Help Explaining Trade Exceptions

[TheBallDoLie]

Can someone explain to me what a trade exception is but more so how it works. My understanding is it allows a team to take on salary without moving salary as long as the incoming salary fits in the trade exception amount.

For example let's say the Bulls are over the cap and have a trade exception worth 10 million. Can they take on a player worth 10 million and only trade a draft pick in return? Does the exception allow them to take on 10 million in salary without moving salary? Or do they still to trade salary to make it work?

[Smitty731]

Can someone explain to me what a trade exception is but more so how it works. My understanding is it allows a team to take on salary without moving salary as long as the incoming salary fits in the trade exception amount.

For example let's say the Bulls are over the cap and have a trade exception worth 10 million. Can they take on a player worth 10 million and only trade a draft pick in return? Does the exception allow them to take on 10 million in salary without moving salary? Or do they still to trade salary to make it work?

Your first example is correct. As long as the salary you take in is the same or less than the trade exception, you are good.

What you can't do is combine a trade exception with a player in a trade. Let's say you had a TPE worth $10M and a player making $5M, you can't combine them for a guy who makes $15M.

One thing that is often forgotten is that TPEs can also be used to claim players off waivers. It isn't as common as being used in a trade, but it is still a useful tool for roster building, especially if the TPE is a large one.

[TheBallDoLie]

Your first example is correct. As long as the salary you take in is the same or less than the trade exception, you are good.

What you can't do is combine a trade exception with a player in a trade. Let's say you had a TPE worth $10M and a player making $5M, you can't combine them for a guy who makes $15M.

One thing that is often forgotten is that TPEs can also be used to claim players off waivers. It isn't as common as being used in a trade, but it is still a useful tool for roster building, especially if the TPE is a large one.

[/quote]

First off, thank you so much for the reply. That is how I figured it worked. And the other bits you added were also good to know.

[DoItALL9]

In that first example could you make that trade without including a draft pick?

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[Smitty731]

In that first example would you still have to throw in a draft pick?

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This is a really great question. It wouldn't have to be a draft pick, but it has to be something. A common misconception is that trade exceptions can be traded. They can't. They are simply created when you send out more salary for one player than you take back.

In every trade, the team has to send something out. That can be a pick, a player, cash, or rights to a draftee. You can even protect the pick. Eric Pincus coined the term "nothing something", which says it basically perfectly. Often you see trades where a team trades a second round pick that is protected 31-55. That basically will only come into play if they have one of the best records in the league. Or they'll trade the draft rights to a player who is never coming to the NBA.

The NBA tried to clean up that last one by issuing a memo to teams saying they would evaluate trades involving draft rights to make sure that player has a "reasonable chance of coming to the NBA", so that teams weren't trading the rights to some 50 year old who is long since retired. But, unless the NBA killed a deal behind closed doors, we haven't seen them enforce it yet.

TL/DL - Yes you still have to give up something when you are using a TPE to take in a player.

[DoItALL9]

Thanks!
Also, I often see "top 55 protected" throw around a bunch. Is that special In anyway? Is it usedIn relation to NBA approval? Is there something stopping teams from saying top 59 protected? Or protected unless it's the 44th pick exactly (which they could purposely avoid)?

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