A year ago, five draft-night trades involving second-round picks saw money change hands between two NBA teams. In some cases, the cost of those picks wasn’t exorbitant — the Nuggets reportedly only received $730K from the Thunder in exchange for the rights to the No. 56 pick, which was used on Daniel Hamilton. However, the price tag on a few other picks was higher.
The Warriors, for instance, sent $2.4MM to the Bucks in exchange for the right to draft Patrick McCaw. The Nets gave $3MM to the Jazz for the right to move up and nab Isaiah Whitehead. The No. 54 pick, which was used on Kay Felder, cost the Cavaliers $2.47MM to acquire from Atlanta.
Teams with an excess of second-round picks will likely look to sell a selection or two this year, while clubs looking to get back into the second round can dangle cash in lieu of players or picks. But teams can’t simply send as much money as they want in order to acquire draft picks.
The NBA’s Collective Bargaining Agreement limits the amount of money teams can send and receive in trades during a given league year. For the 2016/17 season, the maximum is $3.5MM. A team can send out as much as $3.5MM in trades, and receive up to that amount as well, but after that point, they can’t use any more cash in trades.
Cash paid and cash received are separate entities, so a team that has sent out $3.5MM in trades can’t “start over” by receiving $3.5MM in another trade — once they’ve paid $3.5MM, they’re essentially capped out in terms of tradeable cash. Since the new league year doesn’t begin until July 1, trades made since July 2016 will affect how much money teams can pay or receive in this year’s draft.
There are potentially ways to get around these restrictions — if a team without any tradeable cash left badly wants to buy a second-round pick, it’s possible an agreement in principle with another club could be reached, and a trade could be finalized in July when spending resets. But both teams would have to be on board, and a team with the ability to send or receive cash this year may not want to hamper its 2017/18 flexibility by waiting. When teams sell draft picks for cash, those deals are generally made official on draft night.
According to data from Basketball Insiders, these are the teams that have already paid or received more than half of their $3.5MM limit in 2016/17, reducing their flexibility on draft night:
- Cleveland Cavaliers: $0 remaining ($3,500,000 paid)
- Dallas Mavericks: $272,714 remaining ($3,227,286 paid)
- Portland Trail Blazers: $575,000 remaining ($2,925,000 paid)
- Denver Nuggets: $0 remaining ($3,500,000 received)
- Philadelphia 76ers: $100,000 remaining ($3,400,000 received)
- Indiana Pacers: $272,714 remaining ($3,227,286 received)
The two teams impacted most by the money they’ve already spent or received in trades are probably the Cavaliers and Sixers. Cleveland has traded both of its 2017 picks, and will have a hard time getting back into the draft without any cash to use.
As for the Sixers, they have more picks than any other team in this draft, including four second-rounders. Philadelphia probably doesn’t want to use all of those picks, but trading them could be tricky, since the team isn’t eligible to receive more than $100K. If Philadelphia does trade a second-rounder or two, the return could be future picks rather than cash.