No. 4: The Kyle Lowry Trade
It’s often forgotten, but the biggest reason the legendary October 2012 trade for Harden became possible resulted from a separate innovative deal that Morey pulled off several months earlier.
The Rockets were at a crossroads entering the 2012 offseason. They had winning records in the last three seasons, but hadn’t made the playoffs in any of them. They needed an All-Star talent to take them to a higher level, but their middling records meant that they weren’t securing draft picks that were high enough to acquire those types of talents.
When Morey dealt promising young guard Kyle Lowry to the Raptors in July 2012 for a future first-round selection, it made sense on multiple fronts. For starters, it was the first time a draft pick used in a trade had reverse protection. To that point, many NBA trades included clauses to protect the team dealing the pick, in case later circumstances made that draft pick much more valuable than anticipated. For example, in that deal, Toronto would have deferred trading the pick to Houston to a later year had the pick been extremely high in the first round.
On July 5, 2012 the Raptors and Rockets agreed on a deal that would not only re-shape their franchises, but how draft picks are traded across the NBA.@ekoreen on the trade that delivered Kyle Lowry to Toronto, and eventually, James Harden to Houston.https://t.co/wjbfidCE8I
— The Athletic Toronto (@TheAthleticTO) November 26, 2019
However, the Lowry deal was the first time that both teams were protected. While Toronto had the clause protecting it in case the Raptors were worse than expected, Morey inserted a clause protecting the Rockets in case Toronto was better than expected. In other words, if the Raptors had a strong season and the pick was late in the first round — the pick would not convey to Houston that year. Instead, the pick conveyal would be delayed until it was in a satisfactory range for both teams.
This protected the Rockets from an asset perspective. In essence, Morey believed that a quality first-round draft pick would have more value in trades because it would have more utility. The draft choice — if assured of being high enough — was attractive in that it could be used on whatever player and position the receiving team wanted, whereas Lowry was a known quantity and might not be a fit for some rosters.
The second reason for the Lowry trade was that Morey and the Rockets seemed to realize after three consecutive seasons on the so-called “mediocrity treadmill” that they might have to take one step back in order to eventually take multiple steps forward. In addition to the future draft pick being a better asset, taking a good player in Lowry off the roster meant that the 2012-13 Rockets would, in theory, boost the value of their own draft pick that following year.
Fortunately, the Rockets never had to find out how that plan would work — because the Lowry pick was used as the centerpiece of the Harden deal just days before the next regular season began.
In the end, both franchises clearly won in this trade, since Lowry was a big part of Toronto’s 2019 NBA championship squad.