If you were to list the Warriors' three best non-player assets at the moment, the $17.2 million trade exception they received as part of the Andre Iguodala trade with the Memphis Grizzlies last offseason certainly would be among them. The draft picks -- Golden State's No. 2 overall pick in 2020 and the Minnesota Timberwolves' top-three protected 2021 first-rounder -- could bring about a new era of Warriors basketball in the not-too-distant future, but the massive trade exception could change their fortunes in the immediate.
With that $17.2 million trade exception -- which expires seven days after free agency begins -- the Warriors can absorb any player whose salary for next season is equal to or less than that amount. However, in doing so, it will cost Golden State a heck of a lot more than that.
The Warriors already are projected to owe about $69 million in luxury tax penalties next season, and any additional dollar added to the ledger will be multiplied --according to their tax bracket -- on top of that. As such, if they were to absorb a salary equal to the full value of the trade exception, it would increase that projected tax bill by about $76 million. Even if the Warriors were to absorb a significantly smaller salary with the trade exception, it would still cost them several pretty pennies.
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And, given the massive loss of league revenue resulting from the COVID-19 pandemic, it stands to reason that the Warriors, and every other NBA team, will be more prudent in how they spend money this offseason. That explains why The Athletic's Anthony Slater reported last week, citing sources, that the Warriors will only use the trade exception for something they can't afford to pass up.
"But every extra dollar is multiplied in the Warriors’ tax bracket," Slater wrote, "and without knowing exact cap numbers or the future date that Chase Center will reopen to fans, sources increasingly insist on the usage of that $17.2 million exception: It’d have to be a special opportunity. Is an overpriced mid-rotation piece considered special?"
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A special opportunity, huh? As to how the Warriors define what constitutes "special" is anyone's guess, but we should find out before long. If they use the trade exception, clearly they view the acquired player as worth the massive investment it would take to add him to the roster.
Golden State Warriors
And if they don't? Well, the Warriors will lose one of their best assets for nothing, but at least it won't cost them anything extra.