How valuable are the Raptors’ trade assets?

All-Star Weekend takes place in Toronto this weekend, and while that`s going to deservedly draw all of the attention, it also highlights another important part of the NBA schedule: The impending trade deadline. All-Star Weekend usually comes with an unwritten embargo on rumors and reports, but the Monday that follows is generally one of the most speculation-heavy days on the calendar, with general managers coming off of a weekend with plenty of time to talk shop.

Don’t expect much in the way of Toronto Raptors rumors, given how tight a ship Masai Ujiri runs. If the Raptors are being floated, it’s probably coming from the other teams (or agents) involved, though obviously, speculate away, because that’s the fun of this time of year. If the Raptors do make a deal, there’s a good chance it won’t be one people see coming.

The Raptors are in a tough position to trade despite some attractive assets. That doesn’t mean a deal is impossible or even unlikely. Because again, the Raptors have some attractive assets. Here are those assets, grouped into tiers based on their utility for facilitating a trade (not their value to the Raptors or as players overall).

Tier One – Forget It

Kyle Lowry – $12M salary, $12M salary for 2016-17, $12M player option for 2017-18 likely to be declined
DeMar DeRozan – $10.1M salary, $10.1M player option for 2016-17 likely to be declined

They’re both All-Stars on below-market deals. It’s almost impossible to envision a scenario in which one of them gets sent out given that the Raptors are firmly in win-now mode, even if DeRozan can hit the market this summer.

Tier Two – The Knicks’ pick

The Raptors own the New York Knicks’ first-round draft pick from the Andrea Bargnani trade. The Denver Nuggets, however, have first dibs on the pick after the lottery, so the Raptors are set to receive the less valuable pick between New York and Denver.

This is the Raptors’ best trade chip. If the season ended today, the Nuggets would be penciled in for the No. 8 pick, the Knicks the No. 10, before the lottery. The odds of the pick that conveys to the Raptors landing in the top five would be quite slim in this case, but a top-10 pick still has a ton of value, and the odds of it falling lower are likewise slim. What’s more, the Knicks have begun to play much worse of late, Carmelo Anthony is dealing with knee soreness again, and Derek Fisher just got fired. The Nuggets have been looking up but remain little threat to make the playoffs, and it’s conceivable they make a deal that worsens the roster for the remainder of 2015-16.

I could find the percentage chance of landing each pick with different Knicks-Nuggets outcomes, but it would require a ridiculous conditional probability matrix that I don’t have the patience to work up right now. What you need to know is that the chances of this pick being in the top five will be pretty slim unless both teams collapse but there’s a good shot it’s in the top 10 and a near certainty its in the lottery. That’s a huge asset ahead of the deadline, even with so few teams firmly in the “sellers” camp.

The issue here is that draft picks don’t count as any outgoing salary, so the Raptors still have to send out players to match salaries in a deal. As we’ve seen in coming up with hypotheticals, that can make it difficult to find a deal for a bigger name piece that the pick might warrant.

Tier Three – Other 1st-round picks in 2016-2017

Raptors’ 2016 1st-round pick
Raptors’ 2017 1st-round pick
Clippers’ 2017 1st-round pick, lottery protected

The Raptors own three other picks in the next two drafts, and while none of them are likely to land in the lottery, they’re still big trade assets. An acquiring team not only gets a shot at a rookie or draft-and-stash option but, should they hit on the pick, they stand to get a great deal of surplus value in a rising cap environment with fixed rookie contracts.

The Knicks’ pick is the primary weapon the Raptors have, but these picks would all hold major value, too. They also happen to hold more value to another team than to the Raptors, who are in win-now mode and already have several young players developing on the roster. It’s unlikely the Raptors use more than two of these picks, and if they do, there’s a high likelihood of a draft-and-stash scenario. There simply isn’t room for more youngsters.

As a reminder, “teams can’t trade first-round picks in consecutive years” is a bit of a misnomer – teams simply have to own a first-rounder once every two years, so the Raptors could deal the Knicks pick, and their own 2016, and one of the 2017 first-round picks and still be in compliance (or both of their 2017s and one of the 2016s).

Tier Four – Useful player, useful salary

Cory Joseph – $7M salary, three years and $22.9M after
Patrick Patterson – $6.3M salary, $6.1M salary for 2016-17

I’m skeptical Joseph would get dealt, but given how few salary-matching options the Raptors have, he’d likely figure in if the Raptors were to get in the mix to add a third star.

In the case of Patterson, he’s at the same time played well enough to increase his value and decrease the team’s perceived need for a power forward upgrade. It’s still the team’s clearest area for improvement, but Patterson’s turned in the best defensive season of his career and has nudged his 3-point percentage back up to 33.9 percent. He’s the Raptors’ highest salaried player that is both likely available and attractive to another team. His contract for next year will be below-market once the offseason is complete, he’s a high-character guy that should fit in any locker room, and he’s enough of a two-way piece and floor-spacer to fit in just about any scheme. He’s not a star, or anything, but a season-and-a-half of Patterson isn’t a bad conduit to receive a pick.

Tier Five – Other draft picks

Raptors’ 2017 2nd-round pick
All Raptors’ first- and second-round picks from 2018 to 2022

I’m considering the future first-round picks here as worth less than the near-term ones for two reasons.

For one, the further in advance the asset is conveyed, the less present-day value it has. That’s not necessarily true by expected value, particularly if draft classes wind up stronger in future years, but most teams and executives operate with a more near-term approach (especially with job security concerns), such that there’s a sort of “time value of assets” element at play. There’s also an additional uncertainty of the acquiring team having far less an idea where that pick may fall, unable to project the Raptors that far into the future.

The second is a far bigger consideration. The NBA and NBPA can opt out of the current CBA for the summer of 2017, and rookie scale contracts are likely to be a major talking point. Look at the table above again and the significant discount scaled contracts provide as the salary cap rises. That’s something the league will likely want to balance out some, perhaps tying the rookie scale to a percentage of the salary cap rather than to a fixed number. That makes it difficult to project just how big a value rookie contracts will be and how much surplus hitting on low-end picks might provide.

I’ve included the team’s 2017 second-rounder here, too – they already owe their 2016 second-round pick – because even with the salary discount, this figures to be a pick outside of the top 45.

Tier Six – Useful veterans

Luis Scola – $2.9M salary, expiring
Bismack Biyombo – $2.8M salary, $2.9M player option he’ll almost surely decline
James Johnson – $2.5M salary, expiring

None of these three players are going to move the needle much for an acquiring team in sell mode. Biyombo is young enough that his Early Bird rights and a few weeks to look at him closely may mean something, but in the case of Scola and Johnson, they’d be likely to either play out the season and leave or get bought out to save a few dollars. In a win-win deal or multi-team trade where several teams are looking to improve, all three could potentiality factor in to the 10-man rotations of other teams, though none are likely to represent a major upgrade.

All three have small salaries, which makes flipping them difficult. Individually, they could be attached with a pick for a smaller upgrade, but you can’t bring much salary back. The more likely case is that Scola and Johnson could be paired to avoid sending out Patterson or paired with him to bring back an even larger salary. Valuable though they may be to the Raptors, they have far more on-court value than on-market value.

Tier Seven – Prospects

Lucas Nogueira – $1.8M salary, $1.9M salary for 2016-17, $2.9M team option for 2017-18
Norman Powell – $0.7M salary, $0.9M salary for 2016-17, $1M non-guaranteed salary for 2017-18
Delon Wright – $1.5M salary, $1.6M salary for 2016-17, $1.6M team option for 2017-18, $2.5M team option for 2018-19

The likelihood of these prospects going out is hampered by two factors: Their low salaries, which makes it difficult to net a return beyond a larger multi-player deal, and the Endowment Effect. Part of the issue with including so many prospects on the 15-man roster is that those players don’t have a great deal of value – like used cars, draft picks lose a ton of value once they’re “off the lot.” Most teams tend to value their own assets more than other teams would, a (fairly reasonable) bias. The Raptors have more information about their prospects, a better idea of where they are on the development curve, and perhaps a subconscious pull to see them through, lest they trade away an asset that ends up flourishing elsewhere. They’ve also invested more in them, and since none have been able to show much at the NBA level, there’s likely to be a wide gap in how two sides value them.

Nogueira probably retains prospect value and has a useful enough salary for matching, plus no path to playing time in Toronto. Powell has a short-term role right now and has shown some encouraging signs, but his salary is so low it doesn’t do much even as a throw-in in a deal. Wright falls somewhere in between.

Tier Eight – Poison Pill Provisions

Terrence Ross – 3-year, $31M extension kicks in this summer
Jonas Valanciunas – 4-year, $64M extension kicks in this summer

Ross and Valanciunas are young players signed to reasonable extensions who have both shown strides in their fourth seasons. In the case of Ross, he’s turned what looked like a misstep of a contract into an understandable bet on the player and against the market. Valanciunas has gotten a little better as a passer and pick-and-roll defender, and while he’s not the most malleable two-way building block, he’s still a productive big man safely on the good side of the aging curve.

In the offseason, both of these players should stand as useful trade chips. For now, though, each is difficult to trade because of what’s known as the Poison Pill Provision, something that makes it tough for teams to extend rookie scale contracts and then turn around and deal those players. What this does for the Raptors is change the accounting math around Ross and Valanciunas in a deal. For the purposes of matching salary in a trade, the Raptors would be “sending out” their actual 2015-16 salaries while the receiving team would have incoming salary of the average of the total years the player is under contract. Hopefully numbersmake that more clear:

To effectively move one or both of those two, you’re looking at a complicated framework or multi-team deal. There are possibilities, they just seem more likely to head out in the summer, if they’re going.

Tier Nine – Not going anywhere

DeMarre Carroll – $13.6M salary, three years and $44.4 after
Bruno Caboclo – $1.5M salary, $1.6M salary for 2016-17, $2.5M team option for 2017-18

This isn’t meant to be a shot at Carroll. He’s in the first year of a four-year, $58-million contract, and his trade value would be at an absolute nadir given how little he’s been able to contribute to date. This isn’t by any means calling the deal a bust, but an acceptance of the reality that the Raptors aren’t going to be able – and probably don’t want – to deal an injured player in the first year of a multi-year pact.

I include Caboclo down here because of the Endowment Effect. The Raptors reached on him, have paid him for two years, and installed a D-League team in large part for him. He’s shown zero at the NBA level, so given the investment the Raptors have put forth and how big a reach it was initially, there’s no way his value to another team is anywhere near how high the Raptors value him. He’s not untouchable, there would just be such a vast divide between how two sides value him for that a deal would never get done.