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October 29, 2012
Transaction Analysis
Harden to Houston

by Kevin Pelton

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Houston Rockets

Acquired guards Daequan Cook and James Harden, forward Lazar Hayward and center Cole Aldrich from the Oklahoma City Thunder in exchange for guards Jeremy Lamb and Kevin Martin, the Dallas Mavericks' 2013 protected first-round pick, the Toronto Raptors' 2013 protected first-round pick and the Charlotte Bobcats' 2013 second-round pick. [10/27]

Finally, Daryl Morey landed his star player. It took some patience and a lot of trading to build up the asset base necessary to deal for Harden. Besides Martin, everything else Houston sent to Oklahoma City in this trade was acquired in the last eight months. The Dallas pick came from the L.A. Lakers in exchange for paying Derek Fisher's salary, a good deal that became a great one when Fisher agreed to walk away from his 2012-13 contract. The second-round pick was the centerpiece of the return from the Boston Celtics during the Courtney Lee sign-and-trade. (Oddly, it belonged to the Thunder before being sent to Boston by the league as compensation for not disclosing Jeff Green's heart condition.) The Toronto pick came from the Kyle Lowry trade, a risk that paid off with this subsequent move.

In Harden, the Rockets have added their best player since injuries forced Yao Ming into retirement. Over the next three years, multi-year WARP projections show Harden as one of the NBA's 15 most valuable players. He ascended to that level last season, when he finished 15th in the league in WARP. Harden's performance as the leader of Oklahoma City's second unit demonstrates his ability to comfortably step into a go-to role in Houston, even if there will be some cost in terms of efficiency.

Add in the fact that Harden plays what might be the NBA's most difficult position to fill and there is zero question he is worthy of a max contract extension. In fact, assuming Harden maintains his level of play over the life of the max five-year deal he could sign with the Rockets by Wednesday, the multi-year projections suggest he'll be worth more than such a deal by about 10 wins over the life of the extension. There is no way Houston could have gotten comparable value for its money in free agency, and the difference should be worth the draft picks the Rockets gave up.

Harden joins a Houston team that is very much in transition. The Rockets are still much too young to compete in the Western Conference. In fact, SCHOENE still has them fighting to stay out of the cellar in the West. In Jeremy Lin, Chandler Parsons and Omer Asik, the team has three starting-caliber pieces in place alongside Harden. The rest of the Houston roster is not ready to contribute to a winning team. So the next step is developing players like Terrence Jones, Donatas Motiejunas and Royce White to serve as complementary pieces. As that process unfolds, Morey will be able to identify where he needs to add talent and which players might be redundant. Barring an extremely unlikely playoff run this season, the Rockets will have another lottery pick next June, and by then we should have a better idea of the team's core talent.

The other pressing question this season is how well Lin and Harden can work together in the backcourt. Days before the opener, the Houston offense has suddenly changed focus from the Lin-driven attack we expected. Both Lin and Harden are best making plays off the dribble, primarily in the pick-and-roll, so there is going to be an adjustment period. Of course, the Thunder was able to make Harden and Russell Westbrook work, so this can be done, especially if Lin maintains last year's growth as an outside shooter. Harden won't be coming off the bench anymore, but the more Kevin McHale can stagger his minutes opposite Lin's, the better for the Rockets. A Harden-Toney Douglas backcourt has intriguing potential, since Harden papers over Douglas' difficulty making plays for teammates.

If there's a really minor downside to this deal, it's that Houston added more players to a roster that was already overcrowded. The Rockets must waive five players on Monday. Jonathan Feigen of the Houston Chronicle reported Sunday that Jon Brockman, Gary Forbes and JaJuan Johnson will be among that group, which leaves two more cuts to go. Shaun Livingston and Greg Smith are vulnerable because of contracts that are not fully guaranteed, while Hayward could have a short stay in Texas.

One way or another, the Rockets will be cutting some quality players.

Oklahoma City Thunder

Acquired guards Jeremy Lamb and Kevin Martin, the Dallas Mavericks' 2013 protected first-round pick, the Toronto Raptors' 2013 protected first-round pick and the Charlotte Bobcats' 2013 second-round pick from the Houston Rockets in exchange for guards Daequan Cook and James Harden, forward Lazar Hayward and center Cole Aldrich. [10/27]

When I first heard about this trade in the stands of CenturyLink Field Saturday night, I disliked the big-picture thinking that led the Thunder to trade Harden rather than pay the luxury tax for a season or two. Since then, I have grown increasingly dubious of the execution of the deal. Even if we start from the premise that Oklahoma City had no ability to keep Harden at the max--which is odd given the team's last offer to him on Saturday was within that ballpark--I think GM Sam Presti could have handled his trade better.

Let's be clear here: The Thunder has done major self-inflicted damage to its chances of returning to and winning the NBA Finals. SCHOENE's new projections (we'll have the complete update Tuesday) run through Bradford Doolittle's simulator, show Oklahoma City's chances of winning a championship declining from 14.2 percent to 1.9 percent. Martin may be able to duplicate Harden's efficient scoring off the bench, but he's not nearly as complete a player. Martin is one of the league's worst perimeter defenders, meaning the drop-off WARP shows (5.5 wins) may understate the case.

By dealing four players for two, the Thunder also compromised its depth to some extent. Hayward is easily replaceable, but both Aldrich and Cook had a chance to be part of their rotation. Oklahoma City will replace their minutes with reclamation projects at center (Hasheem Thabeet and likely Daniel Orton, who was waived Saturday but could be re-signed to fill one of the roster spots the deal opened up) and rookies (Lamb and Perry Jones III). I don't think Presti would have made this deal unless he was confident that Jones and Lamb could contribute, but putting one or both in the rotation is certainly a risk. Their translated college statistics rate both players worse than replacement level this season.

In large part, the success or failure of this deal could hinge on the development of Lamb, this year's 12th overall pick. After an impressive performance in Las Vegas, where he was named to the All-NBA Summer League Team, Lamb was relatively quiet in the preseason. Based on the performance of similar players, Lamb may need a few years to develop into a contributor. Most players SCHOENE compares to Lamb--a group that includes Jamal Crawford, DeMar DeRozan and Mike Miller--were effective starters or key reserves by their fourth seasons. At that point, however, Oklahoma City will be going through a similar extension process, so the sooner Lamb develops, the better. He'll have to improve his focus and strength defensively and become a consistent three-point shooter after making just 33.6 percent of his triples last season at Connecticut.

Based on our projection for the Raptors, who rate second behind the Mavericks among projected lottery teams, the Thunder may be looking at a pick in the 10-14 range this season, meaning another prospect of similar value to Lamb. The last first-round selection from Dallas could take a while longer to come through, as it is protected through the first 20 picks until 2018. The heavy protection ensures Oklahoma City will be getting a late-round pick in the deal.

The average 12th pick supplies 3.7 wins above salary over the course of their rookie contract, so two picks around that level and a late first-rounder won't match the 10 surplus wins Harden projects as worth during his extension before we even factor in his massive value this season (6.2 surplus wins over his paltry $5.8 million salary).

There's an argument to be made in favor of the Thunder time-shifting player value in order to assure the Durant-Westbrook-Ibaka core--with all three players younger than 25--can contend as the stars in L.A. and Miami begin to age. If Oklahoma City hits on the cost-controlled picks and Lamb, there will be plenty of room to add complementary pieces around the stars. That philosophy is a little more conservative than I would prefer, especially since we don't yet know how good the Thunder is without Harden as a key part of the mix, but I understand it.

What I don't quite get is the urgency to move Harden now. In his comments after the trade, Presti made it clear that as soon as Harden turned down the Thunder's last extension offer, the team was prepared to move on. (How quickly the deal with Houston came together certainly reinforces that.) Surely, Harden's unsettled situation would have been a distraction this season, and Presti has shown a preference for avoiding restricted free agency. The only other core player the team did not extend, Jeff Green, was also traded before hitting the market.

Ultimately, we're talking about an opportunity to win a championship this season, and such chances aren't guaranteed. Flags fly forever, to use the Prospectus cliche. I would argue that a similar deal would have been available from the Rockets as a sign-and-trade next summer, albeit complicated by the possibility that the Toronto pick may already have been made by that point. Other teams with the cap space to take on excess salary, like Dallas, Orlando or Utah, would surely have been willing to surrender valuable pieces to add Harden on a new contract. Such a strategy would have accomplished the dual goals of competing now and balancing the cap for the future.

The best solution for Oklahoma City would have been finding a way to deal with the short-term tax implications of keeping Harden, who will be impossible to replace. Once that possibility was ruled out, I still don't agree with the urgency to make a deal, especially one that is decent in terms of value but hardly overwhelming.

Check out our Pro Basketball Prospectus 2012-13 homepage for more details and to order our annual guide to the NBA, available now in both PDF and paperback format.

Kevin Pelton is an author of Basketball Prospectus. You can contact Kevin by clicking here or click here to see Kevin's other articles.

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