Memphis Grizzlies’ trades are latest signs of small-market NBA teams paying for new CBA

So, you had to trade me, huh? (AP Photo/The Canadian Press, Nathan Denette)

So, you had to trade me, huh? (AP Photo/The Canadian Press, Nathan Denette)

NBA Commissioner David Stern made an honest but startling declaration last month, given that it came nearly 14 months after a lengthy and contentious labor dispute that resulted in a second lockout-shortened season.

Perhaps comforted that his tenure will be over in February 2014 and that he’ll never have to negotiate another collective bargaining agreement, Stern tacitly acknowledged that arguments for maintaining competitive balance for smaller-market NBA teams through a punitive luxury tax penalty were merely rhetoric. Speaking during a 90-minute discussion about his four decades running the the NBA, Stern let the paying audience at the National Museum of the American Indian in on one of the league’s worst-kept secrets: that management – not market size – was a greater determinant for successful franchises.

The latest labor deal, which initially was hailed by the league as a victory for small-market NBA teams, has made it more difficult for well-run organizations without deep-pocketed owners to draft, develop, trade and build contenders without eventually sacrificing quality assets.

The Oklahoma City Thunder got out ahead of every team in the league and dealt reigning sixth man of the year James Harden to Houston in training camp when it determined that he would be too expensive to retain with a contract extension.

Memphis, another talent-rich small-market team, became the latest to prioritize fiscal responsibility over blindly spending with the hope of a payoff in June.

The Grizzlies shipped Rudy Gay, a relatively young but overpriced talent, to Toronto in a three-team deal that yielded promising big young man Ed Davis and a second-round pick from the Raptors and Tayshaun Prince and Austin Daye from Detroit.

A week earlier, the Grizzlies made another cost-cutting deal by sending Marreese Speights, Wayne Ellington, Josh Selby and a protected No. 1 pick to Cleveland for Jon Leuer, who has been playing in the NBA Development League.

Memphis achieved its financial goals with the trades, clearing roughly $16 million in commitments and no longer has to worry about a $4 million luxury-tax bill this season. Had the Grizzlies stuck with Gay’s deal through 2015, the tax penalty would’ve been more severe and increased each year because the team would be considered a repeat offender.

Unlike the Thunder, which has remained in contention to win it all after losing Harden (who has emerged as an all-star with the Rockets), questions now abound about what the Grizzlies are building, because owner Robert Pera and his new basketball operations staff — featuring former player agent Jason Levien and former ESPN analytics expert John Hollinger — have quickly torn down a team once viewed as a serious threat in the Western Conference.

Grizzlies Coach Lionel Hollins, who led his team within one game of the conference finals two years ago (with Gay sidelined with a shoulder injury and Shane Battier filling in), openly supported keeping the team together, hoping to see how far it could go. But Hollins also understood the economic challenges of being a small-market team, conceding this week to reporters in Oklahoma City, “When you have champagne taste, you can’t be on a beer budget.”

The Grizzlies could’ve possibly waited until the offseason to move Gay and Speights and still avoided paying the luxury tax. Gay is owed $37 million over the next two seasons, but with him having an opt-out clause for the 2014-15 season — when he is slated to earn about $19 million — teams were unwilling to surrender anything of value for a possible one-year rental.

At 26, Gay still has plenty of time to prove to be more than an immensely talented tease. But he no longer has the chance to reach his potential in Memphis, where the Grizzlies decided to stop giving him superstar money for slightly above-sub-par production and broke up the core of a possible title contender in order to avoid breaking the bank.

Memphis certainly had basketball motivations in trading Gay, with the team sputtering offensively, slumping since a red-hot November and with the Baltimore native showing signs of regression two seasons after shoulder surgery.

But economics, not necessarily a fair talent swap, once again became the primary factor for a trade in the NBA, where deals are rarely made without the buzzwords of “expiring contact” and “salary cap flexibility” attached to them.

The deal was more disconcerting because it came exactly five years after the organization traded Pau Gasol to the Lakers, creating a championship contender in Los Angeles. Memphis has moved into a better place since making the Gasol trade, but it remains one of the league’s smallest markets. Pera, who purchased the team from Michael Heisley last October, was well aware that despite being a playoff team for the second straight year, the franchise still lost more $12 million last season, according to Forbes magazine.

The Grizzlies couldn’t guarantee that a core of Gay, all-star forward Zach Randolph, former all-star center Marc Gasol and Mike Conley could compete with San Antonio, Oklahoma City and the Los Angeles Clippers, but backed out before giving it a real chance.

And the new collective bargaining agreement adds its latest casualty.

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