Yesterday, the Toronto Raptors traded 2x All NBA, 2 x NBA All-Star, 1 x NBA Champion Pascal Siakam to the Pacers for 3 first round draft picks and some players who act as salary filler. Two of the 1st round picks will be late in the first round of the 2024 draft. The 2024 draft is widely viewed a poor draft compared to other years. The third pick will be the Pacer’s 1st round pick in 2026. And, barring injury or a dramatic setback, that pick will be a late round pick as well given that the Pacers are projected to do well.
The haul back for the Raptors is largely underwhelming for a player as talented, dedicated and as accomplished as Pascal Siakam. He is a huge success story for the Toronto Raptor’s scouting and development team. For many Raptor fans, this trade feels like getting 50 cents on a very shinny dollar. There is no way that then Toronto Raptors would attract such a talent still in his prime through free agency. The notion that we are trading him away for little is hard to digest.
But why would the Raptors consider trading away such a talent in the first place?
Pascal’s contract with the Raptors is set to expire at the end of this season. The Raptors have tried to extend the contract, without success. Pascal is seeking a “max contract“, and the Raptors are not prepared to pay him those max dollars. So, instead of letting Pascal’s contract expire and receive nothing in exchange, they are trading him away. It’s better than letting him walk away for nothing.
Many NBA teams were not prepared to offer full value for Pascal given that he was under an expiring contract. There was no guarantee that he would re-sign with his new team. The market dictated that they would not pay full price for an expiring asset. This is completely fair, and smart.
But, there had to be a better way. There had to be a way such that the Raptors could get full value for their asset in trading Pascal Siakam. There must have been a sweet spot to pull the trigger on the deal such that the Raptors secured the best possible return for one of the franchise’s best players.
This idea of making a trade in a window to maximize one’s return is reminiscent of personal injury cases.
There is often a “sweet spot” to get cases settled to maximize the return.
Much like a piece of fruit on a vine; pick the fruit too early and it’s not yet ripe. Let the fruit sit too long on the vine and it’s overripe or rots on the vine. But pick the fruit at the right time, and it’s great.
Personal injury clients want to settle their cases quickly. But the potential return on that quick settlement might not be enough had the client been more patient and waited for their case to grow.
Sometimes clients (or their lawyers), don’t want the case to settle for a variety of reasons. This can be beneficial, or everyone could be missing a golden opportunity to maximize the value of the case before it begins to rot, or die.
There are “life events” which can cause a case to crest, or to die. These are very serious, and very real events which are largely out of a Plaintiff’s control. A subsequent accident, a serious illness unrelated to the accident, or perhaps an unforeseen death to the Plaintiff all dramatically change the potential outcome and dynamic of a Plaintiff’s case.
Other factors which are more within a Plaintiff’s control which will change the outcome and value of a Plaintiff’s case will include:
- A change (for the better) in the Plaintiff’s condition (ie s/he makes a significant recovery from their injuries)
- Damaging surveillance of a Plaintiff performing tasks which they said at discovery which they should not, or could not do
- A negative defence medical report
- A settlement of one of the Plaintiff’s collateral benefit claims or companion claims
- A Plaintiff moving outside of province or the country, thereby impacting their access to healthcare
- A complete return to functionality and employment to pre-accident levels
Chances are, any of the events above will negatively impact and reduce the value of a Plaintiff’s personal injury case, such that if a Plaintiff is seeking to settle, that settlement will be for less than what it would have been otherwise. Had the Plaintiff settled earlier, chances are that the value of the settlement would be for more. In this regard, timing is everything.
In many cases, a Plaintiff and their personal injury lawyer cannot wave a magic wand and compel the insurance company to settle when the insurer does not want to settle. But, a Plaintiff, just like management for the Toronto Raptors, need to be cognisant for that sweet spot and the law of diminishing returns. Sometimes, holding onto an asset for longer than is required is not the best option to maximize return.
Had the Toronto Raptors dealt Pascal Siakam last year, they would have received a greater trade return. But, because they hold on to their asset for too long, and failed to extend the asset, they were left with an underwhelming package.
A Plaintiff can certainly roll the dice and head to trial. Just as the Toronto Raptors could have opted not to trade Pascal Siakam and have him test the free agent market. But the risk in both instances is significant. If a Plaintiff loses his/her case at trial, they are left with nothing. The same applies to the Toronto Raptors. If they let Pascal go in to free agency and failed to re-sign him, they too, are left with nothing. In both cases, the risk is far too great and not worth the potential reward. The cost of certainty has value. It’s important to crystalize that certainty at an optimal time, otherwise, the return will leave the parties unsatisfied which isn’t a very good feeling.
Glad to have linked the Toronto Raptors recent trade to personal injury law in this week’s edition of the Toronto Injury Lawyer Blog.