The term “poison pill” doesn’t actually show up in the NBA’s Collective Bargaining Agreement, but it’s used colloquially to refer to a provision in the CBA that affects players who recently signed rookie scale contract extensions.
As we explain in our glossary entry, the so-called poison pill provision applies when a player who signed a rookie scale extension is traded before the extension takes effect.
In that scenario, the player’s incoming value for the receiving team for matching purposes is determined by averaging his current-year salary and the salaries in each year of his new extension. His current team, on the other hand, simply treats his current-year salary as the outgoing figure for matching purposes.
For instance, Heat guard Tyler Herro is earning a $5,722,116 salary in 2022/23, but signed a four-year, $120MM extension that will begin in ’23/24. Therefore, if Miami wanted to trade Herro this season, his outgoing value for salary-matching purposes would be $5,722,116 (this year’s salary), while his incoming value for the team acquiring him would be $25,144,423 (this year’s salary, plus the $120MM extension, divided by five years).
[RELATED: 2022 NBA Rookie Scale Extension Recap]
Most of the players who signed rookie scale extensions aren’t candidates to be traded anytime soon. But even in the event that a team does want to look into trading one of these recently extended players, the gap between the player’s incoming trade value and outgoing trade value could make it a real challenge to find a deal that works for both sides.
The “poison pill” provision applies to 11 players who signed rookie scale extensions in 2022. Here are those players, along with their outgoing salaries and incoming salaries for trade purposes:
||Outgoing trade value
||Incoming trade value
|Kevin Porter Jr.
Once the 2023/24 league year begins, the poison pill provision will no longer apply to these players. At that time, the player’s ’23/24 salary would represent both his outgoing and incoming value.
Until then though, the gap between those outgoing and incoming figures will make it tricky for these players to be moved, with one or two exceptions.
The small difference between Little’s incoming and outgoing trade figures, for instance, wouldn’t be very problematic if the Blazers wanted to trade him. But the much larger divide between Poole’s incoming and outgoing numbers means there’s virtually no chance he could be moved to an over-the-cap team in 2022/23, even if the Warriors wanted to.