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Examining the tricky financial future in Oklahoma City and the inescapable legacy of the James Harden trade

Every dollar matters to the Oklahoma City Thunder. Which is why they’ve been in the news over the last 10 days for money-related tidbits that barely registered with casual fans — especially with the Lakers prepping for a 2014 free agent spending spree, and the Nets on course for a potential repeater tax payment the league hoped it would never see. The two little cap-related revelations barely amount to $3.2 million annually, the equivalent of Mirza Teletovic’s salary, but they say a lot about the state of the Thunder — where they are, where they’ve been, and what must happen for them to reassert their ownership of a Western Conference in which seemingly everyone but Oklahoma City has gotten better.

The two tidbits:

• The Thunder will pay Andre Roberson, the 26th pick in the draft, only 80 percent of his rookie scale amount, an alleged cheapskate move that will save them about $185,000 this season — at least when compared with the full scale amount.1

• The league’s Board of Governors, in a bizarre and controversial turnaround, voted in Las Vegas during Summer League to repay the Thunder part of the difference between what Kevin Durant would have earned under the old collective bargaining agreement and what he actually earns now. Durant signed his five-year maximum extension under the old CBA, but it didn’t take effect until after the unbearable lockout. In one of many bits of chaotic last-minute wrangling, the players’ union, with help from several agents, convinced the league that Durant should receive the “new” max salary instead of the older (lower) one, per several sources familiar with the process. Those sources disagree over whether the Thunder mounted a protest at the time, but some say the Thunder did so very quickly and have continued agitating since. The difference amounts to about $3 million per season, or about $15 million over the life of Durant’s megadeal. The league is repaying a portion of that $15 million, a signal that at least a majority of team owners — and perhaps the league office — agree they screwed the Thunder on that magical Thanksgiving weekend in which the lockout ended and basketball began again.2

The Durant Payback (which sounds like a Bourne movie title) has resulted in grumblings at various volume levels across the NBA, and a fun bit of speculation. The grumbling, straight-up angry in some places and more playful in others, centers on the idea that David Stern’s little pet in itty-bitty OKC received an unfair bit of special treatment — that the relationship between Stern and Clay Bennett, that old Seattle turncoat, is a bit too comfy.

The speculation is simpler: If Oklahoma City had known this cash was on the way, or if they could have kept Durant’s original salary number on their cap sheet, might they have kept James Harden for the long haul? And you can trace the ripple effects from there — from Oklahoma City, to Houston, to the Lakers, and to other franchises who might look very different if Harden were still a Thunder today.3

Both lines of thought are a little misguided, at least at their extremes. The extreme of the anger and jealousy from the other 29 teams amounts to something like this: “The new CBA sort of screwed us all, since we’re all carrying over remnants of the old CBA that look ugly in this new light. Why should the Thunder get special treatment? What does Bennett have on Stern?” The idea that the Lakers have enough cap space to sign two max-level free agents next summer, for instance, dies the moment you take 10 seconds to notice Kobe Bryant is already on the books for a cap hold worth nearly $32 million — a charge linked to Bryant’s ginormous max salary, built up over multiple CBAs that are no longer in effect. The same general point could be made on behalf of any team about to negotiate with a veteran player requesting a new maximum-level salary based upon his current salary — Carmelo Anthony, LeBron James, Dwight Howard (just completed), and others.4 The Heat voted against the new CBA in part because the harsh new tax rates threaten Miami’s ability to maintain the triple-max roster it constructed under the old CBA’s friendlier tax regime. Micky Arison and Pat Riley aren’t dumb; they knew the revamped CBA would likely carry a hard cap or stepped-up tax rates, and the league gave everyone a two-year grace period under the old dollar-for-dollar tax. But it wasn’t lost on the Miami contingent in Las Vegas during Summer League that the Durant Payback occurred just about 48 hours after the Heat had to slice away Mike Miller via the amnesty clause.

This is a slippery slope that draws some false equivalences from the Durant situation, which is very nearly a one-off — a strange case of the league agreeing to a last-minute pay bump for one player based on contract language open to interpretations. But there will be one or two such awkward situations with every CBA changeover, and the other 29 owners will watch very carefully for how the Adam Silver Experience handles the next set.

The Harden “What if?” is sexier, but the math says it probably also misses the point. It was going to be impossible for the Thunder to give Harden a max deal and avoid annual payrolls well over the league’s tax line — set for next season at $71.748 million. This would have been so even if the Thunder had amnestied the hideous contract of Kendrick Perkins and replaced Perkins with a player at the veteran’s minimum. (Paying Perkins to play for another team over multiple years never appears to have been an option for the Thunder.) Here are rough estimates of what Oklahoma City would have paid, with and without Perkins, in 2013-14 and 2014-15, had they re-signed Harden on a max-level contract and been able to keep Durant at his original (lower) salary figure:

2013-14: $86 million with Perkins; $78.5 million with a Perkins amnesty. Again: The tax line for next season is just less than $72 million, with the Thunder’s payroll set right now at about $70 million flat.5

2014-15: $89 million with Perkins; $80 million with a Perkins amnesty.

This is not to say the $3 million Durant gap would have made no difference. It’s significant, since the tax going forward starts at $1.50 for every dollar a team goes over the threshold. The estimated payroll figures with Harden on board, and with Durant’s actual (higher) salary, jump into the $95 million–$100 million range with Perkins still aboard and $85 million range with Perkins amnestied. Those are big gaps, since the tax jacks up the price of that extra $3 million for Durant.

James Harden But a third max salary for Harden, atop Serge Ibaka’s big new deal, would have been too much to swallow regardless. This is why the Thunder tried, in the high-pressure hours before the Harden deal, to re-sign Harden to something like a four-year, $52 million contract — a deal below the max, and one that would have paid Harden $11.5 million in Year 1 and $12.5 million in Year 2. People laughed at the small difference between that kind of contract and the four-year, $60 million deal Harden actually wanted, but the difference absolutely mattered. Every dollar matters for Oklahoma City.

This is a team that makes about $15 million from its local television deal; the Lakers make $250 million per year from theirs. The Thunder just lowballed Roberson in order to make sure they duck the tax this season and delay the repeater clock one more time. Oklahoma City paid into the league’s revenue-sharing system last season instead of getting a boost from it, according to several sources with knowledge of the plan.

Which is to say, the only way it would have been workable for Oklahoma City to keep all four of its young stars would have been the double-win of keeping Durant’s old salary on the books and convincing Harden to take significantly less than the max. Going 1-for-2 probably wasn’t enough. Going 2-for-2 and amnestying Perkins would have at least raised the possibility of staying below the tax and bringing the total payroll bill (including Perkins’s salary) down into the $76 million range for both 2013-14 and 2014-15 — still a tough sacrifice, but one the Thunder might have at least contemplated, with the expiration of Perkins’s contract finally coming after the 2014-15 season.

But Harden wanted a max deal, and he deserved one. Given that basic reality, the four-star dream was financially unattainable. The problem for the Thunder now is that their Harden replacement, Kevin Martin, is gone, and Oklahoma City has precisely zero proven NBA players on hand to fill those minutes on the wing. This would seem a problem within the Western Conference, which has somehow gotten tougher at the top. The Harden trade represented the first big step in the creation of a new contender in Houston. The Spurs just get better. The Clippers might have the league’s best offense next season. The Grizz might have the league’s best defense, they’ve added Miller for shooting on the wing, and they’ve put enough names in play (Tony Wroten, Nick Calathes, Josh Akognon, and maybe Mo Williams) to very nearly guarantee they’ll stumble into productive backup point guard minutes almost by accident. The Warriors will be a small-ball pain in the butt.

The Thunder, meanwhile, have lost one key contributor and replaced him with essentially nothing. Want to see the cost of the league’s salary-boosting ruling on Durant? Look here. Slice $3 million off Durant’s salary, and the Thunder could have wiggled as much as about $5 million below next year’s tax — enough to put a large portion of the midlevel exception in play.6 Maybe that’s enough to get Miller. Maybe it’s enough to convince, say, Kyle Korver to take a reasonable discount and work as the Thunder’s missing ingredient.7 And failing that, it clearly would have been enough to nab someone among the Marco Belinelli–Mike Dunleavy Jr.–Carlos Delfino tier.

Or go backward if you prefer: Maybe that $3 million cushion allows the Thunder to trade Eric Maynor for a useful player, one with a higher salary than Maynor, instead of for a Euro-Stash guy who will never play here and whose last name makes me hungry for pretzels. The Thunder have instead whiffed on every wing shooter with a market above the veteran’s minimum. They’re left to play hardball with a rookie and hope to make some use of the $7 million trade exception they nabbed in the three-way deal that sent Martin to Minnesota.

No one is crying for the Thunder. The league is repaying them some sweet, sweet cash, and they still have two of the NBA’s 10 best players — a recipe for constant title contention. These guys, even post-Beard, rang up the league’s best overall point differential and looked like the favorites in the Western Conference before Russell Westbrook’s knee injury. They are a lock to rank among the league’s top three offenses every season. And in something of an overlooked development, their defense keeps getting better. Oklahoma City ranked third in points allowed per 100 possessions last season, behind only Memphis and Indiana, and just 2.6 points behind the Pacers’ league-best mark, per It ranked ninth in 2011-12, nearly five full points back of the league-best Bulls, and it was an average defensive team in the lockout season.

That’s a feather in the cap of Scott Brooks and his staff, and there’s no reason to expect any regression. The Thunder realized midway through the 2012 playoffs that they could be a massive problem if they took one collective step closer to the lane, closed off the paint, and used their terrifying athleticism to cover the distance back to outside shooters. Ibaka legitimately scares people near the rim. The Thunder are young and prone to some exuberant positioning mistakes, but the league should be very worried if Oklahoma City settles in as a top-three or top-five defense every season. And the loss of Harden, to be polite, isn’t hurting them on that end.

The questions come on the other end, which is weird to say, since the Thunder are a scoring powerhouse. But they’re a predictable scoring powerhouse, and being predictable becomes more of an issue in the postseason, when the best defenses have days to scout the opposition. Oklahoma City doesn’t have an offensive system; they have a half-dozen or so pet actions designed to produce various endgames — Westbrook driving to the basket on a pick-and-roll, Durant getting the ball in the high post against a switch, Ibaka popping for a jumper.

The best defenses do a better job containing those actions when operating with heightened awareness. Teams that stayed needlessly close to Perkins and Thabo Sefolosha in some random February game shift an extra step or two off them under playoff urgency. That’s often enough to bottle up that first pet action, and after that, the Thunder have nowhere to go — no counters, no dribble handoffs, no weakside action, no flow. They are not the Spurs, or even the Bulls, at least in terms of continuity. Contain that first action, and a defense is usually left to contain something simple — a Durant or Westbrook isolation, or a high pick-and-roll the defense can see coming a mile away, one that features Durant or Westbrook dribbling at a standstill as the big man scrambles up to set a pick.8

Again: The Thunder are going to score at an elite rate over a full season as long as Westbrook and Durant are healthy, even if I’m the head coach. Those guys are killers, and they’re getting better every day. But the Westbrook injury exposed the total lack of any system here, and as long as the Thunder play this way, they risk hitting a potentially fatal scoring drought as they navigate the brutal Western Conference playoffs. It probably isn’t a coincidence that three of the six teams that relied most on isolation plays in the regular season — New York, Oklahoma City, and the Clippers, per Synergy Sports — saw their offenses wilt in the playoffs against elite defenses.

This isn’t all on coaching, though the Thunder internally have been aware for years that Brooks and the rest of the staff are eventually going to have to do better in constructing an offensive system. The Thunder have slow-played the complexity in part because of the youth of the roster. They’ve added bits of motion-based stuff here and there, but nothing resembling a system. It’s time to accelerate the process, especially given the turnover in the “third scorer” role from Harden to Martin to Jeremy Lamb, DeAndre Liggins, Perry Jones, or Reggie Jackson. (Or, I guess, newly signed Ryan Gomes.)

But some of this is also a personnel issue. The Thunder simply have too many players whom defenses don’t care to guard — players who can only hurt teams so much with their shooting, and who absolutely cannot hurt them off the dribble when the ball swings their way. Sefolosha, Jackson, and Derek Fisher (still?) shoot a respectable percentage on absolutely wide-open 3-pointers, especially from the corners, but playoff defenses have correctly concluded that allowing a decent number of such shots in order to throw multiple defenders at Durant and Westbrook is a winning trade-off.

This is in part because those perimeter guys can’t do a thing off the bounce; good defenses will wipe away enough of those open shots with good closeouts, and those guys are basically incapable from there. Durant and Westbrook are also a bit turnover-prone on the pick-and-roll when they face a crowd; the Thunder turned the ball over on nearly 20 percent of possessions a pick-and-roll ball handler finished last season, the seventh-highest cough-up rate in the league, per Synergy. Neither star is an elite yo-yo handler yet, and though both have gotten better at making themselves available away from the ball — a key way to generate space — Durant still goes through possessions on which he does little more than stand with his hands on his hips.

The Heat also have two ball-dominant stars — a historically great wing (LeBron = Durant), and an ultra-athletic, mean-spirited slasher with a shaky long-range shot (Wade = Westbrook). The difference is in the details, and the surroundings. The Heat surround their stars with expert shooting and at least one big man in Chris Bosh capable of initiating dangerous stuff from the elbows. Miami usually has at least one other perimeter player capable of some high-level drive-and-kick stuff; Mario Chalmers is the best of that group, but even Shane Battier will unveil a veeeerrrrrrry sloooowww baseline shimmy now and then. Bosh has become a Nowitzkian midrange shooter, and Udonis Haslem at least fakes it. When the spacing gets a little tight, Miami can go small — sometimes for damn near entire halves, regardless of opponent.

The Thunder don’t have these things, and now they don’t have Harden or Martin. They are counting on internal growth to deliver them, which is a very Thunder thing to do.9 Brooks is still in love with Perkins, even though Perkins can barely move on offense without turning the ball over, and the Perkins-Ibaka duo can hurt the team’s spacing against smart defenses.

Since Perkins can’t shoot (or dribble, or post up), the Thunder have to use him strictly as a screener when he’s on the floor, a setup that relegates Ibaka to lots of off-ball spot-up duty away from the pick-and-roll. That’s fine; Ibaka is a very good midrange shooter. But it has also hamstrung Ibaka’s development as a real offensive centerpiece. He should have Tyson Chandler–like potential as a pick-and-roll dunker sucking in attention all over the floor with hard slips to the hoop, but he prefers popping out for jumpers, and he’s still learning the balletic timing of those hard cuts when he does try them. He still can’t really pass — just 0.6 assists per 36 minutes last season, same as the year before — which limits what he can really contribute from the elbow area beyond jumpers.

If you’re going to play two traditional big men heavy minutes, they’d better both be wily cutters, screeners, and passers from the foul line area — capable of initiating the offense, setting screens at unpredictable angles (and switching those angles at the last minute), and firing creative passes. Only Nick Collison really fits that bill among Oklahoma City’s big men.

Ibaka will likely get there, or at least someplace approximating “there.” He’s a good shooter, and he has shown glimpses of pick-and-roll sophistication — a catch-and-dunk, or a pick-and-roll on which he catches on the move, pauses to read the defense, and fires an immediate pass to a cutter along the baseline. That is scary when it happens, which is not often.

But the development has been uneven almost across the board. This is why there is a school of NBA executives — perhaps 20 percent of the people I’ve discussed this with over the last 10 months — who insisted, even before the Harden trade, that they’d have kept Harden over Ibaka. And that was the choice Oklahoma City made, even if Ibaka’s lower market value — both as a free agent signing and as a trade piece — helped drive that choice. (This is different than asking whether the Thunder should have waited through last season to trade Harden, but we’ve beaten that one to death.)

Harden is a rarer talent, these folks say, and the Thunder would have been more dangerous with three perimeter stars and a rotating cast of Carl Landry or Brandon Bass–type big men around the usual minimum-level cheapies.

Maybe. That question will take years to answer. Ibaka is already one of the 10 best interior defenders in the league, and that itself is a very rare commodity — let alone at his age. And there is, of course, just one ball to go around among all that perimeter talent.

But this season without a proven bench scorer — at least so far — will test the Thunder’s choice. It will test the development of their three stars, of the young players the franchise has groomed as a support system, and, perhaps most of all, of Brooks. Oklahoma City’s core is still too young to declare this a “referendum” season on all of the above, but it’s clear just getting out of the Western Conference is going to be brutal for the next few seasons. Doing so once looked like Oklahoma City’s birthright. It has the talent to do it, and even to emerge as the clear favorites by May. But for the first time in a while, there’s serious work to be done first.

Filed Under: Future, James Harden, Oklahoma City Thunder, People, Series, Teams

Zach Lowe is a staff writer for Grantland.

Archive @ ZachLowe_NBA