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A Midsummer Night’s Tax Scheme

Why did the Boston Celtics trade Abdel Nader instead of waiving him?

Boston Celtics v Chicago Bulls Photo by Jonathan Daniel/Getty Images

On a sleepy evening in late July, the Boston Celtics completed a trade that stirred the imaginations of cap enthusiasts everywhere. After previously being reported to be waiving Abdel Nader, the Celtics instead reversed course and traded Nader to the Oklahoma City Thunder. Boston also sent an as yet undetermined amount of cash to OKC in the deal and acquired guard Rodney Purvis.

So, why did the Celtics make such a seemingly meaningless deal in late July? And why didn’t they just waive Nader? Much like The Bard’s greatest works, sometimes you need to look at things a couple of times for it to really make sense.

Let’s start with the basic particulars. Boston had decided to move on from Nader. The Celtics have 14 guaranteed contracts and can only carry 15, plus two players on two-way contracts. As Nader was only partially guaranteed, and hadn’t played well enough to hold down a roster spot, the decision was more or less made for the Celtics. By waiving Nader, Boston would have had to eat the guaranteed $450,000 on his contract, but would have reduced the amount they were over the luxury tax by over $900,000.

Now, is dodging the tax this year all that important for the Celtics this year? That depends on who you read/listen to/talk to. Everyone has a different opinion. But one thing is clear: with a move like this, Boston is interested in trying to reduce that tax bill as low as possible or to zero, if possible.

Back to Nader: why not just waive him and eat the $450,000? Well, that leaves almost half a million on the books, that you would rather not have on the books, if you can avoid it. What about stretching that money? Sure. The Celtics could have done that. They did that with Demetrius Jackson last summer, when they engineered a brilliant transaction to spread the $650,000 owed to Jackson over seven years. How did they pull that off? When you stretch money, you can spread it across two times the number of years left on the contract, plus one additional year. Boston picked up their team option on Jackson’s final year, which made his contract three years in length. They then waived and stretched the $650,000 over seven years ((3 years x2) + 1 year = 7 years).

The Celtics could have done the same with Nader and dropped that $450,000 hit down to just over $64,000 over the next seven years. It would have involved picking up the team option on the final year of Nader’s deal, as they did with Jackson, but the option was on the table.

So, why trade Nader? Well, that answer seems pretty simple. Purvis’ contract is fully non-guaranteed. By acquiring Purvis, and then ultimately waiving him, the Celtics took that $450,000 and turned it into $0.00. That’s some pretty good work by Danny Ainge and the front office team.

To be fair, Boston is likely sending enough cash to OKC to cover Nader’s salary, and possibly enough to cover the cost of Nader’s salary plus the extra tax hit the Thunder are going to incur. But the cash isn’t an obstacle for the Celtics. It takes a little out of the bank that Boston could offer to buy a pick at the 2019 NBA Draft, but that’s hardly a worry. The team has enough draft picks coming, that buying one probably isn’t a concern.

In the end, assuming Boston does waive Purvis, the Celtics are now just under $2.5 million over the tax line. That’s an easy enough figure to work around, should Boston want to. And by moving Nader for the fully non-guaranteed/eventually waived Purvis, the Celtics also keep a roster spot open. That spot could presumably be filled by Jabari Bird on a standard contract, after he played last season on a two-way deal.

While it might seem a little Much Ado About Nothing, roster and cap management is often Love’s Labour Lost. But Measure for Measure, you simply hope to avoid The Comedy of Errors that has often spoiled The Winter’s Tale for many a team. In the end, All’s Well That Ends Well, especially when Danny Ainge and Mike Zarren are The Two Noble Kinsmen leading the way through The Tempest.