Ins and Outs of Draft Time Trades

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Ins and Outs of Draft Time Trades

Postby rlee » Sat Jun 09, 2012 7:00 pm

The Ins and Outs of Draft Time Trades

Posted By Jason Fleming On June 9, 2012
Hoopsworld.com

As the days slowly march toward the June 28th NBA Draft, the rumor mill is starting to ramp up. The prospect of trades, perhaps even more so than potential draft choices and who plays (and wins) the 2012 NBA Finals, is a topic that will dominate the conversation for the next three weeks.

While the talk of prospective trades will be prevalent, there are still a few things to keep in mind. Here’s a primer on the ins and outs of making trades this time of year.

Teams Can Make Trades Now

A team is free to make trades as soon as their season is over. The 14 lottery teams could make trades after the end of the regular season. Eight more joined them when the first round of the playoffs came to a close. The San Antonio Spurs became the 27th team eligible to make a trade last week and come Saturday either the Miami HEAT or the Boston Celtics will join them. Generally it’s frowned upon to consummate a trade before the end of the Finals, but it does happen. Teams can then make trades up to, during and after the draft, through the end of June. After that, trades cannot happen again until free agency begins.

Quite a Few Players Can’t Be Traded

Anyone on this list – i.e., any player who can become a free agent in 2012 – cannot be traded. The collective bargaining agreement (this is not new with the 2011 version) prohibits trading players who will become free agents after the February trade deadline.

This includes players with options for 2012-13. A player with a Player Option cannot be traded before the end of June UNLESS he invokes the option to stay under contract. A player with a Team Option cannot be traded before the end of June UNLESS the team invokes the option to keep him. A player with an Early Termination Option can only be traded before the end of June if he formally indicates he will not invoke the option. Yes, all these options must be decided upon by June 30th, so there is a time frame when any of these players could be moved between now and then.

The Non-Guaranteed Path

There is a tiny bit of a loophole here, depending on how one interprets it. Contracts that have partial guarantees for the next season – or none at all – can still be traded just like any other contract. Examples of this include Lamar Odom in Dallas, whose 2012-13 $8.2 million contract is only guaranteed for $2.4 million if waived by June 29th.

Chicago also could pull a major move by trading the combined contracts of Kyle Korver, Ronnie Brewer and C.J. Watson ($13.1 million in 2011-12 and only guaranteed for $500k of $12.6 million in 2012-13) to a team looking to cut a large contract.

It’s Difficult to Trade a Draft Pick for a Player

We hear this all the time. “Well, why don’t they trade Player X for a first-round pick?” The short answer is they probably can’t. Trades this time of year are based on team salary totals for the 2011-12 season. As you can see from the link, very few teams have enough cap space (under $58.044 million) to absorb a contract in exchange for a draft pick. Here’s the short list (team + dollars under the cap):

Sacramento Kings – $11,186,472
Toronto Raptors – $10,185,875
Indiana Pacers – $6,197,107
Cleveland Cavaliers – $4,574,616
Minnesota Timberwolves – $1,199,661
Brooklyn Nets – $844,665

The Charlotte Bobcats and Utah Jazz are technically under the cap, but not far enough to even absorb an actual minimum salary ($473,604). There are players who make more than the minimum but less than the amount of space the Nets have, but not many. Teams can always trade a draft pick for a minimum salary player, though it’s typically not done because picks carry more value than that.

So, when constructing possible trade scenarios for picks, keep this in mind. If the player in question is going to another team than the six listed above or he makes more than the space listed, another player has to go the other way. Remember, draft picks hold no dollar value in trade. (Check out questions #50 and #84 of the NBA Salary Cap FAQ for more details.)

Ah – Don’t Forget the TPE!

Certainly. Teams that hold Traded Player Exceptions can also absorb a player in trade, even if they are over the cap, provided they are not a tax payer. Remember the rules on a TPE: it cannot be combined with a player or another exception, and the player it acquires must be for equal or lesser value (not the 150% value used when calculating player trades). They can’t be used to acquire a draft pick.

Here are the current active TPEs:

Brooklyn Nets (2): $3,000,000; $1,389,000
Charlotte Bobcats: $3,500,000
Cleveland Cavaliers: $1,097,520
Dallas Mavericks (3): $4,207,838; $3,059,000; $2,180,443
Denver Nuggets: $13,000,000
Golden State Warriors: $3,294,960
L.A. Clippers (2): $2,755,560; $1,223,166
L.A. Lakers (3): $8,900,000; $854,389; $544,240
Memphis Grizzlies: $1,184,750
Milwaukee Bucks: $2,506,500
New Orleans Hornets: $2,329,805
Oklahoma City Thunder: $1,288,200
Orlando Magic: $4,250,000
Philadelphia 76ers: $1,536,505
Portland Trail Blazers: $1,246,680
San Antonio Spurs (2): $854,389; $854,389
Toronto Raptors: $7,600,000
Utah Jazz: $10,890,000

Listening to the rumor mill, one might conclude only the Lakers had a TPE big enough to be really useful, but as the list makes clear that’s not true. It’s also worth noting some of these TPEs were created at last year’s NBA Draft; they expire one year from the time they are created if not used, so some of these may go away. (Last year’s draft was on June 23rd.)

***

Plenty of trades will happen before the end of the month, but hopefully these explanations help to illustrate why some trade ideas can or cannot be done.


(Note: I am assuming the accuracy of the above story. However as far as I know it has not been reviewed by Larry Coon)
rlee
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