow in its defensive identity for only 29 over 2 seasons. That is a pretty good short term deal...

[fishercob]

They can only take it from one place, though.

With the news coming out that Deron Williams will only consider Brooklyn or Dallas, how do teams feel who cleared a bunch of room in the hopes of luring him (Portland, Indy, Phoenix, Houston.

Houston has gone after the big FA's for a few summers now and continually struck out. Planning around cap space seems to carry some risks.

Houston signed Gortat but then Orlando matched. Houston must have been pissed when they turned around and traded Gortat to the Suns.

Pretty sure that was Dallas.

I believe Houston went hard after Bosh and came up empty. I think they were in on Nene too.

[tontoz]

Ok back to the core of the argument (and sorry for the sarcastic post above). So from your perspective, the Franchise had to pay him 14 millions anyway, so in a sense those 14 millions had to be taken away from the equation, as in admit that they are gone. And you consider that then the staff had three choices:
- Cut your losses and limit them to those 14 millions.
- keep Lewis on the payroll and add close to 10 millions for hardly any playing time
- trade that contract for something else, in this case, Okafor and Ariza who are owed 43 millions over 2 years, so an extra 29 millions compared to the unavoidable cost of 14 million (the sunk cost in question).

Have I understood you correctly?
Well in that case you could also explain it as : 14 million were goint to be lost anyway to Lewis. The FO decided that rather that losing outright those 14 million, it would parlay the loss into a few more vets. Now those 14 mils being a sunkcost and the FO basically accepting that, for a mere 7 millions this year and 22 million next season, the franchise gets to add 2 quality vets in Okafor and Ariza. 7 millions for this year is super duper fantastic deal !

Overall, since those 14 millions were lost anyway before the trade, the FO managed to sign Okafor and Ariza, who will help the team grow in its defensive identity for only 29 over 2 seasons. That is a pretty good short term deal...

Now have I skewed the logic of the "sunk cost" argument here or what?

You got the sunk cost part right.

Now the "two quality vets" (neither of whom fills the glaring need for shooting) is the issue, not to mention the opportunity cost. I fail to see how Ariza can be referred to as a quality vet. There is a reason this is his 6th team in 8 years.

[veji1]

The Houston example is relevant. guys don't realise how hard it is to sign a FA. A real Star will have 5 or 6 franchises who will have cleared capspace for them. Who will they chose between teams like the Mavs or Boston on one hand and the Wizards on the other??

Than you have second tier stars who will also get tons of money. Take Chicago. in 2010 they had space for 2 max deals, but Lebron and Bosh went to Miami and they ended up paying Boozer 80 mils... And we are not talking about a bottom dweller here, but about Chicago with Rose and Noah and Deng...

For the wizards at this stage to keep on building through the draft would be dangerous because it would imply remaining a bad team with the risk of rot that was starting to spread last season, and they cannot build through FAs yet because they are not an attractive destination and would have to massively overpay ( I am french and like Batum, but paying him 80/5 would be a dreadful decision and there is no way the Wizards get him for less, it might actually take more)..

So the only way in between are trades. They started doing it with Nene and continue with Okafor and Ariza. Not surprisingly, the young albeit talented knuckleheads that are McGee and Young yielded a better return than Lewis's overpriced corpse... But the staff are taking the only way possible short term.

Now medium term hopefully, if the team has become a solid defensive team sneaking into the playoffs à la Bobcats 2009 BUT with young players such as Wall, Beal and KS showing there mettle along the vets. than FAs might be interested... Or further trades might be possible whereby one of the young guys + some of the expirings can get you a disgruntled star...

[Ruzious]

I'm sorry, but you still don't get it. The 14 million was and is a sunk cost. We traded that sunk cost for an equivalent sunk cost of Charlotte players. But then we threw another 25-30 million (don't know the exact figure) for two years of Okafor and Ariza.

Look, again, my original post was only saying that our financial position before and after the trade should be described accurately by all, that Leonsis was not doing that, and that the position that "Leonsis would never pay Lewis 14 million to go away" either is inaccurate or reflects poorly on Leonsis.

I also would protest if people start complaining about us adding 40 million dollars salary in Okafor and Ariza--that would be equally dishonest.

Look, every NBA contract is sunk cost since they are guaranteed contracts. So what. That sunk cost also has an asset value. The Wiz turned one big annual sunk cost contact that was for one year contract and unproductive into two smaller cost assets that are more productive.

What math do you use?

Lewis had 13 mil guaranteed left on his contract. Okafor has 27 mil and Ariza has 16 mil, as far as I know. I read somewhere that Okafor's last year might not be quaranteed. Does anyone know whether or not it is?

[tontoz]

They can only take it from one place, though.

With the news coming out that Deron Williams will only consider Brooklyn or Dallas, how do teams feel who cleared a bunch of room in the hopes of luring him (Portland, Indy, Phoenix, Houston.

Houston has gone after the big FA's for a few summers now and continually struck out. Planning around cap space seems to carry some risks.

Houston signed Gortat but then Orlando matched. Houston must have been pissed when they turned around and traded Gortat to the Suns.

Pretty sure that was Dallas.

I believe Houston went hard after Bosh and came up empty. I think they were in on Nene too.

You're right. At least i had the right state lol.