Trading player who signed 4 year extension

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Trading player who signed 4 year extension 

Post#1 » by bwgood77 » Tue Dec 26, 2017 7:27 pm

Is this rule still valid?

Since an extend-and-trade has greater limits than a regular extension (three seasons and 5% raises vs. four seasons and 8% raises), the rules prevent teams from circumventing these limits by extending and trading the player in separate transactions. If a team extends a player beyond the limits of an extend-and-trade (for example, if they sign a player to a four-year extension), they can't trade the player for six months.


http://www.cbafaq.com/salarycap.htm#Q95

For example, TJ Warren signed a 4 year extension on Sept 26th. My understanding based on the above is that he cannot be traded this year, since he wouldn't be eligible for trade until March 26th which is after the trade deadline.
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Re: Trading player who signed 4 year extension 

Post#2 » by Smitty731 » Tue Dec 26, 2017 10:08 pm

As far as I know, this is still valid. I also remember reading somewhere that Warren isn't eligible to be traded until after the season, so this would make sense.
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Re: Trading player who signed 4 year extension 

Post#3 » by gom » Fri Jan 19, 2018 7:53 am

Smitty731 wrote:As far as I know, this is still valid. I also remember reading somewhere that Warren isn't eligible to be traded until after the season, so this would make sense.


Yes. I believe this is the same case with Josh Richardson.
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Re: Trading player who signed 4 year extension 

Post#4 » by SideSwipe » Tue Jan 30, 2018 7:12 am

bwgood77 wrote:Is this rule still valid?

Since an extend-and-trade has greater limits than a regular extension (three seasons and 5% raises vs. four seasons and 8% raises), the rules prevent teams from circumventing these limits by extending and trading the player in separate transactions. If a team extends a player beyond the limits of an extend-and-trade (for example, if they sign a player to a four-year extension), they can't trade the player for six months.


http://www.cbafaq.com/salarycap.htm#Q95

For example, TJ Warren signed a 4 year extension on Sept 26th. My understanding based on the above is that he cannot be traded this year, since he wouldn't be eligible for trade until March 26th which is after the trade deadline.


Thanks for following up on this BW.

it is this line from Larry's FAQ that is confusing...
"A rookie scale contract (see question number 47) can be extended and traded in an extend-and-trade transaction, although there is no benefit to doing so. A rookie scale extension can be signed immediately after the player is traded (such as with James Harden's trade to the Rockets in 2012), and a rookie scale extension (see question number 58) can be much larger than the extension allowed through an extend-and-trade."

That line is a little nebulous. If that line is true, then the reason for not allowing it for vets is removes, thus allowing rookie-scale extensions to be traded.

Below is long, but bear with me.

Here's where it also gets trickier- from the NBAPA CBA:

http://3c90sm37lsaecdwtr32v9qof-wpengine.netdna-ssl.com/wp-content/uploads/2016/02/2017-NBA-NBPA-Collective-Bargaining-Agreement.pdf

~Pages 216-230

Section 8(f)(i)
In the event a player enters into an Extension pursuant to
Section 7(a)
above (other than a Designated Veteran Player
Extension governed by Section (f)(ii) below) that covers
four (4) or more Seasons and/or provides for Salary and
Unlikely Bonuses or annual increases in the player’s Salary
and Unlikely Bonuses in excess of the amounts permissible
in connection with Extensions entered in connection with
an agreement to trade the Contract pursuant to Section
8(e)(2) above, the player may not be traded before six (6)
months following the date on which such Extension was
signed. If a team acquires a player in a trade, then, for a
period of six (6) months following the date of the trade, the
team may not enter into an Extension with the player that
provides for four (4) or more Seasons and/or provides for
Salary and Unlikely Bonuses or annual increases in the
player’s Salary and/or Unlikely Bonuses in excess of the
amounts permissible in connection with Extensions
230 Article VII
entered in connection with an agreement to trade the
Contract pursuant to Section 8(e)(2) above.

Section 7(a) is for Veteran Extensions only.

Section 7(a)
Veteran Extensions. No Player Contract, other than a Rookie
Scale Contract, may be extended except in accordance with the following:
(1) Subject to the rules set forth in Section 7(a)(2) below: (i) a
Player Contract covering a term of three (3) or four (4) Seasons
(including any Option Year) may be extended no sooner than the
second anniversary of the signing (or, as applicable, the extension)
of the Contract; and (ii) a Player Contract covering a term of five
(5) or six (6) Seasons may be extended no sooner than the third
anniversary of the signing (or, as applicable, the extension) of the
Article VII 217
Contract......"

Rookie Extensions are covered by 7(b) not 7(a)

Section 7(b)
Rookie Scale Extensions. No Rookie Scale Contract may be
extended except in accordance with the following:
(1) A First Round Pick who enters into a Rookie Scale Contract
may enter into an Extension of such Rookie Scale Contract during
the period from 12:01 p.m. eastern time on the last day of the
Moratorium Period through 6:00 p.m. eastern time on the day
prior to the first day of the Regular Season of the second Option
Year provided for in such Contract (assuming the Team exercises
such Option).
(2) An Extension of a Rookie Scale Contract may provide for
Salary and Unlikely Bonuses in the first Salary Cap Year covered by
the extended term totaling no more than the maximum amount
provided for in Article II, Section 7. Annual increases and
decreases in Salary and Unlikely Bonuses shall be governed by
Section 5(c)(3) above.
(3) Notwithstanding anything to the contrary in this Agreement, a
player who will not be a Qualifying Veteran Free Agent at the
conclusion of his Rookie Scale Contract will not be eligible to enter
into an Extensio.....

and then this in reference to Poison Pill, you will notice a specific, different reference to 7(b) which is absent in the 6 month restriction clause:

Section 8(g)
In the event a Rookie Scale Contract is extended pursuant to
Section 7(b) above and a Team proposes to trade such Contract to another
Team prior to the July 1 immediately following such extension, then, only
for purposes of determining whether the acquiring Team has Room for
the Contract, the Salary for the last Season of the original term of the
Contract shall be deemed to equal the average of the aggregate Salaries for
such Season and each Season of the extended term...

I have not found any clause governing or referencing 7(b) with regards to trade restrictions after an extension. Either we are wrong about Rookie-scale extensions not being able to be traded before 6 months or this contract is not well written/implemented. It has to be one of the two.

* Pardon the formatting
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Re: Trading player who signed 4 year extension 

Post#5 » by SideSwipe » Tue Jan 30, 2018 7:13 am

Smitty731 wrote:As far as I know, this is still valid. I also remember reading somewhere that Warren isn't eligible to be traded until after the season, so this would make sense.


See above, I'd like some of your insight on it.
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Re: Trading player who signed 4 year extension 

Post#6 » by DBoys » Tue Jan 30, 2018 8:01 am

"I have not found any clause governing or referencing 7(b) with regards to trade restrictions after an extension. Either we are wrong about Rookie-scale extensions not being able to be traded before 6 months or this contract is not well written/implemented. It has to be one of the two."

The rule you cited, and Coon FAQ as well, clearly define when a player can and cannot be traded in relation to a rookie extension.

The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules.

The CBA above does not say otherwise. Nor does Coon FAQ, which says on the topic: "A rookie scale contract (see question number 47) can be extended and traded in an extend-and-trade transaction, although there is no benefit to doing so. A rookie scale extension can be signed immediately after the player is traded (such as with James Harden's trade to the Rockets in 2012), and a rookie scale extension (see question number 58) can be much larger than the extension allowed through an extend-and-trade. "
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Re: Trading player who signed 4 year extension 

Post#7 » by SideSwipe » Tue Jan 30, 2018 10:03 pm

DBoys wrote:"I have not found any clause governing or referencing 7(b) with regards to trade restrictions after an extension. Either we are wrong about Rookie-scale extensions not being able to be traded before 6 months or this contract is not well written/implemented. It has to be one of the two."

The rule you cited, and Coon FAQ as well, clearly define when a player can and cannot be traded in relation to a rookie extension.

The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules.

The CBA above does not say otherwise. Nor does Coon FAQ, which says on the topic: "A rookie scale contract (see question number 47) can be extended and traded in an extend-and-trade transaction, although there is no benefit to doing so. A rookie scale extension can be signed immediately after the player is traded (such as with James Harden's trade to the Rockets in 2012), and a rookie scale extension (see question number 58) can be much larger than the extension allowed through an extend-and-trade. "


Actually it doesn't. You should take a look at the citations a d make sure you check the references. The Section 8 rule is only applies to deals pursuant to 7(a)-veteran extensions- not 7(b) rookie extensions. There is no other reference to the 6month trade prohibition in the entire CBA. Either there is a different governing document(meaning the CBA is poorly written on this point) or our assumption about application is incorrect. It's one of the two.
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Re: Trading player who signed 4 year extension 

Post#8 » by bwgood77 » Tue Jan 30, 2018 10:39 pm

SideSwipe wrote:Actually it doesn't. You should take a look at the citations a d make sure you check the references. The Section 8 rule is only applies to deals pursuant to 7(a)-veteran extensions- not 7(b) rookie extensions. There is no other reference to the 6month trade prohibition in the entire CBA. Either there is a different governing document(meaning the CBA is poorly written on this point) or our assumption about application is incorrect. It's one of the two.


I pulled up the document and it appears that what I originally posted applies to vet extensions, but it doesn't indicate that rule is there for rookie extensions.

But it sounds like if he is traded, since he's extended, his contract value for trade purposes would be a little above $10 million, ($47 million extension +3+ million salary this year)/5
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Re: Trading player who signed 4 year extension 

Post#9 » by DBoys » Wed Jan 31, 2018 4:24 am

SideSwipe wrote:
DBoys wrote:"I have not found any clause governing or referencing 7(b) with regards to trade restrictions after an extension. Either we are wrong about Rookie-scale extensions not being able to be traded before 6 months or this contract is not well written/implemented. It has to be one of the two."

The rule you cited, and Coon FAQ as well, clearly define when a player can and cannot be traded in relation to a rookie extension.

The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules.

The CBA above does not say otherwise. Nor does Coon FAQ, which says on the topic: "A rookie scale contract (see question number 47) can be extended and traded in an extend-and-trade transaction, although there is no benefit to doing so. A rookie scale extension can be signed immediately after the player is traded (such as with James Harden's trade to the Rockets in 2012), and a rookie scale extension (see question number 58) can be much larger than the extension allowed through an extend-and-trade. "


Actually it doesn't. You should take a look at the citations a d make sure you check the references. The Section 8 rule is only applies to deals pursuant to 7(a)-veteran extensions- not 7(b) rookie extensions. There is no other reference to the 6month trade prohibition in the entire CBA. Either there is a different governing document(meaning the CBA is poorly written on this point) or our assumption about application is incorrect. It's one of the two.


You argued against what I said - and then wrote a whole paragraph that tried to say what I just said. You might want to read again what I wrote, before assuming I'm wrong and assuming you disagree with it.

Here's what I said about a rookie extension, relating to a trade: "The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules."
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Re: Trading player who signed 4 year extension 

Post#10 » by DBoys » Wed Jan 31, 2018 4:32 am

bwgood77 wrote:But it sounds like if he is traded, since he's extended, his contract value for trade purposes would be a little above $10 million, ($47 million extension +3+ million salary this year)/5


Looks right except the following is a bit too broadly written ....

"his contract value for trade purposes"

Special cap rules, which means there are TWO contract sizes for trade purposes until July 1, depending on whether you were the team trading him away or the one acquiring him.
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Re: Trading player who signed 4 year extension 

Post#11 » by SideSwipe » Wed Jan 31, 2018 5:04 am

DBoys wrote:[clearly define when a player can and cannot be traded in relation to a rookie extension.


This is not accurate. You should try re-reading what I quoted again. It is not clear. If you read it you would know read that it says nothing against my point. It in fact supports my point, not yours. In contracts everything is allowed unless it's prohibited in the contract. Nowhere in the citation I originally provided does it say a rookie cannot be traded after being extended. It's not "clear". If it were clear this thread would not have happened and Coons FAQ wouldn't be nebulous, which it currently is on this point.
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Re: Trading player who signed 4 year extension 

Post#12 » by SideSwipe » Wed Jan 31, 2018 5:05 am

DBoys wrote:
bwgood77 wrote:But it sounds like if he is traded, since he's extended, his contract value for trade purposes would be a little above $10 million, ($47 million extension +3+ million salary this year)/5


Looks right except the following is a bit too broadly written ....

"his contract value for trade purposes"

Special cap rules, which means there are TWO contract sizes for trade purposes until July 1, depending on whether you were the team trading him away or the one acquiring him.


This is what's commonly referred to as the Poison Pill Provision.
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Re: Trading player who signed 4 year extension 

Post#13 » by bwgood77 » Wed Jan 31, 2018 5:18 am

SideSwipe wrote:This is what's commonly referred to as the Poison Pill Provision.


It's funny you mention, because I had heard that referred to previously with the Warren contract, and googled for a refresher to see if it matched this, and it seems it was more of those backloaded contracts (like the Lin one) where another team offered a contract that inflated in later years which made it difficult to match. It didn't seem like apples to apples but I'm not expert on what all the situations "poison pill" can refer to.

In this case it just seems that the Suns would have to take back $10 million in contracts, or the other team would have to send a larger amount of contract values back (if over the cap) then his current salary because the extension is already set, so in this sense, with the big jump, it could deter a team from trading for him if they don't have the space or right contracts to match. So it didn't seem like the same situation. I didn't research it much though. It seemed like those contracts more benefited a team offering a RFA an offer that made it difficult for the current team to match, and sometimes would trigger more tax (like with Lin) but in this case, it might just make it different than trading for a normal contract with no extension. I guess if the Suns were over the cap, but could go over because they have Warren's bird rights, it might make it a bit more difficult in that case if they were to trade for another player because in that circumstance, if over the cap, trading for a guy they don't have bird rights to, might not be possible without avoiding the tax or whatever. But again, I'm not completely sure with any of this.

Anyway, it sounds like the Suns could trade him now, with that stipulation.
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Re: Trading player who signed 4 year extension 

Post#14 » by DBoys » Wed Jan 31, 2018 6:15 am

SideSwipe wrote:This is not accurate.


LOL you didn't read what I wrote. And now you just copy my words with a slight edit, in an attempt to mock me. I get it. You don't really want to discuss what I said, because what I said was accurate.

Again, here's what I said about a rookie extension, relating to a trade. If you have a problem with it, feel free to point it out.
"The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules."
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Re: Trading player who signed 4 year extension 

Post#15 » by DBoys » Wed Jan 31, 2018 6:29 am

bwgood77 wrote:
SideSwipe wrote:This is what's commonly referred to as the Poison Pill Provision.


It's funny you mention, because I had heard that referred to previously with the Warren contract, and googled for a refresher to see if it matched this, and it seems it was more of those backloaded contracts (like the Lin one) where another team offered a contract that inflated in later years which made it difficult to match. It didn't seem like apples to apples but I'm not expert on what all the situations "poison pill" can refer to.


Actually, Poison Pill is NOT a technical term, but rather a slang one used by the media for certain situations.

This (rookie extension, followed by a trade before the following July 1) creates what USED TO BE commonly referred to as the Poison Pill Provision. Then, after the 2011 CBA, the Lin-like situation began to be referred to by such a designation, as you correctly note.

They both were used to talk about a contract that in some way seemed to have a "gotcha" in some special cap-accounting quirk.

Personally, I think both are proper usage. I would broadly define a Poison Pill situation as "one in which there are SPECIAL cap-accounting rules that differ from one team to another on the same contract, and that may prove disadvantageous to a team due to the way the salary on a single contract may be regarded as different numbers for different teams."
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Re: Trading player who signed 4 year extension 

Post#16 » by DBoys » Wed Jan 31, 2018 6:40 am

bwgood77 wrote:In this case it just seems that the Suns would have to take back $10 million in contracts, or the other team would have to send a larger amount of contract values back (if over the cap) then his current salary because the extension is already set, so in this sense, with the big jump, it could deter a team from trading for him if they don't have the space or right contracts to match. So it didn't seem like the same situation. I didn't research it much though. It seemed like those contracts more benefited a team offering a RFA an offer that made it difficult for the current team to match, and sometimes would trigger more tax (like with Lin) but in this case, it might just make it different than trading for a normal contract with no extension. I guess if the Suns were over the cap, but could go over because they have Warren's bird rights, it might make it a bit more difficult in that case if they were to trade for another player because in that circumstance, if over the cap, trading for a guy they don't have bird rights to, might not be possible without avoiding the tax or whatever. But again, I'm not completely sure with any of this.

Anyway, it sounds like the Suns could trade him now, with that stipulation.


The issue with trading a Poison Pill deal (like Warren) is that there are special cap-accounting rules in such a trade before July 1, where the same contract counts as one amount for one team but a different amount for the other. I(n some situations, that can really make it hard-to-impossible to do a deal.)

However, it should be noted that it's far less of an obstacle now, with 175% matching available for some teams, than it used to be when the biggest cushion was 125%.

The RFA situation like Lin was something unique to a possible offer to an RFA who was not coming off a 1st round contract, and had been in the league for 2 years or less. In order to make it easier for a team to match an offer and keep him, they invented an "Arenas rule" to limit the way such an offer was structured and counted, but it backfired when teams began to see the backloaded salary hit as a potential penalty rather than an advantage. The rule was changed in 2017 to lessen the problem.
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Re: Trading player who signed 4 year extension 

Post#17 » by SideSwipe » Wed Jan 31, 2018 6:46 am

DBoys wrote:
SideSwipe wrote:This is not accurate.


LOL you didn't read what I wrote. And now you just copy my words with a slight edit, in an attempt to mock me. I get it. You don't really want to discuss what I said, because what I said was accurate.

Again, here's what I said about a rookie extension, relating to a trade. If you have a problem with it, feel free to point it out.
"The 1st round player on rookie scale deal who is entering his 4th year can be traded before a rookie extension, and then still be extended after. He can be traded as part of an extension (ie, extend-and-trade). He can be extended and then traded, but subject to special cap rules."


Copy your words? :lol: No, that's not all you said-you said it was "CLEAR" It is not "CLEAR" in the CBA or the Coon FAQ. I have read what you wrote over and over, but it is clear you have not read what I have written. And yes, I already pointed it out to you. Your last line "He can be extended and then traded, but subject to special cap rules" is accurate per my research above, but not "clear" in the CBA. It is "clear" only by omission.
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Re: Trading player who signed 4 year extension 

Post#18 » by bwgood77 » Wed Jan 31, 2018 6:51 am

I don't think the above back and forth matters much anymore since it seems pretty clear what the answer is.
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Re: Trading player who signed 4 year extension 

Post#19 » by SideSwipe » Wed Jan 31, 2018 6:58 am

DBoys wrote:
bwgood77 wrote:
SideSwipe wrote:This is what's commonly referred to as the Poison Pill Provision.


It's funny you mention, because I had heard that referred to previously with the Warren contract, and googled for a refresher to see if it matched this, and it seems it was more of those backloaded contracts (like the Lin one) where another team offered a contract that inflated in later years which made it difficult to match. It didn't seem like apples to apples but I'm not expert on what all the situations "poison pill" can refer to.


Actually, Poison Pill is NOT a technical term, but rather a slang one used by the media for certain situations.

This (rookie extension, followed by a trade before the following July 1) creates what USED TO BE commonly referred to as the Poison Pill Provision. Then, after the 2011 CBA, the Lin-like situation began to be referred to by such a designation, as you correctly note.

They both were used to talk about a contract that in some way seemed to have a "gotcha" in some special cap-accounting quirk.

Personally, I think both are proper usage. I would broadly define a Poison Pill situation as "one in which there are SPECIAL cap-accounting rules that differ from one team to another on the same contract, and that may prove disadvantageous to a team due to the way the salary on a single contract may be regarded as different numbers for different teams."


Poison Pill is colloquial contract terminology for any clause that is difficult to swallow- hence the name. It's something that discourages action rather than prevents. There is no firm NBA definition, only common use.

It looks like the ESPN trade machine identifies Warren's contract as PPP as well. As BW mentioned above, ESPN has incoming trade value at $10.03M. This provisions strength is lessened by teams that are under the cap more than the overage of the Poison Pill which in PHX's case they are.
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Re: Trading player who signed 4 year extension 

Post#20 » by DBoys » Wed Jan 31, 2018 4:41 pm

Edited - will make my summary again and leave it at that, so we can move on.

Re a rookie scale extension, relating to a trade:

The 1st round player on rookie scale deal who is entering his 4th year can be
A - traded before a rookie extension, and then still be extended after,
b - traded as part of an extension (ie, extend-and-trade), or
c - be extended first and then traded traded (subject to special cap rules).

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