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It seems many people don't understand the whole Traded Player Exception concept, what it is, how you get it, etc... so here's an explanation, and what it might mean for the Raptors this summer.

1) A TPE is created when Team A sends more salary to Team B than they take back. The difference is like a credit that Team A can use later.

For example... Team A sends a player making $15 million to Team B for one player making $10 mil. Team A now "creates" a TPE of $5 million, that is valid for one year.

2) One team does not trade a TPE to another team. A TPE may be used and then another is created, but they don't actually trade the original one.

Say Team A uses their $5 mil TPE to make a deal 2 months later with Team C, where they trade a $2 mil player for a $3.5mil player. This deal would normally not be allowed, but Team A's exception allows them to absorb the $3.5 mil player for nothing, then trade the $2 mil player to the other team who now has a $3.5 mil exception from the other side of the deal. They are then left with a $1.5 mil TPE.

3) A team with $10 or $20 or $30 mil in capspace can sign players outright, or trade for them.

Say a $17 mil player is traded to a team for nothing but draft picks, the team that traded them creates a $17 mil TPE. The team with the $17 mil TPE can now use to to make another trade where they absorb as much as $17 mil more than they send out.

4) A TPE can be used to acquire players on existing contracts - so basically any signed player now becomes game if the TPE is large enough. A TPE can also be used to acquire a free agent, if the team they are coming from is willing to do a S&T. This means that every single player in the league can be acquired if the TPE is large enough.

The sending team and the player will usually be agreeable to a S&T for two reasons. 1) The player can often get a better contract in a S&T than they can by walking as a FA, and 2) the sending team generates a new TPE, rather than get nothing.

What does this mean for the Raptors?

Well, rather than make a bad deal to take back players because of the salary matching rules for NBA trades, BC will not be in the same position Babcock was in when he traded VC. In that deal, salaries had to match within 125% +100,000 - so guys like Aaron & Eric Williams and Alonzo Mourning had to come back the other way. Imagine if Carter could have been traded for just the 2 draft picks and a $15 mil TPE that could have been used to acquire other players!

So if Bosh settles on Miami or Chicago or NYK (seemingly the 3 most likely destinations), then the other team really has no leverage to dump bad players onto the Raptors, because they can absorb Bosh's full salary - no salary matching required. Even if there are weak draft picks or player rights sent to Toronto, it's still far better than having to take back a Beasley or Curry or Deng if BC thinks the TPE is more valuable - which it is.

If Toronto creates a TPE in the value of Bosh's new $17 mil salary (give or take), it essentially makes the Raptors a player for all the other FAs on the market as well, from Stoudamire to Johnson to Gay to Haywood. It turns the Raptors from sellers into big time buyers - if BC so chooses.

Further, it means the Raptors could absorb a rather large amount of salary belonging to players on existing contracts. This now opens up deals with teams looking to shed salary or simply players that overlap. Hello Chris Paul and Marvin Williams and Andre Iguodala.

Basically - it means that trading Bosh for nothing sounds a whole lot worse than it really is, if a TPE is the outcome of a lopsided deal that the other team appears to win. It will be up to BC to decide if rebuilding or retooling is in store - based on what players may become available - rather than be forced into a decision one way or the other. It gives the team a whole lot of options and because Bosh will be one of the first dominos after Lebron James, the Raptors can get a head start with discussions and maybe make a play for a FA they like that hasn't yet made a move.

It also means that there will be a cascading set of TPEs with every trade made, that will allow teams extreme flexibility that does not exist in a typical offseason. The teams losing/getting the big FAs will not be the only ones going into next season with significant changes. It's gonna be one helluva summer with way more rumors than usual.

** EDIT ** Fixed examples and made them more applicable to potential TO situation **

Actually this year more so than previous years a TPE would be good since there are many teams looking to shed salary ie: Washington, Philly, New Orleans, Golden State etc.

Great timing on the thread, Courtside.

I think the TPE will be very valuable for BC, especially if he wants to accelerate the rebuild. We've got one year to do something with it, from what I understand, so we could really change the look of the team with that trade exception within a short period of time.

Obviously, New Orleans has been talked about a ton with Collison, and most likely, Posey.

Atlanta is also interesting with Marv. Williams, and maybe, Bibby.

I like a potential Anthony Randolph deal with GS, but I have no doubt, that we're going to have to add a little to sweeten the pot in each scenario.

Also, can you elaborate on the TPE as it pertains to the current FA crop; how do we use the TPE to get a Rudy Gay, for example, as you highlighted in your explanation?

free agents are making their list of teams to go to now... BC should make it public that they are indeed buyers before all the good FA's set their sights elsewhere

So if no better deal comes up, can we trade Hedo to the Magic for VC's expiring and create a new TPE (based on Bosh's TPE) to make up the difference in salaries? The immediate salary relief might be enough for the Magic to bite on Hedo's long term deal. That would also leave us in great shape going into next summer.

Thanks for the explanation.
To clarify, is it the case that the Raps can get a TPE from teams like Miami and Chicago because they are under the tax, whereas they could not get one from, say, the Lakers because they are over the tax? That is, what are the conditions for the other team vis a vis generating a TPE for the Raps?
Thanks again.

Jouissance wrote:Thanks for the explanation.
To clarify, is it the case that the Raps can get a TPE from teams like Miami and Chicago because they are under the tax, whereas they could not get one from, say, the Lakers because they are over the tax? That is, what are the conditions for the other team vis a vis generating a TPE for the Raps?
Thanks again.

You are correct. Because these teams are so far under the cap that they can absorb the whole $17 mil, they can make very lopsided deals which by default, will create a TPE.

A team like LA or Houston is over the cap and any trade would have to adhere to salary matching rules that state the salaries from either team must match within 125% +$100K.

Both the Lakers and Rockets have assets the Raptors might want, but they might not want to take on the total amount of salary that has to come back - so the flexibility of a TPE is likely preferable.

TheBat wrote:So if no better deal comes up, can we trade Hedo to the Magic for VC's expiring and create a new TPE (based on Bosh's TPE) to make up the difference in salaries? The immediate salary relief might be enough for the Magic to bite on Hedo's long term deal. That would also leave us in great shape going into next summer.

In essence, yes. Hedo's smaller salary could be traded for a larger salary on a shorter or expiring deal. This would not be the first choice, but a possible way to grease the wheels for more flexibility to make deals later in the season when some teams might be more inclined, or to have that salary come off the books next summer - but next summer's FA class is fairly mediocre - so if BC does want to re-tool, trying to acquire players this year is better IMO.

If Hedo is traded for VC, for example, a new TPE would be created for Orlando - not for Toronto.

Thanks for this

A TPE for Okafor and Collison would be a great move

Ok would be an amazing vet for this team and leader for a young front court

and Collison setting up behind Jack would be ideal

McFurious1 wrote:Actually this year more so than previous years a TPE would be good since there are many teams looking to shed salary ie: Washington, Philly, New Orleans, Golden State etc.

Washington just took on Kirk Hinrich so I don't think they qualify.

I also kind of doubt this notion of how valuable it'll be. I can see teams missing out in free agency and competing to take on bad contracts + incentives so to say.

Thank you for this thread, it'll help a lot of posters here out. I've been preaching how important a TPE is since the trade deadline. That's why I like it better than a Houston package where we get NY's mystery pick (could be anywhere depending on NY's team next season), Jordan Hill (a bench player at best playing same position as Bargs/Davis/Amir) and useless expirings.

Here's a good scenario to see the value of the TPE.

Heat send/Raptors receive: Beasley (5 mil), 2 firsts (one is Toronto's returned), 12 million TPE
Heat receive/Raptors send: Chris Bosh (17 mil)

We acquire a prospect and 2 picks, and get that large TPE. There are so many teams looking to shed salary and create cap space that is so important THIS summer with the FA class. That 12 million TPE can be used to acquire a contract like Eddy Curry while getting incentive in doing so like Galinary and/or Chandler. This gives NY more cap space. Also the TPE can be broken down into many different deals, we don't need to use it all at once.

Let's re-route the TPE to New Orleans since they always want to save money and with Paul at the point Collison is expendable.

Raptors send/Hornets receive: 12 million TPE
Raptors receive/Hornets send: Collison (1.4 mil), Okafor (11 mil)

---------------------

In the end we've turned Chris Bosh, who's leaving as a UFA, into the 2008 #2 pick in Beasley, Darren Collison, Okafor and 2 first round picks. Posey/Songalia can be substituted for Okafor if Hornets don't like this offer.

That's the value of the TPE. The first step however is to get the owner's approval to use the TPE. Most TPE's expire and the team just keeps the savings.

pspot wrote:Thanks for this

A TPE for Okafor and Collison would be a great move

Ok would be an amazing vet for this team and leader for a young front court

and Collison setting up behind Jack would be ideal

I'd love this. To be honest though...I'd probably just give the starting 1 spot to Collison. Their numbers were very similar (though Collisons every so slightly better), Collison is younger, and would SEEMINGLY be the future PG.

pass first wrote:

McFurious1 wrote:Actually this year more so than previous years a TPE would be good since there are many teams looking to shed salary ie: Washington, Philly, New Orleans, Golden State etc.

Washington just took on Kirk Hinrich so I don't think they qualify.

I also kind of doubt this notion of how valuable it'll be. I can see teams missing out in free agency and competing to take on bad contracts + incentives so to say.

I think a lot of these contracts that will be given out this summer will blow up in teams faces and come the trade deadline with the lock out looming there should be talent available.

I was thinking more along the lines of getting out of Hedo's contract without having to take back a bad contract. We'd have a serviceable SG (that may get boo'd at home games), the remainder of Bosh's TPE ($10M) plus $25M in expirings (Banks, Evans and VC). Or is my math off?

Thanks for the breakdown. This should be a sticky as much as we had one last year to explain all the ins and outs of the cap and tax, so we could know our options if Marion stayed or went.

It would appear the TPE is the way to go. One thing about BC is he doesn't settle for the first option that appears. He will always look for ways to use the system to get the most back. So the TPE is right up his alley.

TheBat wrote:I was thinking more along the lines of getting out of Hedo's contract without having to take back a bad contract. We'd have a serviceable SG (that may get boo'd at home games), the remainder of Bosh's TPE ($10M) plus $25M in expirings (Banks, Evans and VC). Or is my math off?

Your math is fine, but like I said, $25 mil in expirings won't go as far in a weak FA class next summer and the toxic potential of putting VC on this roster for even 2 weeks could mess with what the team wants to do with Derozan, Amir, Bargs, etc... What's the point of starting him at SG if he is not part of the future? I can't see him being made to sit, so unless he's immediately dealt to a 3rd team who wants the expiring - and maybe some star appeal - it's very unlikely to happen.

pspot wrote:

pass first wrote:

McFurious1 wrote:Actually this year more so than previous years a TPE would be good since there are many teams looking to shed salary ie: Washington, Philly, New Orleans, Golden State etc.

Washington just took on Kirk Hinrich so I don't think they qualify.

I also kind of doubt this notion of how valuable it'll be. I can see teams missing out in free agency and competing to take on bad contracts + incentives so to say.

I think a lot of these contracts that will be given out this summer will blow up in teams faces and come the trade deadline with the lock out looming there should be talent available.

That may be true, we'll have to see.

I'm not sold on flipping it to pick up Collison just like that though.
Collison is like the new Bynum. I'm actually surprised nobody has a Collison signature yet.

One way to think about the TPE is that you're trading for the other team's cap-space directly. This isn't quite an accurate description, but in terms of assets given back to the trading team, this is a good way to approximate it. If we give Bosh to Chicago, say, for nothing but a 2nd round pick in return, we are effectively getting Bosh's cap hold in a trade + 2nd round pick.

Teams can then let TPEs expire (for $$) or trade them.

Great post I was thinking about this, I have a couple of questions about this and your help is grealty appreciated.

In the case of the players you mentioned JJ, Gay, Hayword; what would be the incentive of their respective teams to do a sign and trade with us.
As I understood from your post a TPE will enable us to become buyers, but a trade requires two parties (at least). I can't imagine these teams giving up on their players just to create another TPE especially if they are trying to keep them.

TPE for Okafor and Collison + Hedo for Peja.

I'm curious what other deals for the TPE will be out there. for some reason, relieving New Orleans keeps coming up.

Say Team A uses their $2 mil TPE to make a deal 2 months later with Team C, where they trade a $2 mil player for a $3.5mil player. This deal would normally not be allowed, but Team A's exception allows them to absorb the extra salary. Team C has now generated a new TPE in the amount of $1.5 mil - the difference in salary that they sent out.

If I understand what you're saying, this is incorrect. You can't combine a TPE with any other outgoing salary; it's kosher if you can break it into multiple deals, but that's not the case with your example.