Trade exceptions are fairly complicated, so I hope I'm explaining this correctly. For the purposes of clarity (for my sake as well as yours), I will overly simplify this explanation. A TRADE EXCEPTION is a credit generated when a team trades away a single player. Contrary to popular belief, multi-player trades (i.e., where a team trades away multiple players) cannot generate trade exceptions, although oftentimes teams technically configure such deals a multiple single-player trades. These exceptions are good for one year from the date of the initial trade that generated them. As a little background, most trades in the NBA are accomplished by using what is officially known as the Traded Player Exception. This is what is meant when you hear that a team can only get back 125% plus $100k of the salary it trades away. This is usually the only way that teams over the salary cap can make trades. However, a trade exception can be generated when a team trades a single player and takes back less than 100% plus 100k. Note that this is a different calculation than for the Traded Player Exception to trades. This exception can be used to complete a "non-simultaneous trade" within one year of its acquisition. The team holding the trade exception can use it in a trade with any team, not just the one with which it made the initial trade. So, if Team A (over the salary cap) trades a $10M player to Team B (significantly under the salary cap) in exchange for a $5M player, this trade will generate a $5.1M trade exception for Team A. Because Team A can take back as much as 100% plus 100k of the $10M salary it gave up in a non-simultaneous trade (for a total of $10.1M), and since Team A has already taken back $5M from the initial trade, this leaves $5.1M that Team A can use in trades over the course of the next one year. Trade exceptions cannot be offered to free agents, and they cannot be combined with player salaries in exchange for a higher salaried player. Hope this helps. Again, Larry Coon's FAQ website has all this and more.
Nope. Even if you cut a player, to the extent that player's contract is guaranteed, you have to pay the player that guaranteed amount AND the guaranteed amount counts against the salary cap AND the guaranteed amount counts against the luxury tax. This is why, even if he is better than Novak in training camp, Mike Harris (for the second year in a row) is the most likely guy to get cut, since he is the only player under contract with a fully UNguaranteed salary. There is no "money". The trade exception is simply the RIGHT to acquire more salary. If the exception expires, it just means that the team's right to take on that extra salary goes away.
What happens if the Rox buy out Justin Reed's contract? Does the $1.5 mil come off the books and/or off the luxury tax calculation? Would the Rox save money, (not pay as much luxury tax) if they bouthy him out? Thanks
Buyouts only serve to reduce the amount in actual dollars that a team has to pay a player who negotiates the buyout of his contract. These buyouts have no effect whatsoever on a team's salary cap or luxury tax. The player's original designated salary for each year of his contract counts fully against both.
If you cut a player with a guaranteed contract and if a week or month some other team picks him up does the salary they pay him come off of our cap? Again thanks for your answers!
Released/waived players with guaranteed contracts continue to be included in their former team's payroll. Players whose contracts are not guaranteed are included in team salary in the amount they made while they were with the team. Players on non-guaranteed "summer contracts" are not included in team salary unless they make the regular season roster. If another team signs a released player who had a guaranteed contract (as long as the player has cleared waivers), the player's original team is allowed to reduce the amount of money they still owe the player (and lower their team payroll) by the right of set-off. Note that this is true if the player signs with any professional team — it does not even have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran (if the player is a rookie, then the rookie minimum is used instead).
The thing is guys that the Lux tax penalty is not enforced until late in the year, so you can be over the cap most of the year, then shed some assets to squeak under it and not pay Lux tax. I believe that is exactly what the Rockets did by dumping Kirk Snyder last year..... So it does give the team time to mess around and see whom they should keep and whom they should get rid of..... DD
I think you're wrong on this one. The Coon CBA Faq clearly states that buyouts will hit the salary cap at the buyout amount, and not the original contract figure: http://members.cox.net/lmcoon/salarycap.htm#60
