Trading non-guaranteed players under the new CBA

[VeryMuchWoke]

Under the new CBA, in trades involving players with partially guaranteed money, in the current year, only there guaranteed portion of the contract will be counted for salary matching purposes.

Doesn't this create a new loophole that would allow teams to take on loads of future salary, while above the cap, without sending out matching salary?

For example the Spurs signed Gasol for about 18M/yr for 3 years, but in the third year only roughly 6M is guaranteed. Therefore, towards the end of the 2nd year the Spurs could trade Gasol, along with cash considerations if necessary, in exchange for a 18M a year player +/- 25%. The team receiving Gasol could then waive him and save 12.5M, and use the cash considerations to pay the guaranteed portion. This was all posited by Windhorst on the most recent episode of TBA.

Does Windhorst have this right? At what point would Gasol go from counting as 18M to counting as 6.5M? Could something resembling the above happen at the draft? What's the max allowed cash considerations?

When the new CBA came out I thought they closed the loophole by only counting the guaranteed portion as outgoing salary and counting the entire salary as incoming salary, but that would make trading partially guaranteed contracts almost impossible and I'm not sure how it would work during the fully guaranteed years preceding the final partially guaranteed year.

[DBoys]

"..the Spurs signed Gasol for about 18M/yr for 3 years, but in the third year only roughly 6M is guaranteed. Therefore, towards the end of the 2nd year the Spurs could trade Gasol, along with cash considerations if necessary, in exchange for a 18M a year player +/- 25%. The team receiving Gasol could then waive him and save 12.5M, and use the cash considerations to pay the guaranteed portion."

This is nothing alarming. Or really all that new, for that matter, except in the details.

For many many years, in some deals teams have been trading a player at the deadline with ongoing salary for one having no ongoing salary (ie, expiring). And in some deals teams have been including cash so that the other team could take the player and have money to waive him and pay off the contract. (In the Gasol case, the limits on cash would probably prevent the ability to fully pay off the rest of the guaranteed salary, but it could make a big dent in that payoff.)

[Smitty731]

Any new contract signed this summer under the new CBA (the new contract part is important here) is subject to the change in trade rules. In the past, the full value of the contract counted towards trade matching. In the new world, only the guaranteed portion counts.

A good example of this is George Hill. He signed a new deal this, so his contract is pursuant to the new CBA. That means in 2019-20, his salary of $18M only counts as $1M towards salary matching in trades. That difference of $17M is pretty huge.

What happened was the NBA closed the loophole of teams trading large non-guaranteed contracts and the acquiring team simply waiving the new player to create cap/tax savings. Now, the ability to acquire and waive such a player still exists, but it is a bit harder on the team that signed the player in the first to place to shuffle them off because they only count for the guaranteed portion of the deal.

[VeryMuchWoke]

What happened was the NBA closed the loophole of teams trading large non-guaranteed contracts and the acquiring team simply waiving the new player to create cap/tax savings. Now, the ability to acquire and waive such a player still exists, but it is a bit harder on the team that signed the player in the first to place to shuffle them off because they only count for the guaranteed portion of the deal.

That's the thing, according to Windhorst the loophole is not closed, it's just that the timing is a bit more difficult. At the very end of 2018-19 George hill could still be moved for a large contract, along with cash considerations to pay his guaranteed 19-20 salary, to take on a player making something in the neighborhood of 19M/yr. Windhorst implied that this could happen as late as the 2019 draft.

My question is, at what point does George Hill go from counting as 19M in trades (his 2018-2019 salary) to counting as 1M in trades (the guaranteed portion of his 2019-2020 salary)?

[DBoys]

Smitty, you missed (or ignored) my point, which is the crux of answering the meat of the question.

Yes, there was a change in the rules about how to treat non-to-partial guarantee current year salary in trade matching, on 2017 CBA contracts. I knew that and nodded to the factuality of the concept in the question.

But the question was essentially questioning the legitimacy of a team being able to shed future cap room via a trade, calling it a loophole, as if this new rule was trying to disallow any ability to shed salary in any way. But the league never intended to close the door on teams being able to add or subtract FUTURE salary in a trade. However ...

ITTTL, the idea that such a trade could be done in June, would not be accurate. At that point, the trade-matching value of Gasol's contract would be the 6M, not the 18M. The trade deadline of the prior season would be the last point at which the 18M could be used.

[VeryMuchWoke]

ITTTL, the idea that such a trade could be done in June, would not be accurate. At that point, the trade-matching value of Gasol's contract would be the 6M, not the 18M. The trade deadline of the prior season would be the last point at which the 18M could be used.

Perfect. Thank you DBoys.

[K_chile22]

Any new contract signed this summer under the new CBA (the new contract part is important here) is subject to the change in trade rules. In the past, the full value of the contract counted towards trade matching. In the new world, only the guaranteed portion counts.

A good example of this is George Hill. He signed a new deal this, so his contract is pursuant to the new CBA. That means in 2019-20, his salary of $18M only counts as $1M towards salary matching in trades. That difference of $17M is pretty huge.

What happened was the NBA closed the loophole of teams trading large non-guaranteed contracts and the acquiring team simply waiving the new player to create cap/tax savings. Now, the ability to acquire and waive such a player still exists, but it is a bit harder on the team that signed the player in the first to place to shuffle them off because they only count for the guaranteed portion of the deal.

Not worth opening another thread, but would George Hill, in this scenario, count as $1 M incoming salary for the new team, or do they have to send out matching salary for his whole contract? because that could make trading him extremely difficult.
Say kings are over the cap and want to trade Hill, trading team must send back at least $13M to match his salary, but the Kings cannot take that back without sending an additional $8M out, then the sending team must send back another $7 to take that new money in, which the kings would have to match, and so on and so forth.

[DBoys]

A good example of this is George Hill. He signed a new deal this, so his contract is pursuant to the new CBA. That means in 2019-20, his salary of $18M only counts as $1M towards salary matching in trades. That difference of $17M is pretty huge.

Not worth opening another thread, but would George Hill, in this scenario, count as $1 M incoming salary for the new team...?

He would be an $18m contract being added, and the team getting him would have to be able to add a contract of that size to their roster, either by having enough cap room or by having an exception to the cap limits that would permit them to add an $18M player via trade.

[K_chile22]

A good example of this is George Hill. He signed a new deal this, so his contract is pursuant to the new CBA. That means in 2019-20, his salary of $18M only counts as $1M towards salary matching in trades. That difference of $17M is pretty huge.

Not worth opening another thread, but would George Hill, in this scenario, count as $1 M incoming salary for the new team...?

He would be an $18m contract being added, and the team getting him would have to be able to add a contract of that size to their roster, either by having enough cap room or by having an exception to the cap limits that would permit them to add an $18M player via trade.

So a two team trade for Hill where both teams are over the cap is now impossible. I really hate this new rule. Why make it harder to make trades.

[Smitty731]

Not worth opening another thread, but would George Hill, in this scenario, count as $1 M incoming salary for the new team...?

He would be an $18m contract being added, and the team getting him would have to be able to add a contract of that size to their roster, either by having enough cap room or by having an exception to the cap limits that would permit them to add an $18M player via trade.

So a two team trade for Hill where both teams are over the cap is now impossible. I really hate this new rule. Why make it harder to make trades.

In talking with many front office folks, the indication I got was that both the NBAPA and the NBA league office don't love when a player becomes a contract more than a player. They know that they can't stop that fully, but by removing fully non-guaranteed, or small partially guaranteed deal, from the equation gets them a bit closer.

[DBoys]

Not worth opening another thread, but would George Hill, in this scenario, count as $1 M incoming salary for the new team...?

He would be an $18m contract being added, and the team getting him would have to be able to add a contract of that size to their roster, either by having enough cap room or by having an exception to the cap limits that would permit them to add an $18M player via trade.

So a two team trade for Hill where both teams are over the cap is now impossible. I really hate this new rule. Why make it harder to make trades.

"So a two team trade for Hill where both teams are over the cap is now impossible."

Not at all.

The only part of it that's become impossible is to use Hill as an "instantly expiring" trade chip to erase salary. But if a team wants to trade for Hill and keep him on their team as a player at the $18M salary, the trade can still work exactly the same way it always did, in an $18M salary for $18M salary trade more or less.