Small Deal, Big Meaning: Breaking Down the Grizzlies' Cost-Cutting Trade


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While everyone has been waiting for a big move from the Grizzlies, involving Rudy Gay or, less likely, Zach Randolph (who was the subject of a specious trade rumor over the past weekend), the Grizzlies surprised the hoops world with a smaller deal on Tuesday morning. With the smoke still clearing, let's look at what happened and what it might mean:

Wayne Ellington has been erratic, but the Griz may miss what shooting hes provided.
  • Wayne Ellington has been erratic, but the Griz may miss what shooting he's provided.

The Particulars: The Grizzlies traded three reserve players — Marreese Speights, Wayne Ellington, and Josh Selby — along with a protected future first-round draft pick to the Cleveland Cavaliers for reserve forward Jon Leuer. The pick can't be exchanged until at least 2015. The complicated protections on the pick are such that it will go to Cleveland in 2015 or 2016 only if it falls between picks 6 and 14. It will be protected through picks 1-5 in 2017 and 2018, and unprotected in 2019 in the unlikely event it still hasn't been exchanged. The deal also generates a $6.4 million trade exception the Grizzlies will have access to for the next year.

The Ostensible Rationale: This was, first and foremost, a financial move. It brings the Grizzlies safely under the league's luxury tax threshold — a team source suggests the Grizzlies may have been closer to $6 million over the tax line rather than the widely reported $4 million due to potential contract incentives, if you're wondering about the inclusion of Ellington — without having to move any of the team's top seven players (assuming Darrell Arthur and Quincy Pondexter as the most valued reserves).

What's Going Out and What's Coming Back: I'm somewhat sanguine about the short-term roster changes this deal will entail. Marreese Speights is a useful player whose real value is somewhat less than his surface stats. A lot of people who follow the Grizzlies seem to be under the impression that Speights bloomed into something dramatically different than he had previously been after donning Beale Street Blue. But, really, Speights just got more playing time.

He's remained much the same player: A good-not-great scorer and rebounder who's dependent on an excellent mid-range jumper but who is also mistake-prone, a poor defender, and someone who's overall impact grades out fairly poorly based on on-court/off-court breakdowns. Speights' poor-man's-Z-Bo production was a big help for a desperate Grizzlies team last season, but as first Randolph and then Darrell Arthur got healthy and back into the rotation, Speights was starting to settle, naturally, into the fourth slot in the team's frontcourt rotation. This month, in games where Randolph, Gasol, and Arthur have all been active, Speights has been playing about 12 minutes a game. $4.2 million was a lot to pay a player in that role, especially for a team over the tax.

Ellington has had a couple of big games but is essentially a replacement-level player. He's been this his whole career, which is why I objected to the Grizzlies trading a quality rotation player on a good contract (Dante Cunningham) to obtain him. That said, especially with Pondexter still out, Ellington still plays a position and has a skill — three-point shooting — of great need.

Selby was a non-factor and has shown signs of being, in baseball terms, a AAAA player — great in the minors but not quite good enough for the majors. We'll see what he does with his new opportunity.

Obviously, not much is coming back; that wasn't really the goal. But I would caution onlookers against being too dismissive of Leuer, whose name got my antenna up when the deal was first reported.

New acquisition Jon Leuer isnt a recognizable name, but has a chance to help.
  • New acquisition Jon Leuer isn't a recognizable name, but has a chance to help.
Leuer could be — indeed, is hoped to be — something a bit more than a contract throw-in here. The 6'10”, second-year forward was lauded by then columnist John Hollinger as an underrated draft prospect two years ago and panned out as quality role player for the Milwaukee Bucks as a rookie last season. Signed by Cleveland after being moved to Houston as a trade throw-in and waived due to roster over-crowding, Leuer has spent most of his time so far this season with Cleveland's D League affiliate, the Canton Charge. For what it's worth, Leuer has been extremely productive there, averaging 20 points and 12 rebounds on 51% shooting for Canton. Leuer isn't likely to rebound as well as Speights in the big leagues, but has similar shooting skill and could well surprise.

For a little perspective, look at Leuer's rookie season compared to how Speights played in the season before he arrived in Memphis and into a larger role:

Jon Leuer, 2011-2012 (rookie season, age 22)
12 mpg
4.7 ppg
2.6 rpg
51% shooting
15.31 PER

Marreese Speights 2010-2011 (third season, age 23, last season before joining Grizzlies)
11.5 mpg
5.4 ppg
3.3 rpg
50% shooting
15.39 PER

Heading into this season, Leuer's top four comps, via Basketball Prospectus, were Brian Cook, Jordan Hill, Josh McRoberts, and the dearly departed Dante Cunningham. In other words, pretty much your definition of “viable fourth forward/center.”

As a rookie, Leuer shot 45% from 10-15 feet and 40% from 16-23 feet (per, very comparable to Speights at the same age. But after shooting 3-9 from three-point range in 42 NBA games last season, Leuer has shot 7-15 from three in only 8 D League games. Can he continue to stretch those long twos into threes? If so, it could substantially enhance his value.

Obviously, Leuer could easily not pan out at all. But there is also ample reason to believe he could emerge as a useful player.

Marreese Speights, on the move
Short-term Roster Issues: The trade brought the Grizzlies roster to 11 and left enough space under the tax line to make two minimum signings to get to the league-mandated 13 players. The Grizzlies made their first soon after the deal was completed in signing 6'6” swingman Chris Johnson, a 22-year-old spot-up shooter who's hit 41% (54-129) from three-point range for the D League's Rio Grande Valley Vipers. The Grizzlies will have a roughly two-week grace period to sign one more player to bring their roster to the minimum 13.

If the Grizzlies can get (Pondexter) and stay (Arthur) healthy, I think the short-term impact of this move is probably pretty minimal, regardless of what production Leuer, Johnson, or other new acquisitions provide. But the Grizzlies really need Pondexter back now and if it takes a couple of more weeks — or more? — for him to see the floor, that's going to be tricky.

It also presents an opportunity for talented rookie Tony Wroten Jr. to accelerate his development, which is something I've been hoping for. Wroten is going to be inconsistent and is going to make mistakes, but it's hard to imagine either of those things will be more pronounced than for Jerryd Bayless of late. My hope is Wroten will get a longish leash and enough positive reinforcement to balance out the usual Lionel Hollins tough love, because Wroten's playmaking ability is something this moribund offense could really use. A side benefit of more time for Wroten will mean playing Bayless off the ball more, which could help him get untracked as a scorer.

The risk — and it's a big one — is that the Grizzlies are now much less prepared to withstand injuries to their remaining rotation players, and sacrificing that insurance for tax savings is a tough pill to swallow in a season that's still — for the moment at least — on pace to be the franchise's best.

What the Pick Restrictions Say: The pick restrictions here are complicated, with both teams getting something they want — the Grizzlies trying to avoid giving up a high pick and the Cavs trying to avoid settling for a late one. As's Zach Lowe wrote today:

Memphis is betting on its ability to stay a playoff team over the next half-decade-plus. Cleveland is betting on Memphis falling into the lottery at some point in that span, and that’s not a terrible bet.

Lowe went over the pick issues so well, I'll just advise to you read his piece rather than wading into that thicket myself. But I do think what these pick restrictions seem to say about the organization's long-range assumptions is interesting.

The best-case scenario here is for the Grizzlies to hand the Cavs a late first-rounder following the 2016-2017 season. The current core — and this holds even if an expected Rudy Gay trade materializes before next season — is under contact together through the 2014-2015 season. If the organization is planning it out this far ahead — and you'd hope they are — then they seem to be factoring in a quick a reload rather than a full rebuild once Randolph's current contract expires in 2.5 seasons.

Does This Really Put Off the “Big Deal” Until the Summer?: The instant and understandable assumption by most today seemed to be that this deal takes Rudy Gay (and, because it feels like we always have to acknowledge the possible but unlikely, Zach Randolph) trades off the table until this summer. Some, most notably Lionel Hollins, suggested that the Speights/Ellington trade was a business decision done in order to keep the core intact for the rest of this season. And perhaps there have been some internal assurances in that regard. But that isn't my read.

There's a strong case to be made, rather, that Tuesday's trade instead makes a Rudy Gay deal before next month's trade deadline even more sensible. Certainly, the team's long-term payroll trajectory still necessitates a move before the end of next season, when elevated taxes come due. And there are reasons to believe that more and/or better trade partners may be available now than are will be available this summer. Certainly, this deal alleviates the pressure to make a Gay trade in the next few weeks, but here are three reasons it might still happen:

Better leverage: I'm still not quite sure I buy this, but there's some thought that reducing the financial imperative to deal will engender better offers, as other teams will know that the threshold of return for the Grizzlies to do a deal is now higher. It may be that the timing of this week's deal — which could have been done closer to the trade deadline — was done with this in mind, to allow a few weeks for this move to impact potential offers for Gay.

Better flexibility: Where an in-season Gay trade before Tuesday was likely to require less total salary — for this season — coming back, the Grizzlies are now freer to make an even-salary trade, especially if one of the contracts coming back is expiring. This could open up more deal possibilities and make it easier for the Grizzlies to seek out more immediate value in any Gay deal.

Greater need: The Grizzlies were already starved for outside shooting before dealing Ellington, and unless they strike gold in the minimum-salary free-agent market, that need is even greater now. The depth issues created by this trade could now be addressed by what would likely be a Gay trade bringing back multiple assets. Trading Rudy Gay for two or three rotation-quality players, two or three of whom are good three-point shooters, makes even more sense now than it did before.

The Verdict: I hate the idea of giving up a future first-round pick to save luxury tax. Hate it. It's also disappointing to see that getting under the luxury tax for this season was apparently a more driving concern than team decision makers were suggesting, both privately and publicly. It was clearly desired, and I think there's a very good chance that Michael Heisley, as he had suggested, would have made a similar deal for similar reasons. But I've always contended that this was the one, perhaps final, season for this franchise to be willing to be a taxpayer, and they clearly weren't willing to do that.

Beyond that, the jury has to be out to a degree. Will the bigger deal follow, adding shooting and depth that the salary-and-roster-spot clearing set-up made partially possible? I hope so. If not, then the short-term risk of hurting a contending team's depth backed with the long-term hit of giving up a pick makes this deal a bitter pill.

But, looking past those considerations, I'm struck by what this deal may portend for the general future of franchise operation — as hopefully the last gasp of something old, as the start of something new, and as the harbinger of what could now be an ever-present concern. Let us count the ways:

Something Old: You can't fault the new regime for inheriting a roster that couldn't be kept together. But hopefully this is the last time the Grizzlies have to spend a first-round pick to buy themselves out of a mistake. (Witness the Hasheem Thabeet-Shane Battier deal.)

Something New: Instead, hopefully this deal begins an era of maximizing assets and fully understanding that, in most cases, a player's contract is a part of his value. While I hate moving the pick and don't like the concern about this season's luxury tax and worry — to the extent I worry about such things — about the depth issues the trade creates, the Marreese Speights-for-Jon Leuer component of this trade is a hint at the kind of thinking that could, and should, become more prevalent for the Grizzlies.

A key for any organization in a small market is going to be its ability to find and develop cost-effective contributors to surround what will almost always ultimately be a well-compensated core, and this deal marks the first — but far from last — proving ground for the new front office. Speights was making $4.2 million this season with a player option for $4.5 million next season. That's just too much to pay for a #4 big when you want to stay under the luxury tax. (And removing that player option from the team's books for next season is something this trade accomplishes.) Leuer is on the books this season for $760K, with a qualifying offer next season for just over $1 million. Can Leuer provide 80 percent of Speights' value at 20 percent of the cost? Ellington was a replacement-level player making twice replacement-level pay. Can the Grizzlies find a free-agent shooter that can equal or better his erratic contribution at less than half the cost? If the Grizzlies can embark on an era of shrewder contracts and better bargain-hunting, that will make for a healthier franchise going forward despite a potentially bumpy transition.

Something Concerning: This franchise was heading toward an eventual break-up of the still-standing core and a tumble back below the luxury tax line regardless of ownership, but there's no doubt that Michael Heisley had both deeper pockets and a firmer grip on the franchise than new controlling owner Robert Pera. Whether the new regime has cash-flow issues that impact basketball decisions in a more direct way than in the past is something to keep an eye on.

A shorter version of this column appears in the January 24th issue of the Memphis Flyer.

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