Toronto Raptors: Cap implications of Kawhi Leonard trade

The Kawhi Leonard, DeMar DeRozan trade impacted the Toronto Raptors payroll in many ways. We break every detail and how it impact’s the Raptors salary cap.

From a talent perspective, it appears the Toronto Raptors won the Kawhi Leonard deal. On the court next year, it is widely accepted the Raptors improved their team, even if the long-term impact of the deal is more up for debate.

But as backwards as it may sound, on the court is not the only thing that matters. When grading and determining the merits of a trade, one must take many other factors into account, particularly the salary-cap ramifications. The Kawhi trade involved many, including a couple of unexpected twists not reported until later.

Salary amounts

The two salaries the Spurs traded away were Kawhi Leonard’s $20.1 million contract Danny Green‘s $ 10 million deal. However, Kawhi Leonard had a 15% trade kicker included in his deal, making the incoming salaries just over $33 million.

Outgoing for Toronto is DeMar DeRozan’s $27.3 million deal and Jakob Poeltl‘s team friendly rookie deal worth just $2.9 million. As a whole Toronto is sending out  approximately $30.7 million.

In entirety Toronto gained a little more than $2.4 million in salary, a very negligible amount. However, due to Toronto’s current salary cap situation, the $2.4 million will actually cost them $7.8 million. (Kind of, it also increases their tax bracket whi….. I won’t bore you, lets say $7.8 mil).

Length of the contracts

For Toronto, maximizing cap-space in the summer of 2020 was always a priority. This deal helped the, do that.

Toronto is sending out DeMar’s contract which has two years and a player option remaining (I’d be very surprised if he turns down the option, so basically three), as well as, Jakob Poeltl’s contract that has just one year remaining and a team option. At the end of Poeltl’s contract, he also will be a restricted free-agent, so Toronto is losing value there.

Incoming are essentially two one-year deals. Danny Green has only one year remaining and will likely be asked to a pay decrease, whether it be in Toronto or elsewhere. Technically, Kawhi Leonard does have a player option to protect him if he suffers a gruesome injury this season, but other than that will certainly decline it.

Extra bonus

Initially not reported, it turns out the Toronto Raptors will also receive $5 million from the San Antonio Spurs to help cover the luxury tax increase of the deal.

$5.1 million is the largest amount that can be sent in any league year, so Toronto recouped almost as much as possible in the deal.

Still making moves?

According to a report by Ian Begley, the Toronto Raptors are still looking for ways to shed salary.

The news is not surprising, Toronto has yet to pay the luxury tax to this point and currently sits with a tax bill of approximately $31 million.

If Toronto is looking to get out of the tax completely, it will take a significant trade, if they are simply looking to reduce their bill, Norman Powell comes to mind as the obvious candidate.

Next: Who is Danny Green and what does he bring to the Toronto Raptors?

Hopefully the team is at least willing to pay at least some portion of the tax. If not we could see the excitement of Kawhi, being dampened real quick.