Traded Player Exception
While many of us may prefer to simply rely on ESPN.com's Trade Machine to figure out whether or not a trade will work under NBA rules, it's worth examining the primary CBA detail that ESPN's tool uses to determine a trade's viability — the traded player exception. If a team makes a deal that will leave its total salary more than $100K above the salary cap, the club can use a traded player exception to ensure the trade is legal under CBA guidelines.
There are two different types of traded player exceptions used in NBA deals. One applies to simultaneous trades, while the other applies to non-simultaneous deals. In a simultaneous trade, a team can send out multiple players and can acquire more salary than it gives up. In a non-simultaneous trade, only a single player can be dealt, and the team has a year to take back up to that player's salary amount, plus $100K. Let's look into each scenario in greater detail….
In a simultaneous trade, different rules applies to taxpaying and non-taxpaying clubs. A non-taxpaying team can trade one or more players and take back….
- 150% of the outgoing salary (plus $100K), for any amount up to $9.8MM.
- The outgoing salary plus $5MM, for any amount between $9.8MM and $19.6MM.
- 125% of the outgoing salary (plus $100K), for any amount above $19.6MM.
Here's an example of the above rules in effect from this season's trade deadline:
The Blazers traded Gerald Wallace ($9.5MM) to the Nets for multiple players. Because the outgoing salary amounted to less than $9.8MM, Portland could have taken back up to $14.35MM in the deal — 150% (plus $100K) of Wallace's salary. The Blazers received Mehmet Okur ($10.89MM) and Shawne Williams ($3MM), whose salaries totaled $13.89MM, which fit in below the $14.35MM mark.
If Wallace's salary had been $10MM, the Blazers could have received up to $15MM in return (Wallace's salary plus $5MM). If his salary had been $20MM, Portland could have received up to $25.1MM in return (125% of Wallace's salary, plus $100K).
For taxpaying teams, the rules are simpler, albeit more restrictive: A taxpaying club can send out one or more players and take back 125% of the outgoing salary, plus $100K. For instance, when the Lakers traded Derek Fisher and his $3.4MM salary to Houston, they would have been allowed to take back up to $4.35MM.
In simultaneous transactions, the traded player exception is used to instantly complete the deal. There are no lingering loose ends in simultaneous trades. Our list of outstanding traded player exceptions comes as a result of non-simultaneous deals.
In non-simultaneous deals, a team can trade away a single player without immediately taking salary back in return. The team then has up to one year in which it can acquire multiple players whose salaries amount to no more than the traded player's salary (plus $100K).
For instance, when the Lakers traded Lamar Odom and his $8.9MM salary to the Mavericks in December for a first-round pick, it created a traded player exception worth $8.9MM. The Lakers have until next December to acquire one or more players whose salaries total up to $9MM ($8.9MM + $100K). If Los Angeles doesn't use the full trade exception within a year, it expires.
When evaluating an NBA trade, it's worth noting that the two teams can view the deal entirely differently. For example, one team could consider a trade simultaneous, while the other team breaks the transaction down into two separate trades, one simultaneous and one non-simultaneous. Let's take a look at a real-life example from this year's trade deadline: the Bucks' trade of Andrew Bogut and Stephen Jackson to the Warriors for Monta Ellis, Ekpe Udoh, and Kwame Brown.
From the Bucks' perspective, the trade broke down as follows:
- Bogut ($12MM) for Ellis ($11MM) and Udoh ($3.29MM). As a nontaxpayer, the Bucks could have absorbed up to $17MM (100% of Bogut's salary + $5MM) in a simultaneous deal for Bogut, so Ellis' and Udoh's $14.29MM fits comfortably.
- Jackson ($9.26MM) for Brown ($6.75MM). This segment of the deal is non-simultaneous, meaning the Bucks received a traded player exception for the difference between the two salaries ($2,506,500). They'll have until next March to use it.
And here's how it looked from the Warriors' perspective:
- Ellis ($11MM) for Bogut ($12MM). The Warriors could have taken back up to $16MM for Ellis (100% of his $11MM salary + $5MM), so they can easily absorb Bogut's $12MM salary.
- Brown ($6.75MM) for Jackson ($9.26MM). In this case, the Warriors could take up to 150% of Brown's salary, plus $100K, which would have been nearly $10.23MM, more than enough to absorb Jackson's $9.26MM figure.
- Udoh is left over and is essentially going to the Bucks for nothing, from Golden State's perspective. So the Warriors received a traded player exception worth Udoh's salary ($3,294,960), which they'll have until next March to use.
For salary-matching purposes, draft picks and players on minimum-salary contracts aren't taken into consideration. For instance, if a non-taxpaying team was sending out $5MM in a simultaneous deal, it could take back $7.6MM (150% of $5MM, plus $100K), and receive one or more minimum-salary players or draft picks in the deal.
The traded player exception is one of the CBA's trickier details, and makes it challenging for over-the-cap teams to navigate the trade market. It's undoubtedly simpler to use ESPN's Trade Machine to determine whether a deal is legal, but examining the rules and figuring out exactly how a blockbuster trade breaks down can provide rewarding insight into an NBA club's management of its cap.
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.
Thunder Rumors: Harden, Ibaka, Vorontsevich
Game 4 of the 2012 NBA Finals will get underway in a little over seven hours, and it's essentially a must-win game for the Thunder. No team in Finals history has ever come back from a 3-1 defecit to win the series.
According to John Hollinger of ESPN.com (Insider link), the key to the game for Oklahoma City will be its big-man rotation. Hollinger argues that some of Kendrick Perkins' minutes should be allotted to Nick Collison and Serge Ibaka. As Scott Brooks and his team prepare for tonight's contest, let's round up a few more Thunder-related items….
Ramon Sessions To Opt Out Of Contract
Ramon Sessions will opt out of his contract with the Lakers and will hit unrestricted free agency this offseason, according to Mike Bresnahan of the Los Angeles Times (via Twitter). Sessions had one year remaining on his four-year deal, a player option worth about $4.55MM, but will be seeking a new contract this summer rather than picking up the option.
Colangelo, Stefanski Talk Raptors Draft Options
The Raptors hold the eighth overall pick and appear to be open to a number of different possibilities with that pick. Ryan Wolstat of the Toronto Sun reported yesterday that the team is far more likely to keep its pick than trade it, and clarifies that stance today — according to Wolstat, moving back in the first round to acquire a player is also in play, but trading up or giving up the pick entirely for a player aren't looking like real possibilities (Twitter links). Here are a few more Tuesday morning Raptors items, with a strong focus on the draft….
Bradley Beal Drawing Heavy Interest
After making himself available to the top four teams in the draft, Bradley Beal is done with workouts, as Rick Bonnell of the Charlotte Observer writes. Beal is confident he's a top-four pick, and at least one league executive agrees, telling Alex Kennedy of HoopsWorld there's "no way" the Florida guard slips out of the top four (Twitter link). However, that doesn't necessarily mean Beal will become a Hornet, Bobcat, Wizard, or Cavalier — according to Kennedy (via Twitter), there are teams trying to trade into the top four to land Beal.
Hoops Rumors Mock Draft 1.0
As you've probably noticed, Hoops Rumors has been providing detailed and increasingly more frequent draft updates over the past few weeks, which can all be seen here. With June 28th just a week and a half away, we wanted to throw our hat into the draft ring by producing our own mock.
Below is the first version of that mock draft, which has been constructed using a combination of what we're hearing and what we consider to be a given team's needs. Each name is linked to that player's Prospect Profile entry. Obviously additional workouts and the potential for trades make this an evolving projection, so be sure to check back the week of the draft for an updated version. For now, each pick is based on the assumption that the team will not trade their selection and will draft accordingly.
Odds & Ends: Jazz, Harris, Raptors, Draft, Terry
Former Jazz point guard Blake Ahearn is an option for the club's Summer League team, tweets Brian T. Smith of The Salt Lake Tribune. As for the starting one-guard role, the Jazz know that they need a young floor general but are open to sticking with Devin Harris for another year. Utah fears that they will take a step back if they trade Harris because the 2012 draft is light on point guard prospects (via these Twitter links). Here's more on the Jazz and other items from around the Association as we await Game 4 tomorrow night..
Jason Kidd Open To Nets Return
Free agent Jason Kidd says that he would be open to returning to the Nets this summer, writes Stefan Bondy of the New York Daily News. The future Hall of Famer says that he likes owner Mikhail Prokhorov and the idea of playing in Brooklyn, but added that Deron Williams being there "is the key."
Bobcats Hire Mike Dunlap As Head Coach
The Bobcats have hired St. John's assistant Mike Dunlap to be their next head coach, according to Rick Bonnell of the Charlotte Observer (via Twitter). Just minutes ago the Bobcats reached out to finalists Brian Shaw, Quin Snyder, and Nate McMillan to inform them that they would not be getting the job.
Bobcats Eliminate Three From Search
8:12pm: Lakers assistant Quin Snyder has also been eliminated from consideration, according to Marc J. Spears of Yahoo Sports (via Twitter).
8:07pm: The Bobcats have told Pacers assistant coach Brian Shaw that he is no longer a candidate for their head coaching job, a source tells David Aldridge of TNT (via Twitter). Aldridge adds that Charlotte's decision on Shaw leaves Lakers assistant Quin Snyder as the clear favorite for the job, though Bobcats have said that they could look at additional candidates (Twitter link).