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Various Ways Warriors Could Use Trade Exception

October 5th 2020 at 12:00pm CST by Luke Adams

The $17.2MM traded player exception held by the Warriors as a result of last year’s Andre Iguodala trade has become one of the most intriguing non-player assets to watch during the coming NBA offseason.

Trade exceptions allow NBA teams to take on a certain amount of salary without sending out any salary in return for matching purposes. While they typically expire after one year, the expiry dates for the Warriors’ TPE and the others created last July will be postponed until after the start of this year’s free agent period to make sure clubs still have a chance to use them. The start date for the 2020 free agent period remains up in the air, but appears likely to land sometime in late November.

Despite the extended deadline, the Warriors aren’t a lock to make use of their trade exception. Most TPEs ultimately go unused, and Golden State already projects to be a taxpaying team in 2020/21 — taking on additional salary will cost the team exponentially more in tax penalties.

Still, few NBA teams are more comfortable with a high payroll than the Warriors, and that exception represents one of the few paths the capped-out club has to improve its roster, so there has been plenty of speculation in recent months about how it could be used.

Much of that speculation has centered on the idea that the Warriors will try to acquire a single player whose salary is near that $17.2MM upper limit, but there are several other ways the team could theoretically look to utilize its TPE.

We’ll run through a few of those potential paths in the space below, so let’s dive right in…

Acquiring a single player

This is the simplest option for the Warriors and a potential trade partner. In this scenario, Golden State would likely send out a draft pick or two in exchange for a single player whose salary comes in below $17,285,185.

This category covers a wide range of possibilities. For instance, Golden State would be able to use the exception to accommodate a player like Evan Fournier, who is making $17.15MM next season. However, the team has no obligation to use as much of the TPE as possible, so it could just as easily be used to acquire a player earning $3MM or $4MM who might represent a better value.

Depending on the value and the cost of the incoming player, the Warriors may be willing to put one of their most valuable trade assets – this year’s No. 2 pick or next year’s top-three protected Timberwolves pick – on the table. But some veteran trade candidates won’t have nearly that high a price tag.

Acquiring multiple players

Unlike certain other salary cap exceptions – such as the disabled player exception – a trade exception can be used multiple times as long as there’s still money left on it. For instance, the Warriors’ $17MM+ TPE could be used to acquire a player earning $10MM and a second player earning $7MM.

There are countless examples of how this could work, but after using Fournier as our first example, let’s stick with the Magic — Golden State’s exception could theoretically be used to acquire, say, Terrence Ross ($13.5MM) and Khem Birch ($3MM). The Warriors could also use it in two separate trades.

Targeting multiple lower-cost players rather than one more expensive target could be a way for the Warriors to replenish their veteran depth.

Acquiring a bridge player

Yet another member of the Magic – Aaron Gordon – has frequently been cited as a potential trade target for the Warriors, but his 2020/21 salary ($18.14MM) isn’t quite small enough to fit into Golden State’s TPE. Because trade exceptions can’t be combined with player salaries, there’s no way for the Dubs to directly use their TPE to accommodate a Gordon deal.

However, there’s a workaround if the Warriors do want to target a player who makes a salary in that range — a “bridge” player.

Using the TPE, Golden State could theoretically acquire a player on an expiring contract in the $16-17MM range, such as Timberwolves forward James Johnson. From there, they could flip that player in a second trade to acquire someone making up to about $20MM, via normal salary-matching rules. Essentially, they’d be using the first player’s contract as a bridge to accommodate the second’s.

There are plenty of potential obstacles here. For one, it would mean working out two separate trades with two different teams — negotiating one deal is tricky enough, so adding the extra step might cost the Warriors an extra asset.

Additionally, if Golden State wants to turn around and flip a player it just acquired via trade, it can’t combine him with a second player for salary-matching purposes, which would limit the club’s options to some extent.

Still, if a player like Gordon or Myles Turner ($18MM) is high on the Warriors’ wish list, this route might be the most viable way of getting them to Golden State.

Acquiring a player via sign-and-trade

Although a trade exception can’t be used to sign a free agent outright, it can be used to accommodate a sign-and-trade, as long as certain criteria are met and the player’s first-year salary fits into the exception.

Unfortunately, this probably isn’t an option for the Warriors, since a team acquiring a player via sign-and-trade can’t have a team salary above the tax apron (approximately $138.9MM if the cap doesn’t increase) at any time during the league year. This restriction is why Golden State had to trade Iguodala in the first place last July to accommodate the D’Angelo Russell sign-and-trade.

The Warriors already have $142MM+ in guaranteed salaries on their books for 2020/21, so barring major cost-cutting moves, a sign-and-trade acquisition won’t be possible.

Claiming a player on waivers

A trade exception can also be used to claim a player off waivers, as long as his salary fits into the TPE. However, like the sign-and-trade concept, this may not be one of the Warriors’ more viable options.

If a team is waiving a player, it presumably means that team wasn’t able to trade him for anything of value. If that’s the case, Golden State is unlikely to want the player on the terms of his existing contract — he’ll likely pass through waivers and be available at a lower cost.

This is still a scenario worth keeping in the backs of our minds if a productive player hits waivers, but it seems like a long shot.

Completing a trade that allows the exception to be rolled over

A trade exception can essentially be “rolled over” if a team has an exception available but sends out salary as part of the deal anyway.

For example, if two teams swap a pair of players earning $15MM apiece and one team has a $15MM trade exception available, that club could use the exception to take on the incoming player and create a new exception using the outgoing player’s salary. That would reset the one-year clock to use the TPE.

This is a somewhat tricky concept, and in the Warriors’ case, it’s complicated further by the fact that the team has no contracts in the $17MM range — the only Golden State player earning between $5MM and $29.5MM in 2020/21 is Draymond Green ($22.24MM), who is unlikely to be dealt.

Still, there’s theoretically a way to make this work, especially if the Warriors’ trade partner has cap room. Here’s a hypothetical example: Let’s say the Hawks and Warriors work out a deal that sends Andrew Wiggins ($29.54MM) and a draft pick to Atlanta in exchange for Dewayne Dedmon ($13.33MM) and Kevin Huerter ($2.76MM).

The Hawks will have more than enough cap space available to accommodate the extra incoming salary, while the Warriors could fit Dedmon’s and Huerter’s contracts into their trade exception. As a result, Golden State could create a new trade exception worth Wiggins’ outgoing salary ($29.54MM) and would have a full year to use it.

I’m not sure either Atlanta or Golden State would be overly enthusiastic about that specific trade, but it serves as an example of how the Warriors could avoid losing the TPE while also avoiding tacking on a ton of extra money to their 2020/21 payroll. In this hypothetical scenario, they’d have even more flexibility with that new larger trade exception down the road, while also reducing their short-term team salary.

It will be difficult to find the right trade partner and the right combination of assets to make this scenario work. But last year’s Russell sign-and-trade was an example of the Warriors’ willingness to accumulate assets whenever and however they can in the hopes that they’ll be able to eventually maximize their value and fit — they knew Russell probably wouldn’t be a long-term fixture, but recognized getting him and trading him down the road was better than losing Kevin Durant for nothing. They’ll likely consider taking a similar approach with this trade exception if no other favorable options arise.

Contract information from Basketball Insiders was used in the creation of this post.

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