Question about TPE

[Friend_Of_Haley]

Okay, so I know that a TPE can only be used alone in a trade and can't be combined with any other exception. However you sometimes hear that a team used a TPE in a bigger package, but technically split it up into a couple smaller trades since they couldn't combine the TPE. For the other team, not using the TPE, does each individual trade need to make sense, or can they just view it as one larger trade? The reason I ask, is you often hear, "For team X, it is just one larger simultaneous trade" or something like that.

And the ultimate reason I'm curious about this is I'm wondering if in a trade of a BYC player, if a TPE could be used instead of another salary to make up the difference.

For instance:
Team A wants to trade BYC player to team B for two players.
The BYC player has an $8M contract and is worth $4M outgoing, so team A can only take back $5M. For the other team, they are taking on $8M and must take back at least $6M. So there is that $1M difference that needs to be made up. Now usually another player is just thrown in, but could it be done like this instead:

For team A:
BYC Player ($4M outgoing) for Player A ($4M)
And then in a separate trade, for Player B ($3M) using their previosu TPE

Then for team B, they just view both trades as one large trade with $7M outgoing and $8M incoming.

So basically, can one team view a trade as two separate trade, using a TPE while the other team view it just as one trade? Hope my questions make sense. Thanks.

[loserX]

No.

You can split a larger trade into smaller trades, but each of the smaller trades must always be legal. A transaction can't be legal for one team and not for the other, as in your example...each trade has to be registered separately with the league office, as I understand. So you can't say Team A made two trades and Team B made only one.

[FGump]

For instance:
Team A wants to trade BYC player to team B for two players ($4m and $3M).
The BYC player has an $8M contract and is worth $4M outgoing.
Team A has a $3M TPE.

Team A ....................................................Team B
BYC Player ($8M/4M) .................................Player $4M
TPE $3M ...................................................Player $3M

No.

I disagree.

I don't see any aggregation of a TPE with anything else. Therefore shouldn't be a problem.

[Modern_epic]

No.

You can split a larger trade into smaller trades, but each of the smaller trades must always be legal. A transaction can't be legal for one team and not for the other, as in your example...each trade has to be registered separately with the league office, as I understand. So you can't say Team A made two trades and Team B made only one.

You can certainly say that. It happens not infrequently when a team has to include minimum salary players to make a trade work, from what I understand. The team sending a minimum salary player makes only one deal, the min player and the player they really want to send out. The team taking the minimum salary player takes him using the minimum salary exception, meaning they made two deals, one for the real player, and one using the minimum salary exception.

[lakerfan10770]

I am pretty sure that the Trevor Ariza for Brian Cook & Maurice Evans trade is a perfect example of this actually happening.

Brian Cook's Salary is $3,500,000, but he was BYC so his outgoing amount to the Lakers was $1,817,141.

Maurice Evans' Salary is $1,740,000

Trevor Ariza's Salary is $3,100,000

From the Lakers' perspective it was straight up Cook & Evans for Ariza.

From Orlando's persepctive it was Ariza for Cook and then they acquired Evans using a portion of the DPE from Tonny Battie.

[loserX]

For instance:
Team A wants to trade BYC player to team B for two players ($4m and $3M).
The BYC player has an $8M contract and is worth $4M outgoing.
Team A has a $3M TPE.

Team A ....................................................Team B
BYC Player ($8M/4M) .................................Player $4M
TPE $3M ...................................................Player $3M

-= original quote snipped =-



I disagree.

I don't see any aggregation of a TPE with anything else. Therefore shouldn't be a problem.

But in the example you give, Team B is trading a $4M player for an $8M player. It has nothing to do with combining with the TPE...doesn't the first half of the trade have to be legal regardless of what the second half is?

(Please note I am no expert...I am looking for clarification too.)

[loserX]

-= original quote snipped =-



You can certainly say that. It happens not infrequently when a team has to include minimum salary players to make a trade work, from what I understand. The team sending a minimum salary player makes only one deal, the min player and the player they really want to send out. The team taking the minimum salary player takes him using the minimum salary exception, meaning they made two deals, one for the real player, and one using the minimum salary exception.

Ah, okay. Very interesting...obviously I was wrong in my original assessment. Thanks! Apologies to anyone I might have misled.

[FGump]

-
But in the example you give, Team B is trading a $4M player for an $8M player.

Team B is acquiring an 8M player, and using the simultaneous TPEs (combined) of <4M + 3M> to do so using the 125% cushion. There's nothing illegal on team B's part.

[Friend_Of_Haley]

Thanks for the help guys. So hypothetically if the Bulls were working out a S&T with Gordon, they might be able to not have to send another matching contract, although the circumstances with matching salary would have to be pretty specific. And from Chicago's standpoint, the BYC Gordon part of the trade will have to be 100% plus 100K, as opposed to 125%, correct? So if his BYC outgoing is 4.25M then the incoming in that half will be between 4.125M and 4.35M? Then the other half could be up to the 5.25M that their Joe Smith TPE equals.

Let me know if I'm off on any part of this. Thanks.

Edit to Clarify because I just caught myself. In Gordon's case his BYC amount will be at least 4.881M (this years salary), and would only be more if the first year of the salary is >9.762.

Edit II- Now I'm thinking after reading more that the Gordon part of the trade does not need to be 100% and can be 125%, making it much easier and much more likely.

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)

Plus Larry Coon's CBA seems to indicate that a non simulataneous trade can only contain one player, which this doesn't (or the Lakers-Magic example). So does that sound right?[/quote]

[Friend_Of_Haley]

I am pretty sure that the Trevor Ariza for Brian Cook & Maurice Evans trade is a perfect example of this actually happening.

Brian Cook's Salary is $3,500,000, but he was BYC so his outgoing amount to the Lakers was $1,817,141.

Maurice Evans' Salary is $1,740,000

Trevor Ariza's Salary is $3,100,000

From the Lakers' perspective it was straight up Cook & Evans for Ariza.

From Orlando's persepctive it was Ariza for Cook and then they acquired Evans using a portion of the DPE from Tonny Battie.

Wouldn't it have to Cook for Evans (1.817 and 1.74) and then TPE for Ariza?

[loserX]

Team B is acquiring an 8M player, and using the simultaneous TPEs (combined) of <4M + 3M> to do so using the 125% cushion. There's nothing illegal on team B's part.

I understand my previous error now But I thought individual TPEs couldn't be combined with other exceptions? Maybe I'm just not understanding your wording, sorry

[Dunkenstein]

In #69 of his FAQ, Larry writes "For example, a team with a $1 million Traded Player exception cannot combine it with their $2 million player to trade for a $3 million player."

In #72, he writes "What is not allowed is using two different exceptions for the same player. Here is something that is not allowed: A team has a $5 million player and a $1 million Traded Player exception from a previous trade, and wants to add the Traded Player exception to the 125% plus $100,000 margin from their $5 million player ($6,350,000), in order to trade for a player making $7,000,000. This cannot be done."

In #68, Larry states "the term "Traded Player exception" refers to the entire exception which allows teams to make trades above the salary cap (including simultaneous trades, non-simultaneous trades, and base year compensation)."

In FOH's example, team B is not combining two TPEs to acquire an $8M player, it is combining two players. Team B is using a $4M player and a $3M player to acquire an $8M player.

Team A is using a $4M player to acquire a $4M player and a $3M TPE to acquire a $3M player.

All very legal.

[loserX]

^Gotcha. I was confused by the phrase "simultaneous TPEs (combined)" in FGump's response to me.

Thanks, all, I've learned something today

[Friend_Of_Haley]

In FOH's example, team B is not combining two TPEs to acquire an $8M player, it is combining two players. Team B is using a $4M player and a $3M player to acquire an $8M player.

Team A is using a $4M player to acquire a $4M player and a $3M TPE to acquire a $3M player.

All very legal.

In my example, I used two 4M dollar players because I was thinking the 100% rule would apply, but its not actually a non-simulataneous trade, is it? So that half of the trade can actually be used with 125% right? So if my BYC player is 4M, I could take back up 5M, making it much easier. Is this correct?

[FGump]

All players are turned into TPE's into the trade process and then matched up. So it's never actually player-for-player but rather simultaneous TPE for simultaneous TPE.

If used simultaneously (in that trade), the TPE will be up to 125%, but if all or part is kept for a later trade it becomes a non-simultaneous TPE and only worth 100%. Plus 100K in each case.

You can't aggregate (ie, combine with another TPE of any sort) a non-simultaneous TPE.

[Friend_Of_Haley]

All players are turned into TPE's into the trade process and then matched up. So it's never actually player-for-player but rather simultaneous TPE for simultaneous TPE.

If used simultaneously (in that trade), the TPE will be up to 125%, but if all or part is kept for a later trade it becomes a non-simultaneous TPE and only worth 100%. Plus 100K in each case.

You can't aggregate (ie, combine with another TPE of any sort) a non-simultaneous TPE.

Gotcha. So that makes it pretty unlikley given you are working with basically a 200K window. Its possible though, and if you get creative with the first year of the contract you can change the BYC amount 0.5M or so.

[LarryCoon]

Plus Larry Coon's CBA seems to indicate that a non simulataneous trade can only contain one player, which this doesn't (or the Lakers-Magic example). So does that sound right?

A clarification on this point -- The rule is that an aggregation is allowed only in a simultaneous trade. So that means that yes, a non-simultaneous trade can have only one player (because by definition, if there was more than one player, it wouldn't have generated the trade exception that allows it to be non-simultaneous), but that applies to the original trade which generates the trade exception. There are no such rules for any subsequent trades that consume the trade exception.

[Friend_Of_Haley]

-= original quote snipped =-


A clarification on this point -- The rule is that an aggregation is allowed only in a simultaneous trade. So that means that yes, a non-simultaneous trade can have only one player (because by definition, if there was more than one player, it wouldn't have generated the trade exception that allows it to be non-simultaneous), but that applies to the original trade which generates the trade exception. There are no such rules for any subsequent trades that consume the trade exception.

Hey, thanks for the update Larry. I really appreciate your blog! Keep up the good work.

This means that the portion of the trade the uses the previous TPE (the Joe Smith one in Chicago's case) can take any number of players back, but the other part of the trade will need to only include one player, and fall within the 100% rule. Correct?

[FGump]

-
This means that the portion of the trade the uses the previous TPE (the Joe Smith one in Chicago's case) can take any number of players back, but the other part of the trade will need to only include one player, and fall within the 100% rule. Correct?

To create a TPE, you must send away one player or less (and it doesn't matter how many you take back).

Once you have that TPE, when you use it, it can absorb the salary of as many players as will fit, and they can be all at once or one by one. There is no extra 25% cushion in salary matching when using a TPE to absorb the salary of a player(s), but if needed there is ultimately a 100K cushion.