Sixers post-trade deadline salary cap analysis: where do the 76ers stand now?

The 76ers made some serious noise before the NBA trade deadline, and their new group is now 1-0 after a big win against the Western Conference’s second best team, the Denver Nuggets.

Out goes Markelle Fultz, Landry Shamet, Wilson Chandler, Mike Muscala, and multiple draft assets. In comes Tobias Harris, Mike Scott, Boban Marjanović, Jonathon Simmons, James Ennis, and a couple draft assets. Whew. Lots of surprises.

Based on the moves the team made, it seems possible that the Sixers felt more desperate than many realized. As maybe they should have. Not because they necessarily needed to win right away. Their stars Joel Embiid and Ben Simmons are young, 24 and 22 years old, respectively. But because of the uncertainty surrounding Jimmy Butler’s future and this being perhaps the last summer Philadelphia figures to be major players in free agency with Ben Simmons soon eligible for extension.

With the looming threat of an existing super team in Golden State, or new ones being formed in Boston, New York, or Los Angeles, they needed to be bold because they risked limiting their upside for perhaps many years to come had they stood pat.

With their deadline moves, the Sixers essentially placed premium value on bird rights so that they could re-up both Harris and Jimmy Butler, per Ben Detrick on his The Ringer NBA Show appearance. They made a difficult decision to move on from Markelle Fultz and the money ($9.7m) they would have had to pay him next season.

They prioritized increasing their title odds in the short term. They made a semi-hedge play, bringing in a non-superstar like Harris. They now have the chance to earn his favor by demonstrating a winning culture and will be able to offer him more financial security than rivals. If he goes for it, and if for any reason Butler does not, they won’t be left totally barren of support for Embiid and Simmons. This gives them some “insurance.” They now won’t feel the need to overwhelm Butler with money if they don’t feel he is an ideal fit for their system and culture after a playoff run; they could instead distribute some of the $30+ million he’d command across a few complimentary pieces. If he does fit, they’ll do all they can to keep him. There will be some time after the season to figure that out.

What’s next?

Liberty Ballers reached out to Jeff Siegel, Founder of EarlyBirdRights.com (an invaluable resource with some really awesome articles like this one about the Harris trade by Siegel himself) for a quick run-through of some possibilities for this summer. Here’s what we learned:

If Butler and Harris stay

There has been no shortage of experts noting how pricey a “big four” on max level contracts (Embiid, Simmons, Butler, and Harris) would be in terms of roster and cap flexibility as well as luxury tax implications for ownership. But it sounds like the team still has that goal in mind for this core:

How would it look?

We can begin by slotting Butler and Harris both for the max, even though Zach Lowe of ESPN doesn’t think Butler will receive the total amount for which he’ll be eligible.

With Butler and Harris’ cap holds on the books, if they were to cut Jonathon Simmons, and let’s say James Ennis opts in ($1.8 million), this now leaves them as an over-the-cap team with the ability to re-sign Butler, Harris, Redick,[1] and use a mid-level exception as well. It sounds like this is a scenario that could be in the cards. But it’s still not a given.

The players hold the cards and will probably make their decisions based on how the playoffs shake out and what other teams’ sales pitches sound like as we near July.

It has been noted by some experts like Zach Lowe that the Sixers may be able to retain Butler and Harris for somewhat less than the full max available to each player.

For example, the Sixers could offer 5 years and $175 million to each player, which is an extra year’s salary at ~$35m more than another team could offer, but still almost $14m shy of a full max. Would Butler (29), or Harris (26), find the additional year of security worthwhile? If so that could save the team almost $30m over the course of each contract.

Here is what the Athletic’s Danny Leroux wrote on this same point:

“There may be a middle ground between a full five-year, $189.7 million max deal and the four-year, $140.6 million another team can offer, as was the case when the Raptors re-signed DeMar DeRozan in 2016.”

The team may not have a ton of leverage since they will need to keep at least one of these guys, but having both could very well put the team over the top for a championship over the coming years.

Fans who were ambivalent on a Butler-Embiid-Simmons trio long-term should want Butler to stay more so now than before the trade; there’s simply more upside unless the front office can identify some free agents to replace either Harris or Butler with who will obliterate their market rate, a task that has proven quite challenging for many of the very best teams.

Sixers fans should be hoping for a big four and for ownership to pay for it in order to compete with the best of the best. It sounds like that’s very possible. Not all fan bases have this luxury.

This trade gives ownership the type of leverage during future negotiations where they can come to the table with an attitude of “we need Butler less now but we want him more, let’s make a deal where we all win.”

Butler Leaves, Harris Stays

If Butler leaves, with Harris’ cap hold on the books, the Sixers could cut J. Simmons, and let’s say Ennis opts in again. This leaves Philadelphia with $37.1 million in space. That amount is not quite enough for a 35% max level superstar like Kevin Durant, but they could always trade Ennis or do something else to get that last bit of space. The next group of younger stars (like Kyrie Irving, Klay Thompson, and Kawhi Leonard) can command $32.7 million, so one of them would be affordable should Butler walk.

These scenarios where they’d be pursuing Durant or Klay Thompson would include losing Redick, unless he’d be willing to come back for the Room Exception (~$5M). Striking out on those names leaves them with the ability to identify specific needs and focus on depth with plenty of cash.

Harris leaves, Butler stays

This scenario feels unlikely. One would think the team received some assurance from Harris (now a journeyman for a 26-year-old, as good as he is) that the New York native might be open to finally planting his flag in one city long-term. He’s a bit younger and in a few ways a better long-term fit than Butler, if they had to pick just one.

After being traded so many times, to now being truly valued by a contender whose arena happens to be pretty close to where he grew up facing a potential 5 year near-max deal may be why Harris posted this:

That being said, if Harris were to leave and Butler were to stay for a max-level salary, and they cut J. Simmons, with Ennis opting in the team would be looking at about $28.6 million in room. [2]

They’d have to get creative to free up enough space to sign a max-level star like Irving or Thompson, and again, they’d only be able to retain Redick if he were willing to play for the Room Exception.

What if Butler and Harris both leave?

In the stock market or sports gambling, a hedge is essentially when you limit risk while limiting some upside, ideally by locking in a profit. The Sixers have not technically done that, which is why I called it a semi-hedge earlier.

Their floor and ceiling outcomes are still quite extreme.

At the tail-end of their range of outcomes now, they could technically renounce the cap holds of players like Butler and Harris and target Kyrie Irving and Klay Thompson instead, bolstering their core with stars at positions of need while taking the legs out from top rivals.

They could even target Kevin Durant and still have substantial money left over for some key role players.

For example, if they both left, the team could cut J. Simmons, and if Ennis opted in, they’d be looking at $58.4 million in space. It’s not quite enough for two stars who make 30% of the cap (e.g. Irving, Leonard, Thompson), but it’s close. They could move Zhaire Smith and their 2019 first round pick to make that work.

On the other end of the spectrum, they could lose both Harris and Butler and be forced to turn to much lesser free agent talent to round out the rest of the roster, having lost all of the assets it took to acquire them.

The “floor” here is now much more grim than it was when losing Butler alone was a “worst-case scenario” and they still had some juicy assets and young players like Landry Shamet.

Swing big while reducing your chances of a strikeout

The benefits of this trade deadline are that they improved their realistic projections and improved cap flexibility and star power. If we used a monte carlo simulation for the rest of the season, the NBA draft, and free agency one million times with all of the myriad possibilities, the Sixers will now have significantly more outcomes fans can be happy about than before the deal. That’s great.

Plenty of smart people are calling the Harris deal an “overpay” by the Sixers and giving the better marks to the Clippers:

Both are assessments I think are fair. It remains to be seen if they have addressed their achilles heel, perimeter defense.

But a bit of context is important to keep in mind. For Philadelphia, it’s a relatively new place they’re in. For many years, they were the team who deserved the better marks when selling talent for assets. Now they’re the team looking to put the final building blocks in place for a multi-year championship run.

Daryl Morey the GM of Houston was certainly willing to “overpay” for Jimmy Butler, knowing the final championship piece is by far the hardest one to obtain. And his overpay was still insufficient based on Minnesota’s actions when they opted instead to send Butler to Philadelphia. The Sixers will now have to maintain a big four and then Elton Brand will rely on his player personnel staff and analytics department to help him fill out the rest of the roster. That is where folks like Marc Eversley, Alex Rucker, Ned Cohen, or newly hired Annelie Schmittel may be leaned on to play and win along the margins with now fewer resources.

In Philly, you have to play the margins a little more deftly than you do in New York or Los Angeles. The Sixers have to significantly outmaneuver teams whose cities are simply bigger free agent draws.

Excitingly, there now exists a few scenarios where the Sixers could be the odds-on favorites to win the NBA Finals heading into next season. Of course, they’ll need a strong buyout market, playoff push, and then hope to retain a big four (even if it’s not this precise unit).

Then they’ll have to hope the rest of the league’s superstars wind up on different teams so there is more parity and no singular super team.

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[1] Redick is not affected by how much Butler/Harris get paid, if they both choose to stay, unless Philadelphia doesn’t want to pay the tax next year. In that scenario, you have Embiid, Butler (max), Harris (max), B. Simmons. J. Simmons (waived), Smith, Bolden, Ennis, and their first-round pick, which leaves $21.1M below the tax for Redick + filling out the rest of their roster. Even if Redick gets a raise, there’s plenty of room under the tax for him, per EarlyBirdRights.com.

[2] All these figures include an estimated cap hold for their first-round pick at $2.0 million.