Trading away Paul George and Russell Westbrook in the summer of 2019 was supposed to send the Oklahoma City Thunder into a rebuild.
Instead, led by dynamic playmakers Chris Paul, Shai Gilgeous-Alexander and Dennis Schroder, the Thunder made the playoffs for the 11th time in 12 seasons.
With the team promoting assistant Mark Daigneault to head coach, as sources told ESPN's Adrian Wojnarowski on Wednesday, the focus now turns to free-agent power forward Danilo Gallinari and extension options for Schroder and center Steven Adams, as well as determining Paul's value. The Phoenix Suns have had discussions about acquiring Paul, sources told ESPN on Tuesday night.
Note: The financials in here are based on the salary cap and luxury tax holding at the 2019-20 levels, as expected. Dates are subject to adjustment.
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Free agent Danilo Gallinari
The trade that fell apart to Miami at the deadline should not be a sign that Gallinari is low on the priority list for the Thunder this offseason. Instead, expect to see retaining the 32-year-old forward near the top of Oklahoma City's to-do list.
This season, a relatively healthy Gallinari (he missed 10 games, his fewest since 2009-10) averaged 18.7 points, shot 40.5% from 3, posted a true shooting percentage of 61.2% and ranked No. 3 among power forwards in offensive real-plus minus.
Now, the questions: What will he cost? For how many years? And who exactly is Oklahoma City bidding against?
Factoring in their 12 players under contract and their draft pick, the Thunder are $25 million below the luxury tax line. A two-year, $32 million contract, starting at $15.4 million, would give Oklahoma City flexibility to use most of its $9.3 million midlevel exception or one of its two trade exceptions: $10.4 and $9.4 million.
Only one other playoff team is projected to have cap space: Miami. As we saw at the trade deadline, the Heat are unwilling to extend contracts past the 2020-21 season. The other four teams with room are the Atlanta Hawks, Charlotte Hornets, Detroit Pistons and the New York Knicks.
If Gallinari and the Thunder cannot work out a contract, both sides can explore the sign-and-trade option to one of the other 24 teams. But as we saw with Jimmy Butler going to the Miami Heat and D'Angelo Russell to the Golden State Warriors, the acquiring team would be hard-capped, restricting its roster flexibility.
The value of Chris Paul
It was a little more than a year ago that the $125 million owed to Chris Paul was deemed toxic. A trade seemed inevitable if the Thunder could find a team that would take CP3's contract without sending back an equally toxic salary.
Paul was coming off two seasons plagued by injuries (to his hamstring, knee and groin), playing only 58 games in each season. The 2018-19 season saw him post career lows in scoring and field goal percentage.
But now, 16 months after Houston traded him for Russell Westbrook, that sentiment has changed. The 10-time All-Star embraced the challenge and his role as leader, not treating his stay in Oklahoma City as temporary. Paul ranked fifth in the league this season in ESPN's real plus-minus (RPM). He missed only one game due to injury and was on pace to play 80 games for the first time since 2014-15.
The regular season and playoffs demonstrated that Oklahoma City does not have to move off the $85 million owed to Paul for the next two seasons. Instead, the Thunder can keep him because of his play on the court and also because of how they have balanced their finances.
Talks with the Suns have been ongoing and have continued to gather traction, but there is no deal imminent, sources said.
Dennis Schroder and Steven Adams
Do not let OKC's projected cap space of $50 million in 2021 fool you.
Thunder GM Sam Presti's track record is not to focus on recruiting A-list free agents. Rather, he has used the draft, trades and contract extensions as his primary tools.
Of the 15 players under contract for OKC, only four role players -- Mike Muscala, Luguentz Dort, Deonte Burton and Nerlens Noel -- were signed as free agents. When Kevin Durant departed in 2016, the Thunder acquired players via trade -- Jerami Grant, Taj Gibson, Doug McDermott, Carmelo Anthony and Schroder -- that limited Oklahoma City's cap flexibility.
For instance, instead of letting the $27.9 million Anthony contract expire after the 2018-19 season, the Thunder were willing to absorb Schroder's $15.5 million salary in 2019-20 and 2020-21.
Presti applied the same philosophy when Steven Adams signed a four-year, $100 million extension in 2016 and Russell Westbrook a supermax extension in 2017. Adams' $7.8 million free-agent hold was replaced with his $23.0 million salary.
This offseason, will Presti use those same principles when it comes to Schroder and Adams? Both players will be entering the last year of their respective contracts and are extension eligible.
Schroder is a candidate for Sixth Man of the Year and has thrived playing alongside Paul and Gilgeous-Alexander in a three-guard lineup. Per Cleaning the Glass, the lineup of Paul, Schroder and Gilegous-Alexander along with Gallinari and Adams ranks in the 95th percentile in plus-minus, points per possession and effective field goal percentage. Schroder turned 27 in September, and Oklahoma City can add up to four seasons to his current contract.
Adams is a longtime starter for OKC and one of the most durable centers in the league -- he has missed only 12 games over the past five seasons. As with Schroder, the Thunder can add an additional four seasons to Adams' contract.
The future draft assets
Starting with next week's draft, and looking forward seven years, OKC has an astounding 13 first-round picks and three sets of swap rights. Of the picks the Thunder have acquired, the most valuable are the unprotected firsts from the LA Clippers in 2022, 2024 and 2026. They also have the right to swap firsts with the Clippers in 2023 and 2025.
While the Clippers should still be contenders in 2022 and maybe 2023 (if Paul George and Kawhi Leonard re-sign), less clear is where their roster will be in 2024, 2025 and 2026.
Similarly, the long-term value of Houston's top-four-protected firsts in 2024 and 2026 -- acquired as part of the package in the Westbrook trade -- is an intriguing part of OKC's bounty. Westbrook (age 32 by next season) and James Harden (31) have contracts that expire after the 2022-23 season.
Oklahoma City also has the right to swap firsts (either their own or Miami's) with Houston in 2021 (top-four protected) and 2025 (top-10 protected). The 2021 unprotected first from Miami was thought at one time to be among the crown jewels of traded picks. But Miami's move up the Eastern Conference ladder means that it's probably a pick in the mid-20s.
The Thunder also have a lottery-protected first from Miami in 2023.
Offseason cap breakdown
Including the 2020 first-round pick from Denver, Oklahoma City is right at the $109.1 million salary cap with 13 players under contract. (OKC's first-round pick belongs to Philadelphia.)
The Thunder have two valuable trade exceptions: $10.4 million and $9.4 million.
Oklahoma City will have two exceptions: $9.3 million midlevel and $3.6 million biannual.
Resources available to build the roster
The draft: first- and second-round picks
Future draft assets
Own free agents: Gallinari, Noel and Roberson
Trade exceptions: $10.4 and $9.4 million
Exceptions: $9.3 million midlevel and $3.6 million biannual
$4.8 million in cash to send out and $4.6 million to receive in a trade
Moves to watch
The Thunder have team options on three players: Deonte Burton, Hamidou Diallo and Abdel Nader.
Burton's $1.6 million contract will be guaranteed for $1.1 million if Oklahoma City exercises the option. If he is on the roster by the start of free agency, the remaining salary will become guaranteed. In his two seasons with Thunder, the 24-year-old forward has played 71 regular-season games, averaging 2.6 points.
The $1.75 million contract of Nader does not become guaranteed even if the team exercises the option. The full salary becomes guaranteed if he is not waived by the start of free agency. Nader averaged 15.8 minutes during the regular season but played very little in the playoffs. It is likely that his option will get picked up and contract eventually guaranteed.
Diallo, a former second-round pick, has a deadline on his $1.66 million contract. The salary becomes guaranteed if the option is exercised. Diallo averaged 6.9 points in 46 games (with three starts) during the regular season.
Because the minimum-salary scale will likely remain the same from the 2019-20 season, Mike Muscala would lose $100,000 if he were to opt out of his contract and sign a minimum deal with a team other than the Thunder. Muscala can opt in to his $2.28 million salary. Muscala averaged 12.2 minutes during the regular season.
Restrictions
Adams has a 7.5% trade bonus in his contract. The bonus is currently $2.0 million and would be added to his $27.5 million contract if he were traded once free agency begins. If Adams is traded before the 2020-21 moratorium is lifted, the bonus would be divided between 2019-20 and next season.
Extension candidates
Schroder, Adams, Paul, Nader, Diallo and Terrance Ferguson are extension eligible.
Diallo and Nader can be extended for an additional four seasons and up to 120% of the average player salary.
Ferguson can be extended for an additional four seasons and up to 25% of the 2021-22 salary cap. The 22-year-old has seen his minutes decrease this season with the arrival of Dort. After averaging almost 26 minutes per game in the 2019 postseason, Ferguson's playing time was chopped in half in the 2020 playoffs.
The draft assets
Here's how ESPN's Jonathan Givony and Mike Schmitz have Oklahoma City selecting on Nov. 18:
No. 25 (via DEN): Jaden McDaniels | F | Washington
No. 53 (own): Killian Tillie | F/C | Gonzaga
From the 2018 Carmelo Anthony trade, Oklahoma City will send Atlanta a 2022 first (top-14 protected). If the pick is not conveyed, the Thunder will send 2024 and 2025 second-round picks to the Hawks.