Hoops Rumors Glossary: Salary Aggregation

When an NBA team is over the salary cap and wants to make a trade, certain rules in the Collective Bargaining Agreement dictate how much salary the team is permitted to take back. These salary-matching rules are evolving – they changed prior to this season and will change again in 2024 – but in most cases, an over-the-cap team must send out nearly as much salary as it acquires for the trade to be legal.

In some scenarios, salary aggregation is required in order to legally match the incoming player’s cap hit. Aggregation is the act of combining multiple players’ salaries in order to reach that legal outgoing limit.

For example, let’s say Team A has a team salary above the first tax apron and wants to acquire a player earning $30MM from Team B. Sending out a player earning $25MM would fall short of the minimum requirement, since Team A can only bring back up to 110% of the outgoing amount. Trading a $25MM player would allow the team to acquire up to $27.5MM in salary.

However, by adding a second player earning $3MM to its package, Team A would reach the minimum outgoing threshold by “aggregating” its two traded players, resulting in a total of $28MM in outgoing salary — that’s enough to bring back a $30MM player.

Only player salaries can be aggregated. Trade exceptions cannot be aggregated with one another or with players. That means a team with a $10MM trade exception can’t aggregate that exception with a $20MM player (or a separate $20MM trade exception) to acquire a $30MM player.

Crucially, sending out two players together in a trade doesn’t necessarily mean they have to be aggregated.

For instance, if Team A sends out one player earning $28MM and another earning $5MM in exchange for its incoming $30MM player, there’s no need to aggregate the two outgoing salaries. Since $28MM is an amount sufficient to take back $30MM, the $5MM player can essentially be traded for “nothing,” creating a $5MM trade exception that could be used at a later date.

Because trade exceptions can only be created in “non-simultaneous” trades and salary aggregation can only be completed in a “simultaneous” trade, trade exceptions can’t be generated in scenarios in which salaries are aggregated. In the hypothetical trade above, swapping the $28MM player for the $30MM player represents a simultaneous trade, while sending out the $5MM player represents a non-simultaneous trade, resulting in the trade exception.

Here’s another example to illustrate that point, using the same $30MM incoming player: If Team A decides to salary-match by sending out one player earning $20MM and a second earning $15MM, that team can’t generate a trade exception worth the excess amount ($5MM), because the two outgoing salaries must be aggregated, resulting in a simultaneous trade.

One good recent example of salary aggregation came when the Clippers acquired James Harden and P.J. Tucker from the Sixers last month. Harden ($35,640,000) and Tucker ($11,014,500) were earning a combined $46,654,500, so the Clippers – whose team salary was above both tax aprons – needed to send out at least $42,413,182 to get to within 10% of that amount.

Paul George or Kawhi Leonard are each earning more than $42.4MM on their own, but they weren’t going to be part of the deal with Philadelphia and no other Clipper was making close to that amount, so the team had to aggregate several players’ salaries in order to meet the required threshold. Los Angeles used Marcus Morris ($17,116,279), Nicolas Batum ($11,710,818), Robert Covington ($11,692,308), and KJ Martin ($1,930,681) to get there.

Because the Clippers’ four outgoing players combined to earn $42,450,086, the team was able to take back up to $46,695,095 (110% of the outgoing amount). That means that Harden was able to receive a small portion ($40,595) of his trade bonus while waiving the remaining amount. If Harden had insisted on receiving even one more dollar of his bonus, the Clippers would have had to aggregate a fifth salary to make the deal work.

The NBA’s trade rules state that when a team acquires a player using salary-matching or a trade exception (rather than cap room), it cannot aggregate that player’s salary in a second trade for two months.

The one exception to that rule occurs if a player is traded on or before December 16, but less than two months until that season’s trade deadline. In that case, the player is permitted to be aggregated again either on the day before the deadline or the day of the deadline.

Any player traded after December 16 can’t have his salary aggregated with another player’s before the trade deadline. But, as outlined above, that doesn’t mean that a player acquired after today can’t be traded again before the deadline along with other players — it simply means his salary can’t be aggregated as part of the deal.

Here are a couple more notes related to salary aggregation:

  • Beginning in the 2024 offseason, a team whose total salary is above the second tax apron will not be permitted to aggregate salaries as part of a trade. A team that does aggregate salaries in a trade will become hard-capped at the second apron for the rest of that league year (or for the following league year, if the trade is made between the end of the regular season and June 30).
  • If a team is aggregating three (or more) player salaries in a trade in order to take back fewer than three (or more) players, no more than one of the aggregated players can be on a minimum-salary contract. This rule doesn’t apply between December 15 and the trade deadline, but is in effect the rest of the year.

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.

A previous version of this post was published in 2022.

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