The Toronto Raptors completed a deal on Tuesday to send Terrence Ross and their 2017 first-round pick to the Orlando Magic in exchange for Serge Ibaka. The move gives Toronto’s power forward position the upgrade necessary to challenge the Cleveland Cavaliers as Eastern Conference champions.
Serge Ibaka trade shows the Raptors are willing to pay up to take down LeBron James
Toronto will have to spend to retain its core free agents. But that’ll be the cost to dethrone The King.
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It also signals the franchise’s willingness to go all in with their core group as currently constructed.
In early February, the Portland Trail Blazers swapped centers with the eighth-seeded Denver Nuggets in what seems like a concession in the West’s playoff chase. The Raptors, who have fallen from No. 2 to the East’s fifth seed, doubled down on their team with the belief that it can make a run at an NBA Finals appearance.
And with a starting lineup of Kyle Lowry, DeMar DeRozan, DeMarre Carroll, Ibaka and Jonas Valanciunas, the thought of getting past Cleveland — who recently lost Kevin Love to knee surgery for six weeks — isn’t too farfetched at all.
But what does the trade mean going forward?
Ibaka becomes an unrestricted free agent at the end of this season, and with the projected salary cap spike to $102 million over the summer, he’ll likely command near-max money starting at more than $20 million a year.
The issue? All signs indicate Kyle Lowry will exercise his player option to opt-out of his contract this summer to command top-dollar in free agency. Lowry will enter his 12th year in the NBA, and under new Collective Bargaining Agreement rules, a maximum contract for a player with more than 10 years of experience will pay $36.1 million.
He is currently scheduled to make $12 million next season. You’d opt-out, too.
Toronto will have to re-sign both Lowry and Ibaka to at least a combined $55 million just one year after signing DeRozan to a five-year, $139 million contract.
It’s also worth noting the Raptors have never won an NBA championship and therefore have never spent the requisite money necessary to keep a group together.
The luxury tax line is projected at $122 million, and it’s unclear how much money Raptors ownership is willing to spend to chase a title — a chase that may not be fruitful competing against LeBron James.
Teams that spend more than the projected $122 million tax on player salaries are taxed an additional $1.50 for every dollar over the tax line, with more exponential penalties to follow for every $5 million further over the line. So the further over the tax line a team goes to re-sign its players, the higher the tax rate on each additional dollar spent.
The Raptors have nearly $77 million committed to player salaries next season, a number that’s closer to $82 million when the contracts of Norman Powell and Fred VanVleet guarantee during the offseason, and a rookie salary for Toronto’s remaining first-round pick is added.
That’s before Lowry’s $36 million max contract and Ibaka’s $20-plus million deal. It’s also before taking Patrick Patterson into account — Toronto’s reserve power forward is also a free agent and likely to command a hefty raise from his $6 million annual payout. The Raptors will also have a decision to make with Jared Sullinger, likely the odd man out.
If management is not willing to bite the financial bullet that comes with contending for a title, it would be feasible to look for cheaper alternatives to Valanciunas ($15.5 million), Carroll ($14.8 million) and Cory Joseph ($8 million). But all three are quality rotation players for a team that’s trying to win now.
It’s unclear what direction the Raptors will go this offseason. But their success in the playoffs this season will serve as a barometer to how they approach the summer and, more importantly, whether Toronto digs deep into its pockets for another deep postseason run.
With Lowry and DeRozan in their primes, the Raptors’ time is now. Trading for Ibaka signaled their intentions. Now, there’s no going back, even if it’ll cost them.
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