Should the Warriors Trade Klay Thompson?
Posted: Sun May 21, 2017 2:33 am
I know this is kind of a crazy idea, but I looked at the Warriors cap situation going forward and it isn't pretty.

(Text in blue is expected salary)
So assume Curry and Durant resign at their max, 35% of the cap each this off-season. Not even looking at bringing back Iguodala or any other key bench players, they'll already be $13.6 million over the cap for 2017-18.
In 2018-19, they'll have a team option on Kevon Looney for $2.2 million and a team option on Damian Jones for $1.5 million, so they'll either have be between $17.6 million and $21.3 million over the cap, depending on if they exercise the options for Looney and Jones.
In 2019-20, they'll have another team option on Damian Jones for $2.3 million. It's possible Klay Thompson makes an all-nba team in the next 2 season and is available for a DVE. Now each team can have a maximum of two players on a DVE, so they'll likely have to chose between Klay and Draymond for the 2nd spot (part of the reason I think they should trade Klay). My assumption is that Draymond is more likely to qualify and more deserving of the bigger contract and they'll give it to him. So I have Klay penciled in for a 30% max starting in 2019-20 at $32.1 million with max 8% raises. This is where the Luxury Tax starts coming in. I'd project it to be around $21.6 million bringing the total season cost to $164 million.
In 2020-21, Draymond will be up for a new contract and I'd assume he qualifies for a DVE by then. A 35% DVE would start at $39.3 million. Their luxury tax bill would be a massive $106.8 million with a $278.1 million total cost.
In 2021-22, their tax bill would jump again to $141.9 million with an insane $326.7 million total cost.
In 2022-23, KD and Curry would need to be resigned. If I'm understanding the CBA correctly, the maximum they can sign for is 35% of the max, which is currently estimated by RealGM to be $124 million. Those contracts would be starting at $43.4 million each. Their tax bill would actually decrease to "only" $123.4 million because KD and Curry would be getting paid less than the previous year. However, they'd become a tax repeater this season so they'd be taxed at a higher rate.
In 2023-24, they'd end up with a $163.9 million tax bill and an insane $360.4 million total cost thanks to an insane $196.5 million payroll.
Everything I'm trying to illustrate here is that financially have 4 max players on a team is really not a feasible situation if the team wants to have any other players on the roster outside of minimum guys. I didn't even account for the possibility of draft picks because they'd likely have to trade away their picks every season to make this work.
This is why I think they should trade Klay Thompson. Not because they want to or because it's a smart basketball decision, but because he is the most easily expendable of the core 4 and they'd like to be able to pay the other guys on the roster. Here's what their books would look like if I just removed Klay via Free agency in 2019-20:

(Text in blue is expected salary)
Now if they traded him even earlier, they would be able to at least get something back and be able to avoid massive tax bills, only paying $8.2 million in total tax in the next 7 years. I think Klay is by far the most replaceable guy out of the core 4 and almost all metrics rate him as the worst of the group. I don't think this is the best move for basketball reasons, but I think they're good enough to be able to absorb his loss and still be a historically elite team.
Really interested to hear other people's thoughts on this. I don't think it has really been talked about much and it could be a huge problem going forward for the Warriors.

(Text in blue is expected salary)
So assume Curry and Durant resign at their max, 35% of the cap each this off-season. Not even looking at bringing back Iguodala or any other key bench players, they'll already be $13.6 million over the cap for 2017-18.
In 2018-19, they'll have a team option on Kevon Looney for $2.2 million and a team option on Damian Jones for $1.5 million, so they'll either have be between $17.6 million and $21.3 million over the cap, depending on if they exercise the options for Looney and Jones.
In 2019-20, they'll have another team option on Damian Jones for $2.3 million. It's possible Klay Thompson makes an all-nba team in the next 2 season and is available for a DVE. Now each team can have a maximum of two players on a DVE, so they'll likely have to chose between Klay and Draymond for the 2nd spot (part of the reason I think they should trade Klay). My assumption is that Draymond is more likely to qualify and more deserving of the bigger contract and they'll give it to him. So I have Klay penciled in for a 30% max starting in 2019-20 at $32.1 million with max 8% raises. This is where the Luxury Tax starts coming in. I'd project it to be around $21.6 million bringing the total season cost to $164 million.
In 2020-21, Draymond will be up for a new contract and I'd assume he qualifies for a DVE by then. A 35% DVE would start at $39.3 million. Their luxury tax bill would be a massive $106.8 million with a $278.1 million total cost.
In 2021-22, their tax bill would jump again to $141.9 million with an insane $326.7 million total cost.
In 2022-23, KD and Curry would need to be resigned. If I'm understanding the CBA correctly, the maximum they can sign for is 35% of the max, which is currently estimated by RealGM to be $124 million. Those contracts would be starting at $43.4 million each. Their tax bill would actually decrease to "only" $123.4 million because KD and Curry would be getting paid less than the previous year. However, they'd become a tax repeater this season so they'd be taxed at a higher rate.
In 2023-24, they'd end up with a $163.9 million tax bill and an insane $360.4 million total cost thanks to an insane $196.5 million payroll.
Everything I'm trying to illustrate here is that financially have 4 max players on a team is really not a feasible situation if the team wants to have any other players on the roster outside of minimum guys. I didn't even account for the possibility of draft picks because they'd likely have to trade away their picks every season to make this work.
This is why I think they should trade Klay Thompson. Not because they want to or because it's a smart basketball decision, but because he is the most easily expendable of the core 4 and they'd like to be able to pay the other guys on the roster. Here's what their books would look like if I just removed Klay via Free agency in 2019-20:

(Text in blue is expected salary)
Now if they traded him even earlier, they would be able to at least get something back and be able to avoid massive tax bills, only paying $8.2 million in total tax in the next 7 years. I think Klay is by far the most replaceable guy out of the core 4 and almost all metrics rate him as the worst of the group. I don't think this is the best move for basketball reasons, but I think they're good enough to be able to absorb his loss and still be a historically elite team.
Really interested to hear other people's thoughts on this. I don't think it has really been talked about much and it could be a huge problem going forward for the Warriors.