Why the Thunder traded James Harden

Last week in my NBA Preview I ranked the Oklahoma City Thunder as the top team in the West.  Looks like I posted that article a bit too early.  In the wake of the surprising deal that shipped James Harden to Houston, the Western Conference is now much more wide open.

Why did the Thunder seemingly take a step back when they were on the brink of winning a title?  Money.  That's the simplest explanation, so we'll start with that.  The Thunder had until midnight on Halloween to lock up Harden with an extension or he would be eligible for restricted free agency after this season.  After Harden turned down their offer of $55.5 million over 4 years - $4.5 million short of the max they are allowed - the Thunder looked for alternatives.  While that extra million or so per season doesn't seem like much in the grand scheme of things, the restrictions in the new CBA agreement make it a much more difficult pill to swallow.  Keeping Harden would have pushed the payroll over $100 million when factoring in luxury tax fees.  That's fine if you're a team like the Lakers that make more than that annually before ever selling a ticket thanks to their new TV deal, but a small market team like OKC, which makes only about $15 million a year off it's local TV contract, can't afford that kind of luxury.  Few teams can.  Outside of New York, LA and Miami, you don't see too many teams with three max contract players, let alone four.

The Thunder already locked up Kevin Durant, Russell Westbrook and Serge Ibaka to long term deals, with the latter two sacrificing for the team by accepting less than the max.  They expected Harden's desire to stay with the team to lead him to do the same, but they were wrong.  Not that you can blame Harden for wanting to maximize his worth.  Knowing other teams are willing to give him a max contract, you can't fault him too much for turning down anything less.  It just means that instead of staying together with a core of young stars that will perennially contend for a title, he'll be shipped to a team that will struggle to even make the playoffs.  But at least he got paid, so umm... there's that.

There's no way the Thunder can immediately replace a player of Harden's caliber, but they did manage to receive a pretty impressive haul.  In exchange for Harden and a few spare cap filling pieces, the Thunder received Kevin Martin, Jeremy Lamb and three draft picks.  That's at least as impressive as what the Magic got for Dwight Howard and given Eric Gordon's ongoing knee issues, it may end up being better than what the Hornets got for Chris Paul.

Martin will fill much of the void left by Harden's departure as a scorer off the bench.  He's not the playmaker Harden is, but he can shoot (38% for his career on 3's) and get to the line.  In fact, he's only two years removed from a season where he remarkably led the league in both 3 pointers made and free throws made.  He can't do everything Harden did for them, but he can provide plenty of scoring off the bench and with the return of a healthy Eric Maynor, the Thunder have a capable ball handler to run that unit.  Martin may be one of the worst wing defenders in the league, but it's not as if Harden were ever to be confused with a defensive stopper either.

Lamb has the potential to become a very useful role player for this team and in the long run may even be a better fit than Harden in some regards.  He's a good shooter in his own right and should develop into a better defender as well.  He's long and athletic enough to disrupt passing lanes and he's extremely active with a good basketball IQ.  If you combined the skills of Martin and Lamb together you'd come pretty close to replacing what they are losing from Harden, but in this case they get Lamb on a cheap rookie contract and Martin on an expiring deal.

The draft picks come with a lot of value as well.  None of them originally come from Houston, as they are all picks the Rockets acquired while stockpiling assets to prepare to make a big splash like this one. One of the picks, which comes from Toronto (top 3 protected), could land them a difference maker in an upcoming draft.  The other first rounder came from Dallas and is top 20 protected, which means it could be a while before they see that pick, but eventually it could land them a solid role player.  The second rounder comes from Charlotte, which might as well make it another late first round pick.  These picks are valuable because even if they don't result in a star they at least offer the chance to draft cheap role players, which isn't easy to do when your team is already loaded with stars that max out your cap space and you're always picking near the end of the first round.  They could even become valuable trade chips for another deal down the line.

As talented as Harden is, he was never going to be able to fully flourish in OKC.  His skills are almost redundant to what Kevin Durant and Russell Westbrook already give them, which is part of why Harden came off the bench despite being their third best player.  All three are prolific scorers, but none of them provide much in terms of perimeter defense.  Sacrificing an All-Star worthy talent allows them to construct a deeper roster with players that fit better around their main stars.

The new rules of the CBA make it much more difficult to fill out a roster when you're already over the luxury tax, and not just for financial reasons.  Teams over the tax line are prevented from using their full mid-level exception and from making sign-and-trade deals.  That would limit them to filling out their roster with mostly rookies and veterans willing to sign for the minimum.  Giving Harden a max deal would have put them well over the tax line.  While cutting Kendrick Perkins with the amnesty clause would have saved them a bundle in tax payments, it wouldn't get them far enough under the tax line to make significant additions to the roster.  After this deal their payroll is now around a manageable $65 million in each of the next two seasons, which is enough under the tax line to allow them to add more players above the minimum.

In order to surpass the Heat and stay ahead of the new look Lakers, the Thunder decided they still needed to get better.  Losing Harden weakens them in the short term and opens the window for a team like the Spurs or Lakers to move past them in a loaded Western Conference, but in the long run it allows the Thunder the flexibility to improve their roster.

The Thunder had other options.  They could have held on to Harden to take one last run at a title with the same core that made it to the Finals last year.  Then they'd have the choice of either matching the max offers other teams would throw at the restricted free agent and biting the bullet of the financial consequences for the benefit of remaining a title contender, or sign-and-trade him next off-season for a package comparable to what they just got.  Instead they decided to pull the plug now.  It may cost them a chance to get back to the Finals, which is tough to sell to their supportive fan base, but that's often the price of being a small market team.  The franchise wasn't willing to sacrifice making a profit over the next few seasons for the chance to win a title.  That's just business.