Hoops Rumors Glossary: Ted Stepien Rule

While a rule like the Gilbert Arenas provision can flatter its namesake, the late Ted Stepien, former owner of the Cavaliers, may have preferred not to go down in history as the reference point for the Ted Stepien rule.

Stepien owned the Cavs in the early 1980s, and made a number of trades that left the franchise without first-round picks for several years. As a result, the NBA eventually instituted a rule that prohibited teams from trading out of the first round for consecutive future seasons. It’s now informally known as the “Stepien rule,” even though the Cavs owner isn’t explicitly mentioned in the league’s Collective Bargaining Agreement.

Because the Stepien rule applies only to future draft picks, teams are still permitted to trade their first-rounders every year if they so choose, but they can’t trade out of the first round for back-to-back future drafts.

For instance, since the Celtics have traded their 2023 first-round pick to Indiana, they aren’t currently permitted to trade their 2024 first-rounder. Following the 2023 draft, the Celtics would regain the right to trade that 2024 first-round pick, since their ’23 first-rounder will no longer be considered a future pick.

The Stepien rule does allow a team to trade consecutive future first-round picks if the team has acquired a separate first-rounder from another team for either of those years. So if Boston were to trade for another team’s 2023 first-rounder, that would give the Celtics the flexibility to move their 2024 pick without having to wait until after the 2023 draft.

Teams are permitted to include protection on draft picks. This can create complications related to the Stepien rule, which prevents teams from trading a first-round pick if there’s any chance at all that it will leave a team without a first-rounder for two straight years.

For example, the Trail Blazers have traded a lottery-protected 2023 first-round pick to Chicago — it will only convey if it falls outside of the top 14. That traded 2023 pick is protected all the way through 2028, and as long as there’s still a chance it won’t convey immediately, the Blazers are prevented from unconditionally trading any of their next few first-round picks.

Portland could trade a conditional 2025 first-round pick, but a team acquiring that pick would have to accept that it would be pushed back one year every time the pick Portland has traded to Chicago doesn’t convey.

[RELATED: Traded first round picks for 2023 NBA draft]

Teams will have to take the Stepien rule into account at this season’s trade deadline as they mull including draft picks in deals. It’s why the Lakers, for instance, don’t currently have a tradable first-round pick prior to 2027.

As part of the Anthony Davis blockbuster, Los Angeles agreed to send its 2024 first-rounder to New Orleans, but the Pelicans have the option to defer that pick until 2025. As a result, the Lakers can’t trade their 2023 or 2026 first-rounder, since moving either one could put them in position to be without first-round picks in consecutive future years.

Here are a few more rules related to trading draft picks:

  • The “Seven Year Rule” prohibits teams from trading draft picks more than seven years in advance. During the 2022/23 season, a 2029 draft pick can be traded, but a 2030 pick cannot be dealt.
  • The Seven Year Rule applies to protections on picks as well. If a team wants to trade a lottery-protected 2029 first-rounder at this year’s deadline, it can’t roll those protections over to 2030. For example, one of the picks the Timberwolves sent to the Jazz in the Rudy Gobert trade is a top-five protected 2029 first-round pick. If that pick falls in its protected range, Utah will instead receive Minnesota’s 2029 second-rounder, since picks in 2030 and beyond were off limits when the two teams negotiated the protections.
  • A team can add protection to a pick it has acquired as long as there wasn’t already protection on the pick. For instance, the Jazz currently control the Timberwolves‘ unprotected 2023 first-round pick. If Utah wants to include that selection in a trade, the team could put, say, top-three protection on it.
  • For salary-matching purposes, a traded draft pick counts as $0 until the player signs a contract.

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.

Earlier version of this post were published in previous years.

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