Kevin Durant faces the Thunder on Thursday, 121 days after he left them. Yet looking back, a span of 480 days more than two years earlier could have prevented this scene entirely.
Durant leaving the Thunder for the Warriors led to much analysis of what went wrong in Oklahoma City and whether changing certain moments could have prevented the superstar’s departure. The trade of James Harden is often the main point in that type of analysis. The what if that imagines Harden, Durant and Russell Westbrook being kept together certainly is tempting.
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However, a deeper dive shows that trade was the product a broader mistake. Two dates separated by 480 days — Oct. 28, 2012, and Feb. 20, 2014 — and the time between them showcase the biggest error made by Thunder management that ultimately led to Durant’s decision. The starting point is the trade of Harden. The important details are the other options available.
In fall 2012, Harden still had one more year on his bargain-basement rookie-scale contract. Whoever held his rights could either agree to an extension with him that year, which would kick in for the 2013-14 season, or wait until the following summer and use match rights, a pattern that has become more popular in the last two offseasons for even maximum-caliber players.
Either way, the new contract would not officially count toward a team’s books and luxury tax payment until the last day of the regular season of the year that the contract took effect. In this case, that meant Harden would stay off a team’s tax bill until the final day of the 2014 season. That structure allows teams to start the season over the luxury tax line or under the salary floor, as long as they shift things by year’s end. These are normal practices. In 2013, the season when Harden was traded, the Warriors and Grizzlies both made deals at the trade deadline to duck the tax.
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Those facts mean the Thunder had almost 16 months between when they moved Harden and the earliest possible moment they would lock in paying the luxury tax even once.
As it turned out, the NBA’s financial landscape changed dramatically over those 16 months.
A year before the trade, the players’ share of basketball-related income dropped from 57 percent to 51 percent after the 2011 lockout and new collective bargaining agreement. That affected Harden’s maximum salary and how much money would be in the system. Additionally, the NFL secured a 63 percent increase on their new network television deal in December 2011 two months after getting a 73 percent jump from ESPN.
In those 16 months, the average team valuation jumped 30 percent, the president of ESPN said the NBA was a “critical product” for the network and the Kings sold for a then-record $534 million, an 18.6 percent increase on the prior record Warriors sale three years earlier despite being in a small market. Additionally, the league increased its cap estimate for 2014-15 twice during the prior season, from the original $62.5 million that July to $62.9 before the trade deadline to $63.2 in April.
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In February 2014, the Thunder and every other team possessed more than enough information to see where the league was headed financially.
While the league’s gigantic national TV contract was not announced until October 2014, the expectation was that the national television contract would double its per-year amount from about $930 million under the prior deal. It ended up almost tripling to a whopping $2.6 billion per season, but even doubling would have meant a massive uptick in the salary cap and luxury tax.
All of this is to say that by the latest that the Thunder could have traded Harden without financial hardship, they would have known about the expanding finances of the league combined with the still-limited contracts of that time. They even could have signed Harden for his maximum without any real fear of long-term implications. With a little maneuvering, they also could have kept Serge Ibaka, the player whose commitment often is used as an explanation for why the Thunder could not afford to keep Harden, without facing down the NBA’s dreaded “repeater tax” for high-spending franchises.
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On top of all that, the Thunder had another option on the table the entire time. The 2011 CBA included an amnesty provision, which allowed franchises to wipe a player’s salary off their books for both cap and tax purposes. Oklahoma City had center Kendrick Perkins making $8.5 million the year Harden’s extension would have kicked in. Using the amnesty on Perkins would have washed away all but $5 million of Harden’s increased price tag that season. Perkins had passed his peak even by 2012 — his final season with even a double-digit Player Efficiency Rating was 2009-10 for Boston.
Oklahoma City never used the amnesty provision.
Still, that is only a mitigation that should not even have been necessary. While having 16 months to evaluate where the league was headed held great value, it also would have given the Thunder another chance to compete for a championship with that same group and evaluate Harden’s long-term fit. He was 23 years old, coming off a Sixth Man of the Year season and likely ready to step into a starting role. Harden averaged 25.9 points and 5.8 assists a game in his first season for the Rockets. He probably would not have done that next to Durant and Westbrook, but it is hard to imagine him hurting his value if a trade still was necessary.
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The downgrade from Harden to Kevin Martin for one season hurt the Thunder on the court and off it. The Thunder substantially weakened their chances to win a championship and develop more revenue and deeper fan loyalty, the kinds of big-picture financial incentives that warrant the extra spending many of the best teams in the NBA choose to pay. Consider how much the Cavaliers have paid out to keep their current lineup together because they understand the value of championships.
Martin left after one season with the Thunder. Jeremy Lamb, also a piece of the trade, did not end up contributing much in Oklahoma City. One of the first-round picks sent to the Thunder did become center Steven Adams, now an essential part of their rebuilt core. Harden, meanwhile, became the MVP runner-up in 2014-15 and has led the NBA in points for consecutive seasons.
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However, the focus on the return of the trade ignores the bigger-picture issue. The Thunder made the decision to trade Harden 16 months earlier than they had to. That fear of future luxury tax payments without firm knowledge of the league’s future finances is the kind of mistake every team should learn from in the future.
Durant may have left the Thunder either way. The Warriors may have emerged as the Western Conference’s power either way. However, the sting of trading Harden is a part of the sting of losing Durant, and vice versa. The Thunder gave up on a potential dynasty. In the process, they lost two MVP candidates in four years.