Boston Celtics Could Leverage Trade Exceptions As Valuable Assets

http://www.celticsblog.com/2015/6/1/8701207/boston-celtics-could-leverage-trade-exceptions-as-valuable-assets



Boston Celtics could leverage trade exceptions as valuable assets
By Sean Penney  @spenney83 on Jun 1, 2015, 5:50p 26







Winslow Townson-USA TODAY Sports
Don't forget about these exceptions when dreaming of trade scenarios.


One of the more overlooked assets that teams can acquire while wheeling and dealing is a trade exception. There are salary cap exceptions that teams can use to acquire players whose salaries are no greater than the amount of the exception plus $100,000.

So if a team is over the cap and wants to trade for a player without having to send back equal salary, no problem! As long as they have a trade exception large enough to swallow the incoming player's salary. The Boston Celtics used some of these exceptions already this season to facilitate mid-season acquisitions of key contributors such as Jae Crowder and Jonas Jerebko.

Trade exceptions expire after one year and can't be combined with other exceptions (including other exception types, such as the mid-level exception). The Celtics have over $25 million worth of trade exceptions, but that does not mean they can trade for a $25 million per year player without sending any salary out in return. In fact, most of Boston's trade exceptions are either partially used already or for such insignificant amounts that they likely won't ever be used.

Here's a breakdown of the trade exceptions that Boston currently has available, courtesy of HoopsRumors.com, categorized by their value and how conceivable it is that they could be used. This list indicates the amount available for each exception, how it was obtained, when it expires and how a portion was already spent for those that are partially used.


Insignificant

(These exceptions are partially used and therefore don't amount to enough to be realistically used)

Amount: $285,816
Obtained: Keith Bogans (Cavaliers)
Initial Amount: $5,285,816
Used: Brandan Wright ($5,000,000)
Expires: 9/25/15

Amount: $152,757
Obtained: Joel Anthony (Pistons)
Initial Amount: $3,800,000
Used: Jameer Nelson ($2,732,000), Jae Crowder ($915,243)
Expires: 10/17/15

Amount: $500,000
Obtained: Brandan Wright (Suns)
Initial Amount: $5,000,000
Used: Jonas Jerebko ($4,500,000)
Expires: 1/19/16


Low Value

(These exceptions could be used to acquire players on contracts close to the league minimum or prorated deals made mid-season)

Amount: $507,336
Obtained: Dwight Powell (Mavericks)
Expires: 12/18/15

Amount: $625,280
Obtained: Jameer Nelson (Nuggets)
Expires: 1/13/16

Amount: $689,840
Obtained: Austin Rivers (Clippers)
Initial Amount: $2,439,840
Used: Gigi Detome ($1,750,000)
Expires: 1/15/16

Amount: $1,334,092
Obtained: Kris Humphries (Wizards)
Initial Amount: $4,250,000
Used: Will Bynum ($2,915,908)
Expires: 7/19/15

Amount: $1,336,394
Obtained: Marcus Thornton (Suns)
Expires: 2/19/16


Enticing Value

(These exceptions could be used to potentially acquire a valuable veteran)

Amount: $7,707,865
Obtained: Tayshaun Prince (Pistons)
Expires: 2/19/16

Amount: $12,909,090
Obtained: Rajon Rondo (Mavericks)
Expires: 12/18/15


Summary

These options are a bit less appealing than the $25 million total we started with, but there are still some very useful assets here. Most of these trade exceptions will go to waste, while others could potentially be used to pick up pieces off the scrap heap mid-season.

The most interesting exceptions to keep an eye on are the ones created from the Rondo and Prince trades. The $12.9 million exception from the Rondo trade expires well before the deadline, so if the Celtics intend to use it then they should explore options to fill that exception this offseason. Once the season begins, there may not be many options available in mid-December that would help Boston upgrade its roster considering most teams won't have ruled themselves out of the hunt that early.

Boston has a bundle of future draft picks, including potentially four first-round draft picks in 2016. A team out of contention that is looking to shed some payroll (perhaps in an effort to avoid the luxury tax) may offer a veteran in exchange for one of those picks, while Boston could use one of those exceptions to take on their salary without having to surrender a player in return.

Trade exceptions go unused all the time, but Danny Ainge has done a masterful job of turning them into assets. He has made some trades that seem insignificant at first glance, but ended up creating a trade exception that was later put to good use. We saw how Boston was able to restructure their roster on the fly last season by acquiring role players that ended up making an impact.

The Celtics already have a lot of options available to them this summer as they look to add talent to their roster, but these trade exceptions serve as a way to open up even more options.




bob
MY NOTE:  With all the wheeling-and-dealing Trader Danny did last year it was hard to keep up with all the TPEs that were created, exchanged and combined.  Danny's strategy hinges heavily upon being as "liquid" as possible.  No long term unless he's convinced he wants the player (e.g. Avery Bradley), tons of draft picks (which are assets that do not impact the salary cap until used) and Traded Player Exceptions (TPEs) which are grease for the wheels of deals.  It will take a few more years before we see if this approach works (the Nets' 2016 and 2018 picks may be as valuable as gold) or if Sam Hinkie's "let's see how badly we can suck for 5 years" strategy works.  Needless to say, I am NOT a fan of Hinkie's approach and hope the Sixers never take off, if for no other reason than it will deter future tankers.


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nice catch Bob,

the breakdown of those TPE's is worth the price of admission. first time I've seen an updated one.

I forget, can we combine a TPE with a draft pick for a player?

kdp59 wrote:nice catch Bob,

the breakdown of those TPE's is worth the price of admission. first time I've seen an updated one.

I forget, can we combine a TPE with a draft pick for a player?

kdp59

I hope below link helps. Paragraphs 2 and 3 should do the trick.


initial trade cannot aggregate the player in a subsequent trade if it went over the cap in the meantime. Neither of these is true. All that matters is whether the player was acquired with an exception or with cap room.


" 85. What is a non-simultaneous trade?

In some cases, teams have up to one year to acquire the replacement player(s) to complete a trade. These trades are considered non-simultaneous. In a non-simultaneous trade, a team can acquire only up to 100% plus $100,000 of the outgoing salary1 (as opposed to a higher amount in a simultaneous trade). A trade in which salaries are aggregated (see question number 84) cannot be non-simultaneous.

Here is an example of a non-simultaneous trade: a team trades away a $2 million player for a $1 million player. Sometime in the next year, they trade a draft pick (with zero trade value itself) for a $1.1 million player to complete the earlier trade. They ended up acquiring $2.1 million in salary for their $2 million player -- they just didn't do it all at once, or even necessarily with the same trading partner.

In the above example, following the initial trade of the $2 million player for the $1 million player, it was like the team had a $1 million "credit" which was good for one year2, with which they could acquire salaries without having to send out salaries to match. As with simultaneous trades, teams are allowed to acquire an extra $100,000 -- so a $1 million credit can be used to acquire $1.1 million in salaries. This credit is often referred to as a Traded Player exception or a trade exception, but be aware that the CBA uses the name "Traded Player exception" to refer to the entire exception which allows teams to make trades above the salary cap (including both simultaneous and non-simultaneous trades). In this document "Traded Player exception" is used to refer to the exception, and "trade exception" is used to refer to the one-year credit.

There are several common misconceptions about trade exceptions and non-simultaneous trades:
•Teams cannot use trade exceptions to sign free agents; they can be used only to acquire existing contracts from other teams. However, a team can acquire a free agent using a trade exception if he is signed by his prior team and traded in a sign-and-trade transaction (see question number 91).
•Trade exceptions are not traded from one team to another. Sometimes it appears like this is happening when one team uses a trade exception to acquire salary without sending salary away, and the other team gains a trade exception in the same process because they sent away salary without receiving salary in return. However, the trade exception the first team uses and the trade exception the second team gains are two distinct exceptions.
•Teams cannot combine trade exceptions with other exceptions (such as the Non-Taxpayer Mid-Level exception or a taxpaying team's 125% plus $100,000 margin from another simultaneous trade) in order to trade for a more expensive player. For example, a taxpaying team with a $1 million trade exception cannot combine it with their $2 million player to trade for a $3 million player (see question number 88 for more information on combining exceptions).
•A common misconception is that players cannot be traded together in a non-simultaneous trade. This is not true -- players can be traded together as long as the outgoing salaries are not aggregated. For example, trading two $10 million players for a $20 million player requires aggregation, and therefore must be simultaneous. But trading two $10 million players for a $12 million player can be accomplished without aggregation -- one of the $10 million players would be used to acquire the $12 million player in a simultaneous trade, and the other $10 million player would be traded for "nothing," in a non-simultaneous trade, gaining the team a $10 million trade exception.

Here is a more complicated example of a legal non-simultaneous trade: Team A is a taxpaying team with a $4 million trade exception from a previous trade, and a $10 million player it currently wants to trade. Team B has three players making $4 million, $5 million and $7 million, and the two teams want to complete a three-for-one trade with these players. This trade is legal -- the $5 million and $7 million players together make less than the 125% plus $100,000 allowed for the $10 million player ($12.6 million), and the $4 million player fits within the $4 million trade exception. So the $4 million player actually completes the previous, non-simultaneous trade, so Team A is left trading its $10 million player for Team B's $5 million and $7 million players in a separate, simultaneous trade. From Team B's perspective there is also a simultaneous and a non-simultaneous trade -- it aggregates its $4 million and $5 million players to acquire Team A's $10 million player in a simultaneous trade, and it sends the $7 million player to Team A for "nothing" in a separate, non-simultaneous trade, thereby receiving a $7 million trade exception.

Teams can consume only part of a trade exception, in which case they can still use the remainder in a future trade. For example, if a team trades a $4 million player for a $2 million player, they gain a $2 million trade exception. If they later trade a draft pick for a $1 million player, they still have $1 million left over to acquire more players and complete the earlier trade (until one year from the date of the original trade).

Teams that are under the cap when initiating a trade cannot receive a trade exception, even if they end up over the cap as a result of the trade. "

swish

Is there a simpler way?  Very, very confusing to this old boy.  Actually, it would have been very confusing even when I was much younger.

This type of stuff is why Ainge and his assistants get paid so well.

I will never make a comment about anyone else not fully understanding this stuff, but I do hope that Ainge uses our trade exceptions wisely this summer.

I remember taking exception to the trades that netted the Celtics Curtis Rowe and Sidney Wicks.

Sam

P.S. How's this as a candidate for the worst trade ever?

Paul Silas for Curtis Rowe

wide clyde

I try to have a basic understanding of the nba contract but often times fail miserably. Its not the easiest subject to follow, and even when I fully comprehend, I often times have forgotten the answer within a week. They say that short term memory tends to diminish with age. At 83 years of age I can vouch for that.

swish