Thought this deserved its own thread. From the Chron's NBA Notebook by Jonathan Feigen: Seems a good time to clear up a few things. While the Rockets are holding a trade exception worth $6.9 million, salary-cap rules do not allow them to combine that money with a player's salary to make a trade work. For some reason, there are those who refuse to believe this. But when making up trades for fun or profit, trust us, it can't be done. OK. If you won't trust us, trust NBA executive vice president for legal and business affairs Joel Litvin. He and his department must approve all NBA trades that go through. "You cannot aggregate a trade exception with a player's salary in order to make a trade," Litvin said. The Rockets can use some or all of the exception left over from the Glen Rice deal in a sign-and-trade deal for a free agent, allowing them to significantly outbid teams using only the mid-level exception (assuming the other team cooperates)."
Uh yeah Jonny, you're right. You just didn't ask the right question. Coon's FAQ lays it down pretty cleanly. Here is a more complicated example of a legal trade using the traded player exception: A team has a $4 million trade exception from an earlier trade, and a $10 million player it currently wants to trade. Another team has three players making $4 million, $5 million and $6 million, and the two teams want to do a three-for-one trade with these players. This is legal -- the $5 million and $6 million players together make less than the 115% plus $100,000 allowed for the $10 million player ($11,600,000), and the $4 million player exactly fits within the $4 million trade exception. So the $4 million player actually completes the previous trade, leaving the two teams trading a $10 million player for a $5 million and a $6 million player. Link If Orlando wanted to leave Cato out of the deal once Francis is no longer BYC, here's how it'd work... Francis+Mobley=17.21 mill McGrady+Gaines=15.70 mill Using the APE (aka, 15%+100K) that deal works. And then TE>Juwan Howard's salary of 5.41 mill. Net result: Francis+Mobley+TE for McGrady+Gaines+Howard. (Note: to include Lue, swap his spot with McGrady, and acquire Gaines with Howard for the trade exception).
To recap- We can not trade Francis+TE for McGrady. You have to think of them as separate transactions, but the TE may very well factor into this deal if Orlando doesn't want Cato. Howard+Gaines fits quite neatly into that 6.9 million exception, leaving us a few 100K, and that would leave Francis+Mobley for TMac/Lue.
What was the scenario with the Glen Rice-Shandon Anderson trade then? We sent Anderson plus a TE (from Hakeem trade to Toronto) to NY for Rice. Eisley from Dallas was in there somewhere. I guess Dallas sent us Eisley for the TE and we turned around and sent Eisley and Anderson for Rice?
Sounds like a sign and trade for Barry, or a salary dump by another team to us, would be the most likely use of the TE, if any.
NIKE...some food for thought.... First, I don't think it's reasonable for us to assume Coon's example should be taken as one of "exclusivity". IOW, because he gives one example, it's a leap to say that it only works that way given the fact that Coon does not specifically state that his example is the only one that works. He does not specifically exclude a single player for multiple players. Second and much more importantly, observe this portion of Coon's explanation of the TE (a little further up from your quoted section): "Trades are typically completed all at once. Such trades are dubbed simultaneous trades. However, teams actually have up to one year to acquire the replacement player(s) to complete a trade. These are considered non-simultaneous trades. In a non-simultaneous trade, a team can only acquire up to 100% plus $100,000 of the salary it gives up (as opposed to 115% plus $100,000 in a simultaneous trade). A trade in which more than one player is traded away can only be simultaneous; non-simultaneous trades are allowed only when a single player is traded away. Coon specifically states here that in a non-simultaneous trade, only one player can be outbound. I am hoping aelloitt will weigh in on this. At one time, he e-mailed me the exact section of the CBA which covers this. IMVHO, the CBA verbage appears to say that only one (or possibly no) outbound players can be used in the non-simultaneous portion of the trade. UPDATE: I just went back and re-read the quote from the lawyer. Re-phrased, the lawyer is stating a single, outbound Rockets players' salary can not be aggregated with the TE. IOW, Francis' $11.5m can't be combined with the TE for incoming contracts worth $18.49m ($11.5 + 6.99 TE). I absolutely agree. However, the lawyers response would indicated that a SnT for an FA is the only way the TE can be used. This is not true. IMO, NiKE's example using Juwan Howard is correct as well.
from NIKEstrad: I understand that I'm lost, I'm glad Feigen is too. Jeff, the way the snippet is written is admitting confusion. Capoligists of Clutch City.net awake and explain away the madness, please.
Look at NIKEstrad's post. He made it pretty clear. Basically, it allows us to take on an $6.9 mil in salary from any other team without giving back anything. That's it. We can get Howard for the TE because his salary is less than the exception. We cannot get T-Mac in any trade involving the TE because his salary is greater than the exception. Hence, no SF3+TE = T-Mac. It's as simple as that.
What if the trade exception and player are moved to different teams? Like for instance: Houston gets: Nick Van Exel (11 mil.) Golden State gets: 7 mil. trade exception + Kevin Ollie (3 mil.) Cleveland gets: Eric Piatkowski (3 mil.) Would this be legal?
If I'm reading this right, that wouldn't work. GS would have to trade two players, because otherwise we'd be combining Kevin Ollie with the TE. The way I read it, and I could be wrong, is that there is an order to which the rules are evaluated. First, you evaluate the rules of the trade exception, mainly that you can only trade it one-to-one for another player. Then, you evaluate the salary cap implications when used simultaneously in conjunction with trades for other players. What I'm not sure about is whether we can use the TE to get a player who exceeds the value of the TE as long as we balance it out with another trade. Could we trade scrubs plus TE for scrubs plus NVE given that NVE's salary exceeds the TE?
No. You can't just add the value of the exception. If we send out the trade exception (~7 mill) and Pike (~2.7 mill). We can get back a 7 mill player, as well as a ~3 mill player (115%+100K), but not a 10 mill player. For example: Houston gets: Derek Fisher (resigned at 7 mill) LA gets: Kevin Ollie+ ~4.3 mill trade exception Cleveland gets: Eric Piatkowski Not that this trade makes any logical sense for the parties involved.
Ok, Gater and I were kicking this one around just last week, so I've been doing some research and here's my conclusion. - There's no such thing as a TE. It's really what is called a "non-simultaneous" trade. - In a non-simultaneous trade, in order to receive a trade exception, you can only be trading away a single player. To me, that means that I can only be sending out one player in either half of the non-simultaneous deal. This is the part that was throwing me off, because of the Glen Rice/Shandon Anderson trade it appeared that we send Olajuwon out in the first part of a non-simultaneous trade and then later shipped Anderson out in the second part of the deal. Turns out that the Rockets did not use their trade exception (as was reported) to make the Rice/Anderson salaries match up. Instead, they used the available cap space that they had in the '01 offseason. There's nothing in the CBA saying that a player and a TE can't be combined. It just says that you can only be sending out a single player in a non-simultaneous deal. - The thing that Feigan is missing is the fact that you are allowed to break our side of a simultaneous deal into two parts 1) the completion of a non-simultaneous deal and 2) the remaining simultaneous part of the deal. The catch is that each part of the deal must work on it's own. Here's an example: 1) Rockets trade Glen Rice to Utah for Amechi. We only sent out a single player and we took back less salary so we received a TE for the difference ($6.9M). As stated earlier, there really isn't any exception, that was just the first half of a non-simultaneous trade. 2) I'll use Eddie Griffin in the example since he was the player that Feigan had originally sited in his explanation. So, at the start of this season (Griffin was still under contract at $2.9M), we could not trade Griffin + TE for a player making $9.8M, because we weren't allowed to include a 2nd player in a non-simultaneous trade. 3) What we could have done is to trade Eddie Griffin ($2.9M) for a player making $6.9M, because it can be broken into two separated deals. The deal works from Houston's side because in part 1) we complete the non-simultaneous deal by acquiring a player with a $6.9M salary in exchange for the exception... that works. In the second portion of the deal, we were trading off Griffin and receiving nothing in return. Teams are always allowed to take back less salary, so both the simultaneous and non-simultaneous parts of the trade work for the Rockets. The deal works from the other team's point of view because they are giving up $6.9M in salary and only taking back $2.9M. The tricky part is that while the deal is broken into two parts from the Rockets side, it's still a single deal from the other teams pespective. I know that still isn't as simple as I'd like to make the explanation, but I don't know how to make it any easier to understand. It's a fairly complex rule. In summary, the general rule of thumb for using a trade exception is : (Player A, whose salary is less than the TD) + TE = (Player B, whose salary is > player A's salary and <= TE) ex: ---- Eddie Griffin ($2.9M) + TE ($6.9M) = Player making between $2.9M and $6.9M) Note: That rule of thumb that I just gave is for calculating a deal for a single player in return (i.e how big of a contract can we get back). The trade exception can also be used in a deal where we get back multiple players. You still break the trade up into two parts, the completion of a non-simultaneous deal and the simultaneous part. Both parts have to work for the deal to be legal. So, in reality when Feigan said that you can't trade EG + TE for a $9.8M player, then he was correct. When he said that you can't combine a player and a TE in a deal, he's incorrect. While an additional player isn't being included in the completion of the non-simultaneous deal, they are still both part of the same overall deal. NOTE: NIKE's posts are correct, I'm trying to give a little more explanation of how the rule works.
NIKE gives a good example of another way to use the exception. Here's an explanation of why his deal works: Cleveland: Trade out Ollie, receive Piatkowski. Salaries are within 15% + $100K, so deal works for their side. LA: Send out Fisher and receive Ollie. LA is taking back less salary, so the deal works from their end (they'd also get a TE for the difference). Hou: Our side is broken into two parts: a) Complete the non-simultaneous Glen Rice trade and get Fisher for the exception. b) trade Piatkowski and take nothing back. You're always allowed to take back less salary. So both the simultaneous and non-simultaneous parts of the deal work for Houston.
The one thing I'm struggling with right now is whether to make it look like a singular transaction or not. Francis (BYC)=11.33 (5.67) Mobley=5.88 Cato=7.99 Sum of Rockets salaries-25.2 mill Adjusted for Francis BYC- 19.52 mill McGrady-14.49 Howard- 5.41 Lue-1.65 Gaines-1.21 Sum of Magic salaries: 22.76 mill The Magic can absorb the 3 Rockets players through the APE, that much is certain. What I'm not sure of is, if we use the non-simultaneous trade exception for Howard, is it viewed as a separate transaction? If so, the sum of the Magic salaries drops to 17.3 mill or so, which is not enough to take on the 3 Rockets players. (*If Ford's speculation Cato is to be dropped is correct, it would work just fine for Francis+Mobley once Francis' BYC expires). On a side note, through some number crunching, by adding Adrian Griffin to the above deal, everything works fine with Francis' BYC. That 2 year contract we gave Adrian Griffin may be one of the keys to getting McGrady. Similar to what we did with Stacey Augmon, the Magic could then waive him and we can resign him off waivers, or not. The Rockets sum salary would be 26.01 mill. Adjusted for Francis' BYC it is 20.347 mill. With Francis' BYC, the Rockets can take back 115%+100K of that 20.347 mill, which comes to a few hundred dollars under 23.50 mill. The Magic sum salaries of 22.76 mill fit within this number. The Magic can take back 115%+100K of the 22.76 mill they have outgoing, or 26.27 mill. The Rockets sum salary of 26.01 mill fits within this. Trade Accepted.
This thread rocks...I believe that from the Magic's point of view it is viewed as a potential single transaction
