The Portland Trail Blazers are parting ways with center Deandre Ayton. The two sides have agreed to a buyout which will make Ayton an unrestricted free agent this year as soon as he clears the NBA waiver process. That should happen on Wednesday, as confirmed by NBA writer Marc Stein.
Here’s the lowdown on the process.
How Does a Buyout Work?
Agreement
A buyout happens when a player and a team mutually decide that they no longer wish to honor the terms of the otherwise-guaranteed contract both sides are bound to. In this case, Ayton had one year and $35.5 million remaining on his deal.
For a buyout to work, both teams must agree to an amount that satisfies the contract. Agreeing to a lower amount is possible, but it’s rare for a buyout to cut the amount of a contract drastically. Almost all NBA contracts are guaranteed. (All bought-out contracts are, otherwise they wouldn’t have to be bought out. The contract would just be terminated instead.) That means the player is owed the full amount of the deal, rain or shine. He might agree to a slightly lesser amount to get freedom in free agency and go to a team of choice, but he probably won’t give back a serious percentage of his guaranteed money just to be bought out.
Waivers
Once team and player agree on a buyout amount, the player enters the NBA waivers process. Waivers allow other NBA teams to claim recently-cut or bought-out players before they hit free agency outright. It usually lasts 48 hours. The 29 teams that didn’t cut the player have a right to assume his contract and take him onto their roster. If more than one team wants the player, the team with the worst record last season gets first rights.
Finances
In order to claim a player off of waivers, a team has to absorb the full amount of the buyout onto their cap ledger. They must have cap space to do so.
Financial burden and lack of available cap space usually conspire to keep expensive veterans from being claimed off of waivers. But if a new team does claim the player in the waiver process, his old team no longer has any obligation for his contract. The new team takes over payments and he comes off of the old team’s ledger entirely.
More commonly, a player passes through the waiver process unclaimed. At that point he becomes a free agent, able to sign with any team except the one who cut him.
The free agent and his new team are able to negotiate a new contract, but there’s a major wrinkle. The old team is still responsible for the player’s salary, financially and on the cap rolls. That responsibility is offset by the amount his new team signs him for.
In other words, let’s say Ayton is bought out for $30 million. The Blazers will owe him $30 million minus the amount of his new contract with his next team for the 2025-26 season. If he signs for $5 million with his new team, the new team will pay him $5 million and have that much counted against their salary cap. The Blazers will pay him the remaining $25 million from the buyout and that amount will remain on Portland’s salary cap for the year.
It’s pretty obvious that the new signing team has no reason to make more than the minimum required offer to their bought-out free agent. The player is going to make the same amount of money either way. It’s just a matter of who pays it, the new team or the old one. It’s common for bought-out players to sign a minimum-level contract with their new club, leaving their former franchise on the hook for the rest of the bill.
Obviously this is super fun for the new team. You get a good veteran player for the price of your 15th man. It’s less fun for the team that buys out that veteran and has to pay the remainder of his contract.
Why Are the Blazers and Ayton Breaking Up?
Shams Charania is reporting that Ayton approached the Blazers about a possible buyout in order to play with a contender. At first that seems insulting, but it’s actually a decent development if a buyout is on the table anyway. Ayton’s desire to move makes the chances of him taking less money greater than if the buyout had been initiated by the team. He has some incentive to agree to a lower amount. That’s good news for Portland.
No doubt Ayton was chagrined that the Blazers used their last two lottery picks to select centers. He could see the writing on the wall. Apparently he didn’t want to languish another year in Portland where he was not wanted. Playing for a winning team that valued his services was more attractive.
Jason Quick is reporting to The Athletic [subscription required] that Ayton was a headache for the team, with multiple fines for tardiness and a questionable attitude. If accurate, that helps explains the Blazers side of the story.
What Are the Benefits and Drawbacks for the Blazers?
Buyouts generally aren’t good for the team doing the buying out. Reaching that point in your relationship with a player means things have gone pretty wrong. The player is saying, “I’d rather give up some of my guaranteed money than spend another minute with you.” The team is saying, “We’d rather spend millions for nothing, flat-out subsidizing you to play for another franchise, than put you in our uniform again.” This is bad news for Portland.
That said, there may be a silver lining. Even shaving a few million off of Ayton’s salary obligation could make a difference.
By acquiring Jrue Holiday in the recent Anfernee Simons trade, the Blazers hard-capped themselves at the first apron of the luxury tax. If Portland wants to use a Mid-Level Exception to sign a veteran player this summer, that’s going to put them over the luxury tax threshold and bump them closer to their salary limit. Reducing Ayton’s obligation can mitigate that, either keeping them out of the tax penalty zone altogether or maintaining some flexibility when approaching the apron.
Newfound flexibility, more room for young centers to play, and any chemistry improvements the move might bring make up the benefits of the buyout for the Blazers. The cost of that is spending an enormous amount of money for a player who’s no longer on the roster.
Are There Any Further Options?
Yes. The Blazers can employ a contract stretch with Ayton’s buyout amount.
The stretch provision allows a team to amortize the bought out contract amount into a number of years equaling two times the remaining years on the contract plus one.
Ayton had a single year remaining on his deal. 2 x 1 + 1 = 3. The Blazers have the option of stretching the buyout amount over three seasons on their cap ledger instead of paying it all next year.
If Ayton and the team agreed to that $30 million sum, for instance, a stretch would leave the Blazers obligated to $10 million of cap space in each of the next three seasons instead of $30 million next season.
The advantage of the stretch move is that it gives the team even more maneuverability next year. Now they can use cap exceptions without bumping into the tax zone, let alone approaching the apron.
The disadvantage of stretching is tying up cap space two and three years down the road when you might need it. By that point the player is long gone. All that’s left is the headache.
If the Blazers want to play around with bunches of moves or a serious cap-exception signing or two this year, they might stretch Ayton’s buyout over the next three seasons. If they’re not going to make conclusive, long-term moves this summer, it’d be better to eat the cost and get it out of the way, freeing up space in later years when it will be more useful.
What’s the Bottom Line?
The bottom line is this. Deandre Ayton, one of the major pieces the Blazers got in return for trading Damian Lillard, did not work out in Portland. The relationship was enough of a headache that both sides decided to terminate it early and to pay real money to do so. This is not a good thing.
The move marks a major decision that General Manager Joe Cronin has to walk back. He made the Lillard deal. He valued Ayton enough to take him on board. He now values Ayton little enough to let him go at extra cost.
The Blazers would have been better off trading Ayton for assets rather than buying him out. Odds are the Blazers didn’t want to take on big contracts in return. That likely narrowed the field of candidates. Presumably no other teams valued Deandre highly enough to make Portland a decent offer.
That’s sad, but in isolation it’s not a huge deal. Things happen. Not every NBA trade and/or relationship works out.
Blazers fans will want to watch for a pattern. Ayton wasn’t Cronin’s only major decision over the last four years. Moving on from past choices in ways that develop future value is perfectly fine. That’s advancement. Having to pay to unload past mistakes is another matter. Portland won’t want to do this kind of thing too often. Buyouts, trading assets to get rid of players, or trading for lesser value are all bad signs for a franchise.
Where Do We Go From Here?
The key question now is how much Ayton wanted for the buyout. If the Blazers saved enough money to be flexible with this year’s moves without stretching Ayton’s contract, this is probably a no-harm, no-foul situation. In essence, they’ll be absorbing the cost of the buyout in order to clear space for Yang Hansen and Donovan Clingan to play without worrying about a mercurial veteran center ahead of them.
If Portland opts to stretch the contract, it’s more of a groaner. First, we’ll need to ask what they’re doing with the savings this year. If the answer is, “Nothing important,” we have to question why they’re tying up their cap in future seasons to no effect. Second, we’ll need to see whether those future obligations end up handcuffing them. If so, this temporary and trivial move could have more serious consequences down the road. That would make a bad situation worse.
Also pertinent: who’s going to own and run the team two or three seasons from now? The Blazers are being put up for sale. That will be a multi-month, if not multi-year, process. But you sure don’t want current leadership making life marginally easier for themselves while kicking a flaming can of cap crap down the road for future leaders. Financial strategy and stewardship matter here.
Summarizing, here are the next things to ask:
How much is the buyout amount?
Will the Blazers absorb the cost or stretch it over multiple seasons?
Depending on what they do, how are they making use of the flexibility they generate (or not)? If they end up stretching the contract, was it really advantageous to do so based on the moves they made this season? How does it cost the team down the road?
The more answers we get to those questions, the more we’ll understand the impact of this move. It’s definitely not a good thing, but it doesn’t have to be a horrible one either if the Blazers play their bad hand wisely.