Raptors may lose more than T-Mac - According to The Toronto Star: A convoluted clause in the salary cap rules virtually ensures the Raptors will get nothing for Tracy McGrady if he bolts as a free agent. McGrady made less than $2 million last year and will make about $9 million next season. As a base-year player, McGrady's salary for cap purposes for the team obtaining him is $9 million but, under cap rules, the Raptors can only take back a salary or salaries worth 50 per cent of McGrady's total, or approximately $4.5 million (U.S.). That means a team obtaining him must have a minimum of $4.5 million clear under the cap, along with a player making $4.5 million in whom the Raptors had interest. The largest drawback is that a team trying to acquire McGrady would likely not have $4.5 million in cap space to assume. A three-way deal could be worked out, involving teams with major cap room - the Chicago Bulls, Orlando Magic or Los Angeles Clippers - but none of them have players under contract whose salaries fit. ``Sign-and-trades sound good, but they're almost impossible to work out,'' said one anonymous agent. Raptor GM Glen Grunwald, who still holds hope of signing McGrady (despite T-Mac's recent assertion that a Raptor return might be impossible), said the rules ``make it extremely difficult'' to work out a sign-and-trade deal that suits everyone. this article is from nbatalk, and from what i understand we have EXACTLY 4.5 million in a trade exception.....so can't we do a sign and trade for him so they'll AT LEAST get the trade exception rather than nothing.....is it possible, or it doesn''t work?
McGreedy is not worth $9 million a year at this point in his career. Name one thing he has done to warrant such a large contract? Now, if he wants to come here for $4-6 million for a year or two, then we'll talk max salaries with him. ------------------ We need some meat in the post!
Aelliott's help is needed: I thought BYC does not take effect if you do an immediate sign and trade? Doesnt it only take affect if say the Raptors signed T-Mac then for some reason wanted to deal him a couple of months down the road? B/c the Suns pulled off pretty much a dollar for dollar trade for Penny Hardaway in a sign and trade right? Am I totally missing something here? ------------------ Check out the Best Source for Draft Info Draftsource.net
I really hate to ask this because I'm sure it's been discussed before but, can a sign and trade player be traded for another sign and trade player? ------------------
No, they can't -- that's under the CBA somewhere. McGrady for example couldn't be dealt for a package involving any players that also needed to be signed and traded (Mobley, for example). ------------------ NOTHING BUT .NET CLUTCHCITY.NET
I'm replacing my text with Larry Coon's, so a quote isn't my 2000th post. In summary, there are some minor flaws in the above article, but the writer is largely correct. And so is Aelliott. [This message has been edited by heypartner (edited June 13, 2000).]
Clutch, the Raptors could sign McGrady to a max deal ($9 million) and be traded to the Rockets for say the 9th pick in the draft (no financial trade value) and the $4.4 million exception (within 15% of McGrady's $4.5 million cap value) ? No, McGrady's $4.5M BYC value is only applicable to Toronto. That's just the maximum that they are allowed to receive in return for him. From Houston's end, they'd be receiving $9M in salary and giving up nothing (since draft picks don't count as salary in trades). That's too much difference for the exception to cover. Since Houston is over the cap, they'd have to be giving up 85% of what they are receiving. $9M - $4.4M = $4.6M, leaves approximately $4.6M for the Rockets to make up. Since we only have to be within 15% of what we are receiving, we'd need to include salaries that total $3.91M. So, we could trade the #9, plus ~$3.91M in salaries for McGrady. ------------------
Aelliott, Thanks for the clarification on the Penny Hardaway signing. I have a couple more questions: 1. How much would Cato count as a BYC player in this deal and could it be done with him there? Since the Raptors are capped out could they take on Cato's BYC since they are trading down in salary or does that work differently? 2. Since both Portland and Toronto are capped out, that Grant and Wells for McGrady rumor is probably bogus right? Also, if a third team with cap room (Clippers) were brought in to facilitate the deal, would they have to take on 4.5 mil plus or minus 15%? If this is the case, then that team could not take on either Grant or Wells to make it work b/c neither of them are in that range right? Thanks for the help. ------------------ Check out the Best Source for Draft Info Draftsource.net
aelliott -- thanks for the response. That makes a lot more sense... didn't sound right you could turn a draft pick and an exception into a $70 million player when you're over the cap... but still, not much salary that needs to go in there to make something like that work. ------------------ NOTHING BUT .NET CLUTCHCITY.NET
MManal, How much would Cato count as a BYC player in this deal and could it be done with him there? Since the Raptors are capped out could they take on Cato's BYC since they are trading down in salary or does that work differently? The first year of Cato's new deal should be around $5.3M, so his BYC value is 50% of that or $2.65M. I'm assuming that you're refering to a deal of Cato and the #9 for McGrady. Houston: gives up $5.3M (Cato)in salary but can only get $2.65M in return. Add in the $4.4M exception and that bumps the total to $7.05M. That's still a little short of being within $15% of McGrady's $9M ($7.65). Bottom line, Houston could throw in ~600K in salary to make their side work. Toronto: Gives up $9M (McGrady) in salary, but can only get $4.5M in return. They would be receiving Cato ($5.3M) and a throw in player ($600K) for a total of $5.9M. Since this is more than Toronto is allowed to get back, they can't do the deal. They'd need a third team to absorb some of the extra salary. Since both Portland and Toronto are capped out, that Grant and Wells for McGrady rumor is probably bogus right? It depends on what Grant makes next year. If McGrady signs for $9M, then Toronto can get back up to 115% of his salary $(10.35) or as little as 85% of his salary($7.65M). Wells should make around $1.6M next year, so for the deal to work, Grant would have to make between $6.05M and $8.75M. He made $7.6M last year, so I'm guessing that he'll be close to that range next year, but I can't tell for sure. Also, if a third team with cap room (Clippers) were brought in to facilitate the deal, would they have to take on 4.5 mil plus or minus 15%? Generally in a deal that requires a third party, the deal already works for one of the two parties (usually one team is trading down in salary, but BYC could make both sides illegal). So, all the 3rd team would need to do is to absorb the neccessary amount to make the deal work for the one team that is illegal. In the Cato example above, the 3rd team would only need to absorb around $1.4M (give or take 15%) to make the deal work. The problem in the above Cato example is that there's no way to get $1.4M in salary out of Cato ($5.3M) and a $600M player (i.e. if you give the Clips Cato, that's too much, if you give them the throw in, then that's not enough. The solution is to throw in extra players on all sides until the numbers match up. That's real similar to what we saw with the Francis 3 way deal. Lot's of players thrown in to make the numbers match. ------------------ [This message has been edited by aelliott (edited June 13, 2000).]
aelliott-You said this: Since both Portland and Toronto are capped out, that Grant and Wells for McGrady rumor is probably bogus right? It depends on what Grant makes next year. If McGrady signs for $9M, then Toronto can get back up to 115% of his salary $(10.35) or as little as 85% of his salary($7.65M). Wells should make around $1.6M next year, so for the deal to work, Grant would have to make between $6.05M and $8.75M. He made $7.6M last year, so I'm guessing that he'll be close to that range next year, but I can't tell for sure. I thought Toronto could only get back 4.5 mill, cause of BYC? ------------------ Rockets fans wanted at hoopsboards.com Draft Chat, NBA Chat, Team Chat, and more!
Thanks for the explanation Aelliott. ------------------ Check out the Best Source for Draft Info Draftsource.net
MManal, I thought BYC does not take effect if you do an immediate sign and trade No, BYC rules also apply to sign and trade deals. See: http://www.members.home.net/lmcoon/salarycap.htm#63 it states: "One complication with sign-and-trade deals is that the signed player can immediately become a BYC player (see question number 57 for more information on BYC), so it's the player's BYC value that must be used when determining whether the trade is allowed. " I believe that the only difference between a sign and trade deal and a normal trade is that there's a clause placed in the players contract that says he must be traded within 48 hours or the contract is voided. the Suns pulled off pretty much a dollar for dollar trade for Penny Hardaway in a sign and trade right? Even after signing Hardaway to a new deal, Orlando was under the cap, so BYC rules didn't apply to Hardaway. heypartner, I mean, someone tell me how we got Pippen if we didn't get to claim the exception. I'm not exactly clear on your point/question here. See if this explanation clears things up: Chicago did indeed sign Pippen using full Bird rights. The difference there was that Chicago was under the cap (even after signing Pippen), so Pippen wasn't a BYC player. If Chicago had been over the cap after they signed Pippen, then he would have become a BYC player and Chicago would only have been able to take back 50% of his new salary in return. Of course, that still wouldn't have affected that deal, because Chicago would have been allowed to trade down (since all they got back was Roy Rogers) and Houston could absorb Pippen's salary under the cap. Because of that the 15% rule wouldn't have been applicable anyway. As for McGrady, the article is correct. If Toronto signs McGrady for $9M, then he immediately becomes a BYC player and they can only get $4.5M in return for him. That means that the team that McGrady get traded to will be giving up $4.5M in salary and receiving $9M in return. That team has to either have cap room or an exception available to make up that difference in order for the deal to be legal. ------------------ [This message has been edited by aelliott (edited June 13, 2000).] [This message has been edited by aelliott (edited June 13, 2000).] [This message has been edited by aelliott (edited June 13, 2000).]
damn, am I really going to clear 2000 posts in a capology thread. Aelliott, look more in the FAQ. A sign-n-trade is "one atomic transaction", which I take as meaning the receiving team uses a Bird Exception as if it were their player to begin with. They can go up in salary because of that. Thus, no BYC issues for the receiving team. Only the Toronto GM has a problem IMO. If he wants compensation back for losing McGrady, that compensation is limited by the BYC salary base. IMO: The writer is wrong about the receiving team needing cap space. ugh.
The Scottie Pippen transaction makes sense as the Rockets had cap space to absorb any type of BYC complication, but how did the Suns make the sign and trade deal for Penny Hardaway? They effectively look on 9 mil of salary in Penny and gave up a similar amount in Danny Manning and Pat Garrity. ------------------ Check out the Best Source for Draft Info Draftsource.net
heypartner, My definition of "one atomic transaction" is that both sides of the deal must be completed or the deal is void. In other words, if you first do the sign portion, then you don't do the trade portion that voids the deal. Same idea as a database trasaction (for the programmer folks out there). If they're part of the same transaction, then they all succeed or they all fail. You're correct that BYC only directly affects Toronto, but if the team that receives McGrady is over the cap, then they have to give up salaries within 15% of McGradys. For arguments sake, let's say it's Miami. Since Toronto can only get $4.5M in return, Miami would have given up $4.5M in contracts and received $9M in return. Since Miami is over the cap, the 15% rule applies here. The only way for a team, over the cap to make up this difference is to get a third team with cap space involved or use a trade exception. conrats on post #2000. ------------------
MManal, Sorry, I forgot to include the Hardaway issue in my previous post. I've gone back and added it. In short, Orlando was still under the cap even after they resigned Hardaway. Because of this Hardaway wasn't a BYC player. Basically this article is mostly correct. Looks like the writer is just talking in general. He definetly left out the possibility of a 3 way or a trade exception. ------------------
aelliott -- So theoretically (and by no means am I saying this is a deal either party has discussed, liked or found beneficial) the Raptors could sign McGrady to a max deal ($9 million) and be traded to the Rockets for say the 9th pick in the draft (no financial trade value) and the $4.4 million exception (within 15% of McGrady's $4.5 million cap value) ? Anyhow, I probably run the risk of posts going all over the web of "Clutchcity.net says McGrady for 9th pick!" ... but just wanted to know if something like that could actually work. ------------------ NOTHING BUT .NET CLUTCHCITY.NET
NIKE, You're correct, I forgot to include the BYC or McGrady. So, that deal wouldn't be doable. ------------------
