The Art of Expiring Contracts

Kyle Tooley

On December 9th, 2011 Tayshaun Prince was rewarded with a contract extension from the Detroit Pistons worth $28 million over four years. And at the time, the contract made total sense: Prince was averaging 12 points per game over 33 minutes while grabbing 5 rebounds and dishing out 3 assists per game.  All the while, he was making a name for himself as one of the most efficient defensive players in the game.  He was an intricate piece on the team that brought the city of Detroit their first world championship in almost 15 years, and he was rewarded as such.  Fast-forward to the current 2014-15 season, and that contract makes little to no sense.  With age, Prince became a much less efficient player; averaging career lows in almost every statistic.  However, due to the 2011 extension, he is still making seven million a year.  Believe it or not, this is when Prince became the most valuable.  This is what we call the art of the expiring contract, and it’s a doozy.  The trade process is such a flawed one in the NBA that the mere fact that Prince’s contract is almost up makes him such a coveted player.  This is why he was traded twice in one season and three times in two years.  Everybody wants him because he’s almost gone.

Trading works in the NBA as follows: since there is a hard cap, trades must essentially equal out dollar values.  So, if the Raptors wants to trade a player to the Rockets, the player they receive in the deal must be making the same dollar amount as the player they gave up.  Either that or the players must fit in the team’s available cap space.  However, since most NBA teams have such limited cap room, there is a small likelihood that a team will receive much larger contracts than they send away.  The most recent example of this is when the Kings decided to take on Rudy Gay’s $19 million contract while giving away much less.  They had the cap space to make such a trade.

Tayshaun Prince has moved around a lot lately as his contract is set to expire
Tayshaun Prince has moved around a lot lately as his contract is set to expire

Though let’s take this back to Tayshaun Prince and his expiring contract.  He became a valuable trade piece because during the season, the only cap space and dollar amounts teams are concerned with are for the next season.  Prince may have been playing below his normal numbers and skill level, but the fact that he would not be on the books for the following season makes him an asset.  He’s someone that they won’t have to worry about next season, and therefore they don’t have to pay him.  The team that has Prince when the contract is up will clear up $7 million in cap space for the following season.  And that amount of money can be used to sign a good player.  A very good player.  Teams looking to rebuild will try to acquire as many expiring contracts as they can, and with that usually comes draft picks, and they can completely start over next season.  So, the Pistons traded Prince’s contract to Memphis, who traded him to Boston, who ended up trading him back to Detroit at this season’s trade deadline.  Expiring contracts mean that teams will try to essentially acquire future cap space rather than trading for the most valuable players.  It’s as frustrating as watching a team tank for draft picks or benching their starters in meaningless games.

Until the NBA gets rid of the clause that says trades must work in equal dollar value, this is a tactic that will be around for a long time.  It’s one that teams of all skill level, though mostly the bad teams, will utilize until they have no more roster spots.  The NFL can thank Lawrence Taylor’s hit on Joe Theismann for why left tackles are same of the highest paid players on an NFL roster.  We can thank the NBA’s flawed trading system for why players like Tayshaun Prince are still so, so valuable.

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