Rules For Trading Future Draft Picks

December 17 2013 at 11:45am CDT By Luke Adams

With trade season upon us and NBA teams coveting draft picks as strongly as ever, we should expect to see at least one or two first-rounders change hands in the coming weeks and months. As such, it’s worth revisiting the rules for trading future picks, as outlined in the league’s Collective Bargaining Agreement.

The Hoops Rumors glossary includes an entry on the Ted Stepien Rule, a condition that prohibits teams from trading back-to-back future first-round picks. Our write-up also includes a few other rules related to draft-pick trades. Still, while that glossary entry is definitely worth reading if you want to understand the basics of draft-pick trades, it may help more to take a look at a few specific cases with up-to-date examples to understand how those rules work in practice.

The Stepien rule, named after former Cavs owner Ted Stepien, was established so that franchises couldn’t trade away all their future first-round picks. Even teams like the Knicks, Nets, and Lakers, who are more willing than most clubs to part with draft picks, can only trade first-rounders for every other season. For instance, Brooklyn has traded away its 2014, 2016, and 2018 first-rounders — since the team isn’t allowed to give up back-to-back future first-round picks, that means the 2015 and 2017 picks can’t be offered up in deals, but the 2020 pick can.

Of course, in spite of the Stepien rule, a team could still end up without a first-round pick on an annual basis, since the rule only applies to future first-rounders. So a team like Toronto, which traded away its 2013 first-round pick, is now free to move its 2014 first-rounder, if it so chooses. In other words, a team can give up back-to-back first-round picks if the first of those two drafts has already passed.

Protected picks complicate the Stepien rule further. If there’s a possibility that the team will be without its first-round pick in a given year, the rule still applies, which means that clubs often limit their trade flexibility by placing several seasons of protections on traded picks. The Trail Blazers are a perfect example. Portland’s 2014 first-round pick will be sent to Charlotte if it’s not in the top 12, which seems like an awfully safe bet at this point, given the Blazers’ red-hot start. Still, because there’s a remote chance the pick may not change hands in 2014, the team can’t offer up its 2016 first-rounder in a trade. The Portland-to-Charlotte pick is top-12 protected in both 2014 and 2015, and unprotected in 2016. Since the pick will definitely change hands by 2016, the earliest first-rounder the Blazers are allowed to move is their 2018 pick.

Another quirk of draft-pick trading rules: Teams are allowed to trade away consecutive first-rounders of their own as long as they still adhere to the Stepien rule by acquiring other teams’ picks. For example, the Celtics are currently in line to receive 2014 and 2016 first-rounders from the Nets, along with a 2015 first-rounder from the Clippers. So if Danny Ainge wanted to, he could send out Boston’s own 2014, 2015, and 2016 first-round picks without any issue — he could even flip the Clippers’ 2015 pick on top of that, since it would still leave the team with the picks from the Nets in ’14 and ’16.

Most restrictions related to the Stepien rule apply only to first-round picks — teams can send out consecutive second-rounders with no issue. But there are some rules that apply to both first- and second-round picks. As has been discussed recently in the wake of trade rumors involving the Nets and Knicks, teams are also only permitted to trade draft picks for up to the next seven years. For the 2013/14 season, that means 2020 picks are the last ones eligible to be moved. In other words, while the Nets are allowed to trade their ’20 first-rounder, they can’t part with their ’21 pick until next July.

There are a few other rules related to trading draft picks, but we’ve covered most of the ones that will come into play as teams discuss deals over the next two months. As rumors trickle in, it’s worth keeping in mind that teams like the Nets, Knicks, Blazers, and others don’t have the flexibility to trade all the draft picks in their possession.

RealGM.com and Larry Coon’s Salary Cap FAQ were used in the creation of this post.

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