When ESPN’s Adrian Wojnarowski broke the news Monday night of the Knicks’ impending four-year contract extension with R.J. Barrett, he noted that the deal effectively “ends weeks of New York/Utah trade talk on [Donovan] Mitchell.”
Wojnarowski acknowledged within the same report, however, that what the Barrett extension really does is “forces [the] teams to start discussions over with significantly different parameters because of the Poison Pill provision.”
So what exactly is a “poison pill provision,” you may be asking?
Basically, it’s a way of dirtying up the math a bit in trade talks, thus making it more difficult for that player in question — in this case, Barrett — to be included in a deal. In this case, it works by mismatching the outgoing and incoming values of his contract.
Thoroughly confused yet? Some specifics will clear things up.
The 2022-23 season will be the final year of Barrett’s rookie contract. He will make a little over $10.9 million this coming season. His reported four-year, $120 million extension won’t kick in until the next season. So, whether he stays on the Knicks or is traded elsewhere, he’ll be paid $10.9M this season. The “poison pill” doesn’t impact the actual value of his salary whatsoever.
What it does impact is his trade value. When teams make a trade, the salaries they send out and the salaries they take back have to be within a certain percentage of each other. So, under normal circumstances, if the Jazz and Knicks were constructing a trade centered on Mitchell and Barrett, the Utah guard’s approximate $30.35-million salary for ’22-23 and Barrett’s $10.9-million figure would mean the Knicks would have to add in another $19.45 million (give or take, because of the acceptable wiggle room) to match salaries.
The poison pill throws all that out the window. With that provision in effect, if the Knicks were to trade Barrett, his outgoing trade value would still only count as that $10.9 million; but if the Jazz were to acquire him, his incoming trade value to them would be counted as his average salary over the full life of his now-five-year contract — about $26.2 million. The poison pill provision lasts until July 1, 2023.
That’s why it’s problematic for matching salaries.
Still, there are ways for the two teams to work around this, if they are actually committed to getting a deal done.
The simplest and most obvious is constructing a deal without Barrett in it.
There have been conflicting reports all along as to the Jazz’s interest in Barrett anyway. He’s clearly a talented player, as you’d expect from a former No. 3 overall pick. And as a 20-points-per-game scorer, he could have made a nice centerpiece in any return package for Mitchell. There were questions, though, about the Utah front office’s appetite for giving him an extension similar to the one the Knicks just handed out.
The sides could still construct a deal around the likes of Evan Fournier or Derrick Rose, plus some combination of Obi Toppin, Quentin Grimes, Cam Reddish, Miles McBride, Immanuel Quickley, et cetera. The caveat would be, of course, that without Barrett in the deal, the Jazz would almost certainly want more draft compensation, which appears to be the big hang-up between the teams in their stagnated trade discussions.
Meanwhile, if the Jazz really do want Barrett in the deal, there are still pathways to making the math work.
Dan Clayton of Salt City Hoops — a content partner of The Salt Lake Tribune — expertly broke down the scenarios that could allow it.
The first involves the teams finding the right other salaries to make the numbers work, for instance, swapping Mitchell and Rudy Gay for Barrett, Fournier and McBride.
A second scenario plays out similarly, but with the Jazz using one of their “traded player exceptions” (which teams receive when they take back less salary in trades) worth $9.6M and $9.7M respectively, to act as a “credit” of sorts and absorb some of the salary disparity.
The final option would involve a third team, to create more options to make the salaries match. In Clayton’s example, the Jazz send Mitchell to the Knicks, and Bojan Bogdanovic and Malik Beasley to the Lakers; the Knicks send Barrett to the Jazz and Rose to L.A.; and the Lakers send Westbrook to Utah. There would have to be draft picks as well, of course, but this way, the numbers line up, even with the poison pill.
So the Jazz and Knicks can still make a Mitchell trade happen, if they want, and if they can find common ground on the compensation.
They just may have to get a bit more creative about it.