Sessions/Lee sign-and-trade difficult, but not impossible

For a while I've been playing the role of spoiler whenever the possibility of a Ramon Sessions sign-and-trade is broached.  "The CBA makes a BYC S/T too difficult!"  I know, it's annoying.  And too full of acronyms.  But it's true for the most part. 

Sign-and-trades are hard enough to negotiate with unrestricted free agents, since both the player and two teams have to all agree on a deal.  What makes them even harder with restricted free agents is two-fold.  First, there's the additional leverage the incumbent team has in being able to match any offer for a player.  With Sessions, even the Bucks' lukewarm public stance on his future in Milwaukee has been enough to prevent the Knicks from actually making him an offer.  Further complicating matters is that any good restricted free agent will be in line for a sizable raise, which immediately makes them a base year compensation (BYC) player.  That means his new salary is discounted by half for the purposes of making a trade--but only from the perspective of their original team. And since capped out teams (like the Knicks and Bucks) are restricted to taking back 125% plus $100k of the salaries they send out, the BYC provision makes it very difficult to strike a deal.  But let's not be discouraged, and pose a difficult question instead: would there be a way to not only sign and trade Sessions to New York, but make Knicks' restricted free agent David Lee part of the package headed to Milwaukee?  There's a ton of moving parts, but the short answer is yes.

Let's start with the options both teams have.  If the Knicks wanted to sign Sessions to a deal starting at $5 million, the simplest thing is to just make him the offer, get his signature, and then hope the Bucks don't match.  After the offer sheet is signed, the Bucks can't sign-and-trade him anywhere else so it's winner-take-all.  Either the Bucks pass and Sessions walks, or they match and he's a Buck. 

If the Knicks are concerned about the Bucks matching, then Donnie Walsh and John Hammond can get together to see if they can come to an agreement, though they also have to be mindful of the fact that Sessions also has to agree to sign on to whatever they cook up.  As it happens, Gery Woelfel tweeted today that the two GMs did talk yesterday about that very possibility.  So far so good.

OK, so what could the Bucks realistically do to get Sessions to New York in a S/T?  From the Bucks' perspective, Sessions would count for only half his new 09/10 salary, which would obviously have to first be negotiated between the Knicks and Sessions.  Given the Knicks seemed hesitant to do a full MLE deal, let's assume it's $5 million for now (the length is irrelevant for trade purposes).  For a one-for-one trade to work, the Bucks could take back no more than $5 million x 50% (BYC effect) x 125% + $100k = $3.225 million.  But since both teams are over the cap, the Knicks would have to send out at least ($5 million - $100k)/125% = $3.92 million.  In other words, the minimum the Knicks have to send out is more than the maximum the Bucks can take back....so it's impossible.  The same would be true if the Bucks wanted to get Lee, who probably wants $10 million per but can't get it from anyone, at least not as a RFA.   A couple weeks ago John Hammond spoke glowingly of Lee on ESPN 540, so it appears he's a fan.  But with the Bucks having less than the MLE to work with (Jodie Meeks' $650k deal cut into the MLE since it wasn't a minimum deal), there's no way they can offer enough dollars without a sign-and-trade. 

So what can help bridge the gap?  More contracts.  Since the NBA's trade rules are percentage-based, adding significant salary to both sides can help overcome the BYC asymmetry that makes it hard to work out a deal.  For discussion's sake, let's throw Lee into the equation at maybe $7 million as a starting salary, which could get him $32.4 million over four years assuming max raises. Is that enough to entice him to come to Milwaukee?  Maybe, maybe not.  It does seem to be more than the 2010-mindful Knicks want to give him, but I'm speculating there as well. Let's also assume that if possible the Knicks and Bucks would be content to swap RFAs at those two starting salaries.

As you can imagine, Lee for Sessions straight up doesn't work because both guys would be BYC.  OK, so let's add some deadweight salary...how about Dan Gadzuric ($6.75 million) and Jared Jeffries ($6.47 million)?  Both guys have two years left and are essentially worthless on the court, so they don't really change the dynamics of a trade from a value perspective.  Still, Sessions/Gadzuric for Lee/Jeffries doesn't work with those Sessions/Lee starting salary assumptions of $5 and $7 million respectively. And playing around with the starting salaries doesn't change things (unless I'm missing something).  We need even more salary.

What about adding Luke Ridnour ($6.50 million) and Chris Duhon ($6.03 million)?  Again, their contracts are practically mirror images, as both guys have just one year left while providing backup-level production on the court.  From the Bucks' perspective, the deal now sends out 50% x $5 million + $6.75 million + $6.5 million = $15.75 million while taking back $7 million + $6.47 million + $6.03 million = $19.5 million.  Even though that's almost $4 million more going in than coming out, it works because they can take back as much as 125% x $15.75 + $100k = $19.79 million.  From the Knicks' perspective, they send out 50% x $7 million + $6.47 million + $6.03 million = $16 million.  They take back $5 million + $6.75 million + $6.5 million  = $18.25 million, which again works because they can take back as much as $16 million x 125% + $100k = $20.1 million. 

Given the Bucks' apparent disinterest in bringing back Sessions, I'd gladly take that deal even if Lee gets a big contract out of it.  I'm not sure if the Knicks do it, though they don't seem eager to pony up long-term dollars for Lee and just drafted Jordan Hill as a potential replacement anyway.  Instead they get a quality young point guard and otherwise retain their 2010 cap flexibility.  The Bucks would be adding $6.25 million on net to their payroll, so they'd have to start cutting salary to avoid the luxury tax.  That means waiving Bruce Bowen (who has been rumored to be heading out anyway), Sonny Weems (if that deal actually happens), and Salim Stoudamire plus finding other cost-cutting moves thereafter (like buying out Kurt Thomas).

But let's be clear: any deal remotely resembling this would be tough to work out.  Sessions and Lee would both have to agree to the contracts in addition to the Bucks and Knicks working out things between each other.  We haven't seen anything concrete suggesting a deal like this could go down, but all the circumstantial evidence out there suggests it could satisfy all parties.  Bowen's deal becomes fully guaranteed over the weekend, so if he's part of any trade it would seemingly have to happen in the next 24 hours (Update: Dan has a good example of a Sessions/Lee deal that involves Bowen over at RealGM).  If the Bucks don't find a deal then they will just waive Bowen and save $2 million, which would help facilitate a deal that adds salary such as the one above.

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