Cap vs Cash on a Traded Contract

SoKrat3s · Post #1 » by **SoKrat3s** » Wed Jul 10, 2024 6:28 pm

I am looking for clarification on whether there is a difference in the amount of money a player gets charged on a cap and the money they are paid by the team.

Specifically, I am looking at Ben Simmons. He is on a $40M salary for the final season of his contract.
That contract has a fairly unique clause that pays out 25% in July, and another 25% on October 1st.
So on October 2nd he is set to earn $20M over the remainder of the season.

If he is traded on October 2nd the new team obviously would only be on the hook for paying $20M in salary.
But is the cap charge to the new team $40M or $20M?

The answer would significantly alter any trade scenarios.

Post #2 » by **Texas Chuck** » Wed Jul 10, 2024 6:46 pm

$40M is the cap charge

Colbinii · Post #3 » by **Colbinii** » Wed Jul 10, 2024 6:54 pm

If Ben Simmons is traded anytime between now and the trade deadline, his outgoing number is his annual salary.

kobe_vs_jordan · Post #4 » by **kobe_vs_jordan** » Wed Jul 10, 2024 6:54 pm

40 is cap charge. Would be interesting if there is any tax benefit for tax paying teams. I assume a player cap charge is prorated for tax purposes.

Post #5 » by **Andre Roberstan** » Thu Jul 11, 2024 5:30 pm

SoKrat3s wrote:I am looking for clarification on whether there is a difference in the amount of money a player gets charged on a cap and the money they are paid by the team.

Specifically, I am looking at Ben Simmons. He is on a $40M salary for the final season of his contract.
That contract has a fairly unique clause that pays out 25% in July, and another 25% on October 1st.
So on October 2nd he is set to earn $20M over the remainder of the season.

If he is traded on October 2nd the new team obviously would only be on the hook for paying $20M in salary.
But is the cap charge to the new team $40M or $20M?

The answer would significantly alter any trade scenarios.

The Ben Simmons part has already been answered, but for the record there are definitely cases where guys make something different than what their salary counts as on the cap. Minimum contracts for veterans above 10 years of service in the league are subsidized above the cap, but only count for a 10-year-vet number (to incentivize signing older players).

You can get into some weirdness into how much salary someone is owed after a trade if there are funky payment schedules, as in Simmons's case, but that doesn't really play into cap hit.

xdrta+ · Post #6 » by **xdrta+** » Thu Jul 11, 2024 7:14 pm

Andre Roberstan wrote:
The Ben Simmons part has already been answered, but for the record there are definitely cases where guys make something different than what their salary counts as on the cap. Minimum contracts for veterans above 10 years of service in the league are subsidized above the cap, but only count for a 10-year-vet number (to incentivize signing older players).

Actually, it's the 2 year number. For any vet over two years service the cap hit is the 2 year salary, the league pays the difference.

winforlose · Post #7 » by **winforlose** » Thu Jul 11, 2024 8:39 pm

Andre Roberstan wrote:
SoKrat3s wrote:I am looking for clarification on whether there is a difference in the amount of money a player gets charged on a cap and the money they are paid by the team.

Specifically, I am looking at Ben Simmons. He is on a $40M salary for the final season of his contract.
That contract has a fairly unique clause that pays out 25% in July, and another 25% on October 1st.
So on October 2nd he is set to earn $20M over the remainder of the season.

If he is traded on October 2nd the new team obviously would only be on the hook for paying $20M in salary.
But is the cap charge to the new team $40M or $20M?

The answer would significantly alter any trade scenarios.

The Ben Simmons part has already been answered, but for the record there are definitely cases where guys make something different than what their salary counts as on the cap. Minimum contracts for veterans above 10 years of service in the league are subsidized above the cap, but only count for a 10-year-vet number (to incentivize signing older players).

You can get into some weirdness into how much salary someone is owed after a trade if there are funky payment schedules, as in Simmons's case, but that doesn't really play into cap hit.

This, plus luxury tax payments. Simmons may cap hit at 40, but with tax that could be a lot more.

clippertown · Post #8 » by **clippertown** » Fri Jul 12, 2024 12:08 am

Seems likely that Ben will be waived sometime this year, especially as he gets most of his salary early in the season.

Why bother trading for him? Some team will pick him up for the veteran minimum (which is the right price for Ben).

Post #9 » by **Andre Roberstan** » Fri Jul 12, 2024 3:33 pm

xdrta+ wrote:
Andre Roberstan wrote:
The Ben Simmons part has already been answered, but for the record there are definitely cases where guys make something different than what their salary counts as on the cap. Minimum contracts for veterans above 10 years of service in the league are subsidized above the cap, but only count for a 10-year-vet number (to incentivize signing older players).

Actually, it's the 2 year number. For any vet over two years service the cap hit is the 2 year salary, the league pays the difference.

Serves me right for doing it off the dome without looking at CBAFAQ. I should know better.