Daryl Morey has a $22.5 million asset to peddle, which is why the Rockets' general manager pulled his entire staff of basketball analysts and scouts off the road and into a conference room in Houston last week. For two days the 10 studied video of players—and it's a large number of players—they might acquire before the Feb. 18 trade deadline for the mammoth expiring contract of guard Tracy McGrady. In the salary-cap-driven NBA, any deal that frees up future payroll holds appeal, even if it belongs to an All-Star-in-decline who has played just 45 minutes this season. But it's especially so this year, given this summer's attractive free-agent class.
"There's been significant interest," acknowledges Morey, an Executive of the Year candidate who has kept the Rockets in playoff contention despite seasonlong injuries to McGrady, who has had left-knee surgery in each of the last two seasons, and center Yao Ming, who has a broken bone in his left foot. "We have a good sense of who's trying to do what, the major players who may be involved from each team, the deals teams would do with us and the deals we would be willing to do with them. But right now they're all fairly far apart."
There's the rub. In Morey's eyes a contract like McGrady's is more valuable than ever, as many teams are dying to clear salary-cap space so they can throw big money this summer at the long-anticipated free-agent class of LeBron James, Dwyane Wade, Chris Bosh and Joe Johnson. But given the grim state of the game's economy, nearly all of Morey's potential trading partners are interested in bargain-hunting, which is why he didn't come close to consummating a deal last week.
And further complicating matters is a dark cloud looming on the horizon: a potential lockout in July 2011 that will likely lead to an overhaul in the way teams do business. A sea change is inevitable for the NBA because at least half of its franchises are losing money, according to several executives. (Not even the healthiest league in the sports universe is immune to labor strife. Last week NFL union chief DeMaurice Smith was asked to place the likelihood of a lockout in 2011 on a scale of one to 10. He said 14.) Most teams are dreaming of—and simultaneously bracing for—relief in the form of a hard cap on salaries, which will likely be a major sticking point in the next collective bargaining agreement and would limit the damage that owners could do to themselves. Indeed, some teams are interested in picking up contracts like McGrady's not because they want to clear cap space so they can spend more but so they can cut their payroll ahead of an anticipated hard cap.
The uncertainty that comes with trying to win now while planning for a long term that defies prediction is making it more difficult than ever for executives like Morey to put deals together. "We're all trying to do business, and we have no idea what the future holds," says a Western Conference G.M. "It's not like it was a secret that after next season there was going to be a potential work stoppage, but it just seems to be like now, all of a sudden, people are paying attention to it. And none of us knows what it's going to mean."
Of course, there will be a few gaudy contenders who will seek deals no matter what the risk.
Trades, anyone? Quite a lot of talent is available, but there are only a few buyers willing to take on salary. The Cavaliers look likely to acquire another big contract in order to improve their championship hopes and persuade James to remain in Cleveland this summer. The Mavericks will be looking to steal a star or two because that's what makes owner Mark Cuban's world go 'round, his luxury-tax penalties be damned.
Formidable sellers include the Suns (offering All-Star center Amar'e Stoudemire, who can opt out of a contract that pays $17.6 million next season), the 76ers (swingman Andre Iguodala, with an onerous $69 million on the books through 2013--14), the Kings (shooting guard Kevin Martin, at $44 million through 2012--13), the Pacers (6'11" Troy Murphy, at $23 million for two years) and the underperforming, scandalized and up-for-sale Wizards. Washington is open to moving anyone on its roster, with All-Star forwards Antawn Jamison ($40 million over three years) and Caron Butler ($20 million over two years) the most attractive on the market.
The question is: Will buyers be willing to offer expiring money for those players? The Rockets are trying to move McGrady's contract, but the long-term costs of what they must take in return may be too steep. Dallas can leverage a pair of highly attractive contracts belonging to center Erick Dampier (who will make $13.1 million next year, the last of his deal) and forward Josh Howard (whose 2010--11 salary of $11.8 million can vanish at the team's option). But if Cuban doesn't get the piece he desires—a wing player like Martin or Iguodala—he has the luxury of holding back for now and making a sign-and-trade push for one of the big free agents this summer.
The Cavs cannot afford to wait, even though they held a 6½-game lead in the Eastern Conference at week's end. They failed to reach the Finals as front-runners last season, which is why they have been pursuing the 6'9" Jamison. A 33-year-old power forward, he brings leadership, scoring (20.6 points per game through Sunday) and rebounding (8.9 per game) and would space the floor for Shaquille O'Neal inside—and for LeBron everywhere. In addition to second-year power forward J.J. Hickson, a draft pick and up to $3 million in cash, the Cavaliers can offer the expiring $11.5 million contract of center Zydrunas Ilgauskas—with hope that the Wizards would be open to a buyout (if Ilgauskas so chooses) that would enable the 7'3" center to return to Cleveland in time for the playoffs.