I doubt the Wizards give up Butler for cap space. He's too good a player + has too good a contract + is too young to sacrifice for cap space. Arenas or Jamison, yes, but Butler? That would be a very odd decision.
I fully believe that Caron Butler is available in the trade market but I think the Wizards will be looking for talent, not cap space, in a trade.
He'd be the easiest to trade for both. Say, a young talent and an expiring deal. Arenas and (to a lesser extent) Jamison will be tougher to move...
Sacrificing Butler in a salary dump doesn't get the Wizards anywhere ... they still have too many other contracts on the books.
They have what $43 million on the books + cap holds for empty roster spots (5) + a first round draft pick. So they'll have maybe $3-7 million in cap space depending on where the cap ends up. That's worth giving up Caron Butler, Brendan Haywood, and the bird rights to Mike Miller + Randy Foye? To sign a player they could have gotten with their MLE? That doesn't make any sense to me.
Trading Caron Butler in a salary dump if other moves were already made or planned to be made ... that makes sense, that has value for Washington. But just a Caron Butler salary dump? By itself? Losing all that talent? For an MLEs worth of cap space? I don't get that.
That's a trade for the sakes of making a trade rather than give the club a way of improving itself.
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A trade that involves a young prospect + cap flexibility ... I would consider that a trade for talent assuming the prospect is the primary motivator for the deal (which is should be, otherwise I don't see the value).