Kyler: The Traded Player Exception

[Hotshot Hower]

http://www.hoopsworld.com/Story.asp?story_id=10274

Yesterday there was some disagreement about how the "mechanics" of the Traded Player Exception works, and rather than debate this endlessly, I figured it best to head right to the source, Larry Coon.

Larry has for several years been the foremost experts on the NBA Collective Bargaining Agreement, and operates the "bible" of the CBA, The Larry Coon FAQ.

Now, my assertion was that the Orlando Magic, by way of their Traded Player Exception (TPE), gained when they signed and traded Keyon Dooling to the New Jersey Nets, and gives them the ability to package it and a player, and return a larger player. For the purpose of this discussion we're talking about J.J. Redick.

The Magic can indeed return $5.4 million, just not with one player.

"Think about it like this -- it's the way the league actually does it," according to Larry. "You want to use J.J.'s salary and the existing TPE. The first thing you do is convert JJ's salary into a new TPE. If the trade is completed right away, they use $2.1 million * 1.25, or $2.625 million."

"So now they have two TPEs to use: one for $2.625 million (JJ), and the other for $3.3 million (existing TPE). Start fitting incoming players into those two slots."

"You can never add those two slots together. So if an incoming player makes $2.625 million or less, he can go in either slot. If me makes between $2.625 million and $3.3 million he can only go into the $3.3 million slot. If he makes more than $3.3 million then you can't trade for him. So some legal trades are:

-- For a player making $2.5 million and a player making $3 million.
-- For two players making $1.5 million each, and a player making $2.5 million.

[Optimus_Steel]

LOL I am still confused.

[Hotshot Hower]

with wilks out (if serious), there just has to be something out there getting materialized for a PG and a F... (hence, Redick/TPE for A player/B player)

on the orlando magic message board, there was a rumor floating around that orlando is showcasing both Bogans, Redick, and Cook to Charlotte because I assume there willing to let go of one of there BIGS...

[Big A All Day]

LOL I am still confused.

[Optimus_Steel]

LOL I am still confused.

Sad thing is that I was a finance major lol.

[Big A All Day]

LOL I am still confused.

Sad thing is that I was a finance major lol.

X's 2

[Devin 1L]

Heh.

I spent yesterday telling him how he was wrong and having him continue to say he was right (and even that Larry Coon was wrong), only to finally go to Larry Coon himself, and find out that...he was wrong. I'm "...", by the way.

posted by Steve Kyler, 15 October 2008 9:26:21 AM
Consulting your sourcing, because a traded player exception can absolutely be added to the value of another player... In the example above, JJ Redick makes $2.1 million. Using JJ and the $3.3 million traded player exception earned from Keyon Dooling, the Magic could return a player or group of players equaling up to $5.4 million.

posted by ..., 15 October 2008 9:49:12 AM
You cannot combine the TE and a player for another one player of greater value. Damn.

posted by Steve Kyler, 15 October 2008 11:22:29 AM
Again - I would urge you guys to check your sourcing on the Traded Player Exception... The TPE can not be combined together, but a player and TPE can be traded for a larger player. It has happened many times under this CBA... I would also urge you to check Larry Coon's CBA FAQ on this topic: http://members.cox.net/lmcoon/salarycap.htm#68 - and the Exception I am referring to is not the Medical exception from Tony Battie from last year - its the TPE earned in the sign and trade deal with Keyon Dooling and the Nets this summer.

posted by ..., 15 October 2008 12:00:55 PM
No, you can't. Provide a few of these many examples that you refer to.

posted by ..., 15 October 2008 1:22:03 PM
Wrong. Again, for those of you who think that the Magic can use JJ and the TE together to take back someone of a greater salary, please illustrate at least one example in which this has happened in the past. In your search, perhaps you will discover why you are wrong.

posted by Steve Kyler, 15 October 2008 5:19:07 PM
Guys - again, you are sourcing the right information... just not reading it... you can not take 2 TPE's and bundled them together, you also can not take a TPE and bundle it with a Median Exception... you can't take a TPE and try and sign a player with it... but you absolutely can, and by design, use a TPE to offset trade imbalances... If The Magic trade JJ Redick at $2.1 million, by owning $3.3 in TPE they can return up to $5.4 in excisting contracts... please read the entire sections again... what you can not do with TPE's is combine them with other exceptions, or use them to sign a player, they are only credit for off-setting EXISTING player contract inequities... eith on their own, or in combination with a player or group of players leaving.

posted by Steve Kyler, 15 October 2008 6:37:25 PM
You guys are zoning in on what appears to be a badly worded example, read the whole sentence without the parenthetical form: "teams cannot combine a Traded Player exception with other exceptions in order to trade for a more expensive player." - that's the rule... example given does not re-enforce the rule... the example should read: For example, a team with a $1 million Traded Player exception cannot combine it with their $2 million "traded" player exception to trade for a $3 million player... its not worded correctly.... The rule as explained to me by several GMs and two league sources, is that the Magic can absolutely trade JJ and his $2.1 million deal and return up to $5.4 million in combined salaries in return.

I like how he accuses Coon of being wrong, and then goes to him the very next day.

Also, this begs a few questions:

Is Steve Kyler lying about speaking with several GMs and two league sources?
Do several GMs and two league sources not know what the hell they are talking about?
Are several GMs and two league sources just messing with him? (lol)

posted by ..., 15 October 2008 7:07:14 PM
Man, you're still wrong, and then to say Coon is wrong, no less. Trading over the cap everything will be looked at as an exception, so you can't combine Redick and the TPE to take on something greater. And you're supposedly acting as some authority on this? Yeesh. For like the third time: You've stated that this has happened many times, so please provide a few of these examples. Then, I'll show you why you're wrong.

[mhectorgato]

Man ... giving it to him with both barrels. I wonder what type of butt whopping you'll be giving when you're 2L or 3L!!!

[N4U|Redux]

LOL I am still confused.

Sad thing is that I was a finance major lol.

We understand your UCF education doesn't mean much

[Optimus_Steel]

"Sad thing is that I was a finance major lol."

We understand your UCF education doesn't mean much

They didnt teach us about trade exceptions in our finance classes.

Do they even have a finance department at USF or they outsource that to India?

[Force9024]

(h) Traded Player Exception.

(1) Subject to the rules set forth in Section 6(k) below, a Team may, for a period of one year following the date of the trade of a Player Contract to another Team, replace the Traded Player with one (1) or more players acquired by assignment as follows:

(i) A Team may replace a Traded Player with one (1) or more Replacement Players whose Player Contracts are acquired simultaneously and whose post-assignment Salaries for the then-current Salary Cap Year, in the aggregate, are no more than an amount equal to 125% of the pre-trade Salary (or Base Year Compensation, if applicable) of the Traded Player, plus $100,000.

(ii) If a Team’s trade of a player and acquisition of one (1) or more Replacement Players do not occur simultaneously, then the post-assignment Salary or aggregate Salaries of the Replacement Player(s) for the Salary Cap Year in which the Replacement Player(s) are acquired may not exceed 100% of the pre-trade Salary (or Base Year Compensation, if applicable) of the Traded Player at the time the Traded Player’s Contract was traded, plus $100,000.

(iii) A Team may aggregate the pre-trade Salaries in two (2) or more Player Contracts for the purpose of acquiring in a simultaneous trade one (1) or more Replacement Players whose post-trade Salaries, in the aggregate, are no more than an amount equal to 125% of the pre-trade aggregated Salaries (or Base Year Compensations, if applicable) of the Traded Players, plus $100,000. Notwithstanding the preceding sentence, no Player Contract acquired pursuant to an Exception may give rise to an aggregated trade exception for a period of two (2) months from the date the Player Contract is acquired.

http://www.nbpa.org/cba_articles/article-VII_6.php

Basically from the looks of the bold print via the NBAPA (NBA Players Association), is they can package it together, as long as it happens simultaneously.. So we could ultimately "pretrade" the TPE and Redick or whoever to make 1 collective salary, and could trade that salary to another organization as long as the player we receive in return doesn't exceed 125% of the "pretrade salaries" + $100,000. Steve Kyler I believe was right in this one, as much as I hate to say it.. Either way as long as they happen simultaneously, trade Redick for say Joe Smith (who makes like 4.7 million or something), we can trade Redick for Smith and use the TPE to make up the difference in salary.. At least that's what I'm gathering..

[MitchellUK]

I love the fact that nowhere in that article does Kyler out-and-out say "I was wrong", and continues to present it that the TPE can be packaged with a player, when in fact it can't.

Simple fact, unless a team is in cost cutting mode, they will not just give you a player for a TPE. It is a one-sided deal. So to convince them to do that deal, a second trade, which is lopsided in their favour, needs to be completed. Basically what Orlando did with the Lakers last season. They didn't want to give us Cook for nothing (fair enough), so to get something of value in the trade, we sent them Ariza for a perceived inferior player in Evans.

So although it was presented as a single deal, it was not Cook+Evans for Ariza+TPE, but rather was Ariza for Evans + Cook for the injury exception, in two separate deals. Orlando wouldn't have accepted the Ariza portion on its own, and the Lakers would not have accepted the Cook deal on its own, but done simultaneously both teams deemed it acceptable.

It's all a little pedantic, but Kyler is still trying to pretend he is right, when in fact a TPE can only be used on its own, and traded for a single player of equal or lesser financial value. Other deals can be done at the same time to make the sum total of assets in:assets out agreeable to both dealing parties, but that is not what he is saying.

[DrunkOnMystery]

A lot of the confusion over this comes from beat writers and reporters saying a TPE is ever traded at all. It isn't. By nature, it can't be.

Think of the TPE as a check someone has written that the Magic have a year to cash. When the TPE is "traded" what's actually happening is the check is being cashed, and a new separate check is being written and sent to the other team. In other words, a new TPE is created for the use of the other team, and the Magic's TPE is used up to pay the incoming player.

[lovehoops01]

It's not that hard, folks. You can't combine a TPE with anything -- neither a player nor any type of exception. It just gives you more space to work with if you already are over the cap and need to deal for a player. It's why I'm not really big on trading for TPEs because the Magic rarely have used theirs, and many teams don't because it can be very difficult to made deal to acquire a player involving one.

To be honest, I thought the Magic made the deal more to help out Keyon since the Nets didn't have enough cash to sign him straight up and the Magic had his rights and weren't going to keep him from making more than they were offering since they weren't willing to offer more. He had worked hard for them so they helped him out. It didn't cost them anything to do it and if they need to sign or trade for a guy who is not making that much money but is making more than the minimum, it gives them a way to do it. It wouldn't surprise me at all if they didn't use -- though with the injury to Mike Wilks, they might need it now in order to gain an NBA caliber player at this late point before the start of the season.

[Bensational]

haha, Dev, you're a killer dude. do you come to these message boards just to practice your debating skills? that's the second time i've seen you completely serve someone up for dinner in the past 6 months. prior to that you seemed as mild mannered as an amish boy.

in all honesty, i don't understand why the CBA doesn't allow a team to combine the TPE and a player contract or other TPE. why is that rule even there? it seems it'd be more conducive to trades and player movement if GM's could combine those exceptions with players.