Trade Kickers

Since the contract of Pau Gasol, probably the most talked-about trade candidate so far this season, includes a 15% trade kicker, let's take a closer look at how trade kickers work. Formally known as trade bonuses, they represent extra cash that players receive when their teams trade them. Most NBA contracts don't include a trade kicker, but several players have been able to negotiate a kicker into their deals.

One rule regarding trade kickers changed in the 2011 CBA. For contracts signed since the new CBA took effect, the bonus must be paid by the team that trades the player, rather than the team on the other end of the trade. Sometimes the kicker is a fixed amount, but usually it's based on a percentage of the remaining value of the contract. So, a player who has a 15% trade kicker is given 15% of the amount of money he's yet to collect on his deal. The value of that kicker declines with each passing day during the season, since the amount the player gets for the current year of his deal is prorated.

By that math, Gasol would get a bonus of about $5,055,524 from the Lakers if they traded him today, since we're 41 days into a 170-day season. But as HoopsWorld's Alex Kennedy pointed out via Twitter this week, the value of the kicker is actually worth 3.4% of Gasol's remaining contract, instead of 15%. That's because Gasol's salary bumps up against the maximum, which for a player of 11 years experience like Gasol, is 35% of the salary cap.

Similarly, players on rookie-scale contracts can't make more than 120% of the scale amount, so if a first-round pick negotiates a trade kicker into his rookie deal, he can't wind up making more than 120% of the value assigned to his draft slot. This rarely happens, though, since first-round picks generally wind up with contracts worth 120% of the slot value anyway, thus getting rid of the need for a trade kicker in the deal. 

The amount of the kicker that's applied to a team's cap is spread out equally over the remaining years of the contract. So, if a player with two seasons left on his deal were due a kicker worth $1M, the team obligated to pay it would take a cap hit worth $500K in both of those seasons, regardless of whether the player's salary is different in each of the two years left on the deal.

However, if a player has years on the deal that are partially guaranteed or non-guaranteed, the cap hit is apportioned based on the guaranteed money in the deal, excluding all option years. So, if a player's contract is fully guaranteed this year and 50% guaranteed in the final year of the deal next season, two-thirds of the kicker would apply to this year's cap and one-third of it would be on next year's cap. If the contract was non-guaranteed next season, the entire trade kicker would hit this year's cap. 

Other notes on trade kickers:

• Player and team option years don't count toward the value of a kicker, unless the option has already been exercised. Years following early-termination options do count toward how much the player receives via the kicker, which represents a difference from how the team's cap hit is calculated. 
• Incentive clauses don't figure into the value of a kicker, which is calculated using a player's base compensation only.
• Players may waive any amount up to the full value of the trade kicker to facilitate a swap, if they wish. However, players can't change the amount of their trade kickers to allow a deal that would otherwise put a hard-capped team over the tax apron, even if everyone involved in the deal wants that to happen. Such a trade is simply illegal.
• For salary-matching purposes in trades, the kicker counts for the team absorbing the player, but not for the team that trades him away.

With a hat tip to Mark Deeks of ShamSports, here's a list of the players who currently have trade kickers, along with the negotiated value of the kicker in parentheses:

Ray Allen, Heat (15%)
Andrea Bargnani, Raptors (5%)
Nicolas Batum, Trail Blazers (15%)
Chris Bosh, Heat (15%)
Jose Calderon, Raptors (10%)
Vince Carter, Mavericks (10%)
Tyson Chandler, Knicks (lesser of 8% or $500K — so, the bonus would be $500K until midway through the 2014/15 season)
Pau Gasol, Lakers (15%)
Manu Ginobili, Spurs (5%)
Eric Gordon, Hornets (15%)
Blake Griffin, Clippers (15% - trade kicker takes effect next year, when his extension starts)
Udonis Haslem, Heat (15%)
Roy Hibbert, Pacers (15%)
LeBron James, Heat (15%)
Amir Johnson, Raptors (5%)
DeAndre Jordan, Clippers (15%)
Brook Lopez, Nets (15%)
Robin Lopez, Hornets (15%)
Shawn Marion, Mavericks (15%)
O.J. Mayo, Mavericks (15%)
Mike Miller, Heat (15%)
Nazr Mohammed, Bulls (15%)
Steve Nash, Lakers (15%)
Derrick Rose, Bulls (15%)
Josh Smith, Hawks, (15%)
Jason Terry, Celtics (7.5%)
Jason Thompson, Kings (5%)
Anderson Varejao, Cavaliers (5%)
Dwyane Wade, Heat (15%)
Deron Williams, Nets (15%)
Metta World Peace, Lakers (15%) 

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA's Collective Bargaining Agreement. Larry Coon's Salary Cap FAQ was used in the creation of this post.