Luol Deng trade: Bulls gain financial flexibility

Pat Lovell-USA TODAY Sports

In trading Luol Deng, the Chicago Bulls will obviously be worse in the short-term. Given their salary cap picture, it also means that they have the opportunity to be better in the long run.

By trading Luol Deng to the Cleveland Cavaliers in the middle of his 10th season with the team, the Chicago Bulls have entered a transition phase. This is the end of an era in which Derrick Rose, Joakim Noah, Carlos Boozer and Deng comprised the core. While the announcement came abruptly after 1 a.m. Monday night/Tuesday morning, the writing has been on the wall for a while. Given that Deng reportedly turned down a three-year, $30 million extension last week, via Yahoo!, it made financial sense for the Bulls to cut ties with their stalwart small forward.

Clairvoyant SB Nation contributor Mark Deeks outlined the logic behind trading Deng for Bynum on Sunday, over at ShamSports:

If the Bulls re-sign Deng, they will retain a quality player, but for a significant price as he starts his decline. They will keep the rare one club man, the perfect citizen, the loved elite role player who survived multiple down times with the team and came out of them all stronger than before, but they might worsen their basketball product in the process. Deng can be traded for assets, assets helpful for much longer than he could ever be. This should be a priority now.

Cleveland is armed with future assets. They have all their draft picks in future years, plus a whopping seven owed to them by others - four second rounders (2014 Memphis; 2014 Orlando; 2015 and 2016 Portland) and three protected first rounders (2014 Sacramento; 2015 Miami; 2015 Memphis). They do not need all of these if only for the simple reason they will run out of roster space. What they need is to consolidate these assets into a quality player. If they traded Bynum, the Memphis first rounder, and another asset (perhaps Tyler Zeller) for Deng, and concurrently signed him to an extension in the $11-$12 million range that the Bulls supposedly won't stretch to, the Cavaliers would get themselves a fringe All-Star locked in for years at a position where they have only backup calibre players, all for the cost of an otherwise waivable contract, a non-lottery first and a backup centre. Chicago, meanwhile, would dodge the tax (it ought be reiterated that Bynum is being traded for to be waived, not for his uses as a player), gain two young prospects, save themselves incalculable amounts of money, and, freed from the burden of Deng's contract or cap hold, make themselves hugely significant players in next year's free [agency] after an amnesty of Carlos Boozer. Even moreso with a surely possible Mike Dunleavy Jr trade.

The takeaway here is that Chicago's future looks brighter without Deng. The Bulls will miss him and they will be worse without him this season, but they have gained draft picks as well as solidified their plan moving forward.

Dodging the tax

Acquiring and waiving center Andrew Bynum immediately puts Chicago beneath the luxury tax threshold. Before the deal, the Bulls had just over $79 million in committed salary, placing them $8 million above the luxury tax. By dealing away Deng and his $14.2 million salary for Bynum, who can immediately be released and have his entire salary wiped off the books, the team's total payroll will drop to about $67 million, or $4 million under the tax. Not only will the Bulls save $12.3 million by releasing Bynum, they also will save approximately $13 million in luxury-tax payments.

This deal is therefore a significant money-saver in the short term.

Future assets

In addition to their own pick, the Bulls will have the Charlotte Bobcats' first-rounder if it falls outside of the top 10 this season. With the Deng trade, they also own a protected first-round pick from the Sacramento Kings (protected top 12 in 2014 and top 10 in 2015, 2016 and 2017) and two future second-round picks from the Portland Trail Blazers.

Cap space and flexibility

If the Bulls indeed use the amnesty provision on Carlos Boozer this summer, their roster will be constructed as follows: Rose, Noah, Jimmy Butler, Taj Gibson, Mike Dunleavy, Tony Snell, Marquis Teague and Erik Murphy. The team will have also about $14 million in cap space with which to bring former first-round pick Nikola Mirotic over from Real Madrid and chase free agents.

Simply replacing Boozer with Mirotic would give Chicago a fairly enviable core going forward in the East. Attaching a draft pick or two to Dunleavy or Teague's contract could give the Bulls an avenue to acquire another asset, or at least help them create more space in order to go after high-level free agents. Chicago did not have these options before trading Deng.

More from SB Nation NBA:

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