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15% trade bonus

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Post#1 15% trade bonus
Tue Jan 15, 2013 6:12 am by Garf

At least Chris Bosh, LeBron James, Dwyane Wade, Mike Miller, and Udonis Haslem have one. Imagine one of them gets traded today.

1) Does the old or the new salary apply for the trade machine check? (I suspect old.)
2) Do I bump all future years by 15% too? (I suspect so.)

Cheers!

PS
I'm asking because it has just happened in a fantasy league I run: http://www.profsl.com/smf/index.php?topic=82541
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Post#2 Re: 15% trade bonus
Tue Jan 15, 2013 6:26 pm by DBoys

Answers to all your questions and more:
http://www.cbafaq.com/salarycap.htm
95, 96
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Post#3 Re: 15% trade bonus
Wed Jan 16, 2013 3:18 am by Garf

My bad, sorry!
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Post#4 Re: 15% trade bonus
Wed Jan 16, 2013 4:36 am by Garf

OK, so I think I understood that outgoing salaries count without the kicker, ingoing salaries with it. Also, the trade kicker is 15% of the remaining contract value including ETO years, but split equally over the remaining years excluding ETO, and reduced automatically if I hit the max salary.

However, there are still a couple of things concerning the latter I don't understand from Coon's explanation. He says:

"A player's salary added to his trade bonus cannot exceed the maximum for that season (based on years of service). For example, in 2011-12 the maximum salary for a player with 7-9 years of service is $15,506,632. If such a player has a $15 million salary and a $1 million trade bonus, then his trade bonus is pared down to $506,632 when he is traded. This happens automatically -- the player has no say in the matter."

Following up on Chris Bosh. So his salaries are: 17545000 19067500 20590000 (ETO) 22112500 (ETO)

For simplicity, we're trading him exactly in the middle of 2012/13, so I'll halve year 1 salary. 15% of 70542500 is 10581375. As in, a lot. Now I'm guessing I should attempt to allocate 1/3 of that to 2012/13 and 2/3 to 2013/14.

The max salary for 2013/14 is unknown. If it stays the same ($19,136,250), Bosh would get peanuts. (And if this is true, does it affect the 2012/13 bonus too?)

Or should I only take year 1 into account, the way they do when signing new contracts? In this case I'd try to add 1/3 of the bonus (3527125) to this year's salary. I'd hit the max salary again, so the max bonus would be 19136250-17545000=1591250. If this still is 1/3 of the total bonus, the bonus shrinks to 6.767%: 1591250 now and double that amount next season. Correct?
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Post#5 Re: 15% trade bonus
Fri Jan 18, 2013 6:28 pm by answerthink

Bosh has completed just nine years of service. The max salary for such a player is $16,402,500. Bosh is earning $17,545,000. Therefore, if he were to be traded this season, he would not receive a trade bonus.

There are a couple other things you might want to take note of for future reference though…

Option years are not counted when determining the remaining value of the contract. Since Bosh’s last season is a player option, it wouldn’t be part of the calculation of the trade bonus.

The value of a trade bonus is applied to team salary among the remaining years of the contract (excluding non-guaranteed years and years following an Option or ETO) in proportion to the percentage of salary in each of those seasons that is guaranteed. Since Bosh’s contract is fully guaranteed and the final two seasons are subject to an ETO and player option, respectively, if a trade bonus were possible in the case of Bosh, it would be applied equally across this and next season only.

When applying the maximum salary rules to the trade bonus, only the current season is contemplated.

Hope this helps!
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Post#6 Re: 15% trade bonus
Sat Jan 19, 2013 2:44 am by Garf

Thanks for chipping in!
It's interesting, because I interpreted a couple of things differently!

answerthink wrote:Bosh has completed just nine years of service. The max salary for such a player is $16,402,500. Bosh is earning $17,545,000. Therefore, if he were to be traded this season, he would not receive a trade bonus.


It's a mid-season trade, Bosh was drafted in 2003, and CBAFAQ #16 says it's 10:
"A player is credited with a year of service for each season in which he is on a team's active list or inactive list for at least one day during the regular season"

answerthink wrote:Bosh has completed just nine years of service. The max salary for such a player is $16,402,500. Bosh is earning $17,545,000. Therefore, if he were to be traded this season, he would not receive a trade bonus.

There are a couple other things you might want to take note of for future reference though…

Option years are not counted when determining the remaining value of the contract. Since Bosh’s last season is a player option, it wouldn’t be part of the calculation of the trade bonus.


But apparently ETO's are. CBAFAQ #95:
"Option years are not counted when determining the remaining value of the contract, unless already exercised. ETOs are counted."

answerthink wrote:it would be applied equally across this and next season only.


This is the one I'm the least certain about, but CBAFAQ #96 does say:
"the bonus pro-rates during the season, so these amounts are exact only at the start of each season"
That's why I instinctively wanted to allocate 1/3 this season and 2/3 next season.
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Post#7 Re: 15% trade bonus
Sat Jan 19, 2013 12:33 pm by answerthink

Years of service for each season aren’t credited until June 30. Therefore, Bosh currently has nine.

It might be helpful for you to separate the concept of calculating the value of the trade bonus from the concept of allocating the trade bonus to team salary for salary cap purposes.

For calculating the value of the trade bonus, you need to know the remaining value of the contract. If a player is traded mid-season, his salary is pro-rated down to reflect the fact that a portion of the season is no longer part of the remaining value of the contract. Also, option years are not counted when determining the remaining value of the contract, unless already exercised. ETOs are counted. Therefore, Bosh’s last season, which is subject to a player option, does not count. The season prior, which is subject only to an ETO, does count.

For allocating the trade bonus, the allocation is not proportionate to the salary itself, but rather to how much of the salary is guaranteed. Years following an option or ETO are not counted. Since Bosh’s contract is fully guaranteed and the final two seasons are subject to an ETO and player option, respectively, if a trade bonus were possible in the case of Bosh, it would be applied equally across this and next season only.
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Post#8 Re: 15% trade bonus
Wed Jan 23, 2013 12:55 pm by Garf

answerthink wrote:Years of service for each season aren’t credited until June 30. Therefore, Bosh currently has nine.


Indeed, I missed it in http://www.cbafaq.com/salarycap.htm#Q115

Huge thanks for your help!
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