Trade Exception Question ?

Just to add another question, if we trade the TE to another team, does that extend the expiration date for them or will it still expire on the same date? What is that date?

 

If we can trade the TE, then it will expire on the same date as it would have for us. I just wonder (my own question) if the TE is a tradeable commodity. It was a big discussion a couple years ago on the board, when we had a 4.5 mil exception, and I think we agreed that it could be traded; but I don't know if we ever actually found the rule in writing.

The TE doesn't make any difference for trading draft picks. When picks are traded, they count as nothing cap-wise. But whatever team has the pick must count it against the salary cap at half the value of that pick's first-year salary. For example, if the #1 pick makes 3.5 mil his first year, it would count as 1.75 mil toward the cap of whatever team had it.

I'm going by memory here, so bear with me. Aelliott or Sherlock needs to step in and shoot me down if I'm wrong.

 

It is technically a tradeable commodity, because the TE is created ANY time a team takes on less salary than they are giving out in a trade, and it lasts for 1 year after the trade went down. That's why you'll often see some teams that have a 1 or 2 million dollar TE lying around.

 

Technically, you there's no such thing as a trade exception. Really, it's what's called a "non-simultaneous" trade. That just means that if 1) you're trading only a single player and 2) You're taking back less than 85% of what you sent out, then you have up to a year to "complete" the trade. The easiest way to think of it is as an exception,hence the term "trade exception".

You certainly can use the exception to trade for a player. i.e. 1st or 2nd round pick for Butler.

In the case of Butler, Miami would be trading a single player and they're taking back zero salary (draft picks count $0 for trades). So, they would have 1 year from that date to complete "the non-simultaneous trade". In other words, they'd have a trade exception for the amount of Butler's salary.


Here's an example that might help:

1) Rockets signed and traded Olajuwon to Toronto for draft picks. Olajuwon was signed for a starting salary of about $5M. The draft picks count $0 in a trade, so the net result is that we sent out $5M in salary and took back nothing. Toronto had enough cap space to cover the additional salary they were adding so the deal worked from their end. Since we only traded a single player and we took back less money, then we're eligbile to do a "non-simultaneous trade" (we got a trade exception for $5M).

2) 8 months later, we signed and traded Shandon Anderson ($4.7M) to the Knicks for Glen Rice ($9M). Normally, that gap in salaries wouldn't work (salaries have to be within 15% + $100K),but we used the trade exception to cover the difference in salaries.


What actually occurred was a "non-simultaneous" trade. The trade wasn't completed for 8 months, and the end result was that we traded Olajuwon and Anderson for Rice.

Does that make sense?

 

aelliott:

I know this is off-topic, but what was the consensus in the discussion a couple of days ago about when Steve loses his BYC status? I remember someone mentioning that because this year was a leap year, Francis loses his BYC status on June 30th, not July 1st.

Thoughts?

 

July 1st is the first day that he's not BYC. Of course, the catch is that the NBA July Morotorium doesn't allow trades until July 17th.
So, to anwer your question July 1 he's not BYC, but he couldn't be traded without BYC implications until July 17th.

 

So, if the Rockets use this exception before it expires, they will have traded Glen Rice for Ameachi, a pick, and whoever we get in the trade. If we don't use it, do we just eat that money? I guess since Utah is paying Rice's salary, we don't really lose anything, its just an opportunity to bring in another salary without a cap hit?

 

Thanks!!!