How the Grizzlies Cleared Over $16 Million
The Memphis Grizzlies have cleared in the neighborhood of $16 million in a pair of deals that unloaded the contracts of Rudy Gay and Marreese Speights.
On Wednesday, Gay and Hamed Haddadi were sent to the Toronto Raptors. The Raptors in turn sent Ed Davis, a 2013 second-round pick and cash to Memphis. The Detroit Pistons also sent Tayshaun Prince and Austin Daye to the Grizzlies, in return for Jose Calderon from Toronto.
Just over a week earlier, the Grizzlies sent Josh Selby, Wayne Ellington, Speights and a first-round pick to the Cleveland Cavaliers for Jon Leuer.
The Speights’ deal set up the Gay trade, which was structured as three transactions.
- When Speights was traded to Memphis, the Grizzlies attained a $4.3 million trade exception. The Grizzlies used that exception to acquire Daye, who makes $2,958,077 this season. Memphis is left with $1,241,923 remaining in the Speights exception.
- The Grizzlies traded Gay, who makes $16,460,538 this season, for Prince ($6,764,045) and Davis ($2,207,040). With the two making a combined $8,971,085, Memphis also received a trade exception for the difference ($7,489,453).
- Haddadi was traded to the Raptors without any salary coming back in return, generating another Memphis trade exception ($1.3 million).
The Grizzlies now have seven trade exceptions:
- $7,489,453 Rudy Gay, expiring 1/30/14
- $2,083,042 Wayne Ellington, expiring 7/22/14
- $1,300,000 Hamed Haddadi, expiring 1/30/14
- $1,241,923 Marreese Speights, expiring 1/22/14
- $1,184,750 Sam Young, expiring 3/15/13.
- $1,000,000 Jeremy Pargo, expiring 7/25/13
- $762,195 Josh Selby, expiring 1/22/14
On the Raptors-Pistons side of the coin, Calderon received a trade bonus on 10 percent of his remaining salary, which should be about $484,609. For salary cap purposes, he’ll show on Detroit’s books at approximately $11,046,591.
Neither the Raptors nor Pistons received any trade exceptions in the multi-team trade.
The Grizzlies were originally committed to $74.2 million in salary. They faced a tax bill of $3.8 million for an inclusive total of $78 million.
After the pair of deals, Memphis’s total salary is just $62.1 million. That’s a $15.9 million savings plus whatever cash they received from Toronto (estimated at $1.2 million).
Given how much Gay was set to make over the coming years, the fiscal relief is even more substantial.
The merits of swapping out Gay, Speights, Ellington and Selby for Leuer, Prince, Davis and Daye on the court may be debatable but economically, it’s clear the Grizzlies achieved their goals financially.
The next few months will tell if money trumped the product on the floor.