Why did SUNS receive a $3,966,207 TE for Banks?

[Mr. Sun]

ESPN Trade Machine shows a $3,966,207 PHX TE resulting from the Banks trade to the Heat. How is that possible?

[nevetsov]

See the Suns forum.

[Modern_epic]

http://www.realgm.com/boards/viewtopic.php?t=759298

[Mr. Sun]

Ohhhh, so SUNS did not need Banks to make the trade with Shaq! That is where I was tripping because I was under the impression Banks was required.

[Friend_Of_Haley]

I've been trying to wrap my head around the idea of the TPE for a while now, initially I wondered if a Kobe to Chicago deal could be worked out by just making separate trades that causes a TPE. I wondered this because part of the issuse seemed to be Chicago's ability to match contracts.

As far as I have been able to tell there not really as restriction for a trade that creates a TPE other than it can't be multiple players.

So say theres two teams:
Team A wants to trade player one (2M) and player two (3M) to Team B for player three (10M).

Theres no way that this works right?
But why not make three separate trades:
Player One for nothing, creating TPE
Player Two for nothing, creating TPE
Player Three for nothing, creating TPE

I've read over Larry Coon's explanation of non-simultaneous trades many times and I can't see why that couldn't be done. Essentially meaning, there are no trade restrictions, because you can just trade a player for nothing and create a TPE (and its irrelevant whether you plan to use it or not).

A time this could really come into play is deals that involve expiring contracts. If a teams doesn't have an expiring contract, but is willing to just make a couple separate trades that generate TPE, why not?

Is there something obvious I'm missing?

[Dunkenstein]

^^ You can't trade a player for nothing. That's what you're missing.

[Friend_Of_Haley]

I'm not trading a player for nothing, its a non-simultaneous trade that creates a TPE.

Banks was technically traded for nothing, and generated a TPE for PHX.

Whats stopping a teams from making 2 or more non-simultaneous trades to get around the 125% rule.

http://members.cox.net/lmcoon/salarycap.htm#69

In examples Larry Coon gave there, and in the case of the PHX trade with Banks, I think its obvious a player can be traded for nothing, it just fits under a different exception than the 125% rule.

[FGump]

What you are missing is that (a) any non-simultaneous TPE you get will be for the exact amount (in other words, you lose the 25% leeway you otherwise would have), and (b) those TPEs cannot be combined later to yield a higher-salaried player.

So the ONLY way you can faciliate getting Kobe to Chicago with a TPE is to trade away a player making more than Kobe's salary, to someone, and get no salary back in return. Then use that huge bigger-than-Kobe's-salary TPE to facilitate a trade for Kobe.

In other words, while in theory it might seem possible, in actuality it doesn't work.

[Friend_Of_Haley]

I'm not talking about using a TPE to get Kobe, I'm talking about the Kobe trade (or whoever the trade is for) creating the TPE.

For example, if you look at the Larry Coon link there, check out the Houston-Orlando TMac trade. There were three separate trades. One was a regular old 125% rule trade. Another was 125% rule that used a previous TPE. The last trade was a non-simultaneous trade that followed the non-simultaneous rule and created a new TPE (Francis for nothing, basically). In this case, Francis wasn't acquired with a TPE he was the trade that created the TPE.

But what if my really big multi-player trade required me to just split it up into various non-simultaneous trades that each created a new TPE.

[FGump]

You said "I wondered if a Kobe to Chicago deal could be worked out by just making separate trades that causes a TPE"

You asked "Whats stopping a teams from making 2 or more non-simultaneous trades to get around the 125% rule. "

You asked "what if my really big multi-player trade required me to just split it up into various non-simultaneous trades that each created a new TPE."

Frankly you're talking gibberish.

A trade can spin off TPE's in various directions. And so what?

Maybe you are thinking that a TPE has some sort of intrinsic value in and of itself. But except in rare instances, they really don't. All they are is a mechanism that allows a team to increase salary - and in this day and age where teams are fleeing from tax problems, no one wants to ADD salary. So when they don't use them, they just vanish. No value.

Furthermore, teams don't do a trade with the intent of creating TPE's. They do a trade to do a trade. If they create a TPE, they get one. If not they don't. And the league (not the team) structures trades to generate whatever TPE's are possible, not the teams.

[Friend_Of_Haley]

I guess I'm just surprised that when you hear about matching salaries being a hindrance in making trades that the idea of a non-simultaneous trade doesn't ever come up. I guess with the luxury tax a team isn't going to want a trade where they take on $10M of extra salary, but say when the Jason Kidd deal fell through because of Devan Georges measly salary. Is there anything that could have stopped the two teams from just saying, okay, lets leave out George (since he is just a salary filler anyways) and make 4 separate non simultaneous trades that create these 4 TPE. Neither team cares about the TPE being created and just intends for them expire in a year, but its a way around Dallas not having that couple extra million to match salary.

Now in that specific instance they were able to work out something different, so its kind of moot, but hypothetically is there anything in the CBA stopping something like that to occur.

You said the league structures trades to generate TPEs, but in Larry Coon's example of the Houston-Orlando trade it really seems as if it was Houston, and not the league that looked for a way to structure the deal split it up because it wouldn't have worked otherwise (as opposed to the recent PHX trade, where it worked either way).

I understand that TPE don't have value, and I understand a team isn't always in a position to take on salary just to complete a trade. But hypothetically couldn't a team make any trade that is agreed to on principle (but doesn't work under the 125% rule) by making an unlimited number of non-simultaneous trades that create these useless TPEs.

[Friend_Of_Haley]

To make it a less extreme example than being used in some major multi-player blockbuster deal, because its just a lot less likely.

Sometimes you'll see some casual fan come along and say something like "Hey you're team has that backup, 3rd string PG that you have no use for. You're going to let him go for nothing this offseason, but my team might actually be able to use him for the postseason run here, and I want to trade a 2nd rounder for him."

Now once this happens, some other poster comes and says, "well ya see the trade needs to fit under the 125% rule and so you need to match salaries. You're team doesn't have any expirings that can match that, and I'd rather just let him expire and save the money than take back those non expirings to match, just for a second rounder."

But in all reality, why does no one ever suggest, "hey thats cool, we'll actually have to split it up into two different deals." In one deal we are just going to give you said player for absolutely nothing. You can have him and we gain a TPE. In the next deal we're also gonna trade you our also worthless minimum contract player for your other worthless minimum contract player and the second rounder."

Its one legal non-simultaneous trade and one legal simultaneous trade that gets around the 125% rule. No one ever suggests stuff like that though.

Is this making any more sense as far as to what I'm asking?

[bgwizarfan]

^ you don't get the rule... Team A could trade away as many players as they want to Team B for technically "nothing" (or future "cash considerations" - i think we decided all trades have to be for something), but how would Team B be able to absorb all those salaries? The answer is they wouldn't.

The reason why certain lopsided trades have worked is because of one of 2 reasons:

1) The team taking on the large salary player has at least that amount in cap room (i.e. Charlotte trading Brandon Wright ($0) and taking on Jason Richardson's large contract ($9,999,999). A TPE was created for GS, and Richardson fit within the amount the Bobcats were under the cap

2) The team takign on the large salary player has an existing TPE that is at least as great as that player's salary (i.e. Seattle taking on Kurt Thomas ($8 + million) and 2 future first round draft picks ($0) for a future 2nd round draft pick ($0). Seattle had acquired a $9 + million TPE when they signed and traded Rashard Lewis to Orlando, so they used that TPE to acquire Thomas. This trade then created a TPE for Phoenix in the amount of Thomas' salary. I don't look at the ESPN trade checker, but i'd be willing to bet it has a TPE from the Thomas trade, one from the James Jones trade, and now one from the Banks trade).

So what you're describing isn't realistic unless it falls into one of those scenarios.

[FGump]

You are using terminology and creating scenarios that don't work at all. Frankly I'm having a hard time following your thinking, and I'm guessing it's because you are taking terminology from the CBA and giving it your own definition.

A NST is merely the opportunity to complete an earlier trade where you sent away a big contract, and didn't get all of your allotted salary back.

But you can't do it the other way around, where you take all, and only send away a very small portion and then make up the difference later.

For example, the Mavs can't get Kidd's 20M contract now, and then send away $5M in salary now, another $5M in 3 months, and so on. There is no such thing. If the Mavs want to take a 20M contract in trade, they have to send away 20M (within 25%) immediately.

Now NJ, who is sending away the big 20M contract, can take back 16M now, and then the other 4M later. They can even send away 20M now and take back 0, and then take the rest later if they want to. But you cant do it the other way around and send away 0, take back 20, and say "I owe you 20M, David Stern."

[Friend_Of_Haley]

Hhhhmmmm, so let me then ask about Larry Coon's example:

He says, "That left them trading Francis essentially by himself for nothing"

Was Houston therefor under the cap and was just able to take on Francis and then Orlando recieved a trade exception in return?

I think I'm starting to get it. Basically all trade exceptions that are created, at some point are the result of a trade with a team being under the cap.

[Friend_Of_Haley]

Again, taking an example from Larry Coon:

"Here is an example of a non-simultaneous trade: a team trades away a $2 million player for a $1 million player. Sometime in the next year, they trade a draft pick (with zero trade value itself) for a $1.1 million player to complete the earlier trade. They ended up acquiring $2.1 million in salary for their $2 million player -- they just didn't do it all at once, or even necessarily with the same trading partner."

So in this case does the team taking on the $2M need to be at least 1M$ under the cap? And the team trading the $2M can be over the cap and gets a TPE? Is them being over or under the cap relevant at all under this scenario?

[Dunkenstein]

^Most Serious Poster on RealGM, EVAR^

Is that really how you meant to spell EVER? Or is EVAR some planet in a galaxy far, far away?

To learn more about traded player exceptions you should really read Art V11, Sect 6 (h) of the CBA.

http://www.nbpa.org/cba_articles/article-VII_6.php

Just relying on Larry's examples can sometimes be misleading to the novice. In this section you'll learn that for teams over the cap a TPE is generated when a Team replaces a Traded Player with one (1) or more Replacement Players. A team can't just give a player to another team over the cap "for absolutely nothing".

A TPE can also be generated when you trade a player to a team that already has a TPE large enough to take the salary of player you are trading away. Lastly a TPE can be generated when a team over the cap trades a player to a team with enough room under the cap to absorb his salary, just as Golden State did when they traded Jason Richardson to Charlotte last year.

In Larry's example, the only way Houston was able to structure their side of the deal to get a TPE for Francis was because "from Orlando's perspective, it was a single, simultaneous three-for-four trade."

The only reason Phoenix was able to in essence trade Banks "for nothing" (generating a TPE) was because from Miami's perspective it was a straight trade of Shaq for Marion and Banks. Phoenix could never have traded Banks alone to Miami without needing to get player salaries in return.

[Friend_Of_Haley]

haha, yes thats how I meant to spell it. its all a part of me being a bit off in the head.

Anyways, perhaps I have relied too much on Larry Coon's FAQ and need to read the real source to understand things, and thats what led me astray.

Thanks for clearing that up for me guys. I can obviously tell I probably confused the heck out of all of you with what I was trying to ask.

So the next time I hear someone was traded for "essentially" nothing, I'll know that essential is a lot bigger than it sounds.

Thanks again though. The CBA really interests me which I why I first started reading Larry Coon's FAQ to learn more about it. So this stuff helps.

[FGump]

FOH, I think it would be helpful if you'd try to review and grasp the concept of the cap itself, before getting into the trades - and then try to understand how the simple trades work considering the cap, before diving into the complex angles.

What I think you may fail to understand is that a cap is a limit not just a number - so once a team is over the league's limit on salary, they are no longer entitled to add anyone else to their roster (even via a trade).

HOWEVER, the league also offers "exceptions" to the cap rules, and if you are over the cap and want to do a trade, you can generate cap exceptions from the players you trade away allowing you to take back players within that trade.

If you generate some extra, sometimes you are allowed to save it for later, and sometimes you aren't. Those arise from the technical structuring of trades, but frankly understanding exactly how and when that happens is going to be ultra-confusing until you get the basics down. And it's not really that important anyhow to a general workable understanding of the NBAs rules and processes.

[Friend_Of_Haley]

I think I have a fine understanding of the cap and the exceptions like MLE and BAE. I understand about BYC and PPP. I get the 125% rule. I for the most part get raises (although I was corrected on part of it earlier tonight in another thread).

Based on what I see on the trade board, I believe myself to have a better understanding than the average fan.

The non-simultaneous thing tripped me up, but I think that had to do with me not getting the wording from Larry Coon's FAQ. Like for instance Coon says, ", it was like the team had a "credit" for one year" and "That left them trading Francis essentially by himself for nothing". Put those two things together and I think its easy to see someone might walk away saying a non-simultaneous trade can allow a team to trade away a player for nothing and gain a credit (more or less). The very reason that confused me is because it goes directly against the 125% rule. So it seemed more like a loop-hole. Now that I got more explanation on it, I see that the two types of trades compliment each other, but it doesn't read that way. Thats not to be a knock on Larry Coon's explanation, because I know he is trying to make it simple, but thats how I came away understanding it. Its obviously a lot more complex and required nearly 2 pages of back and forth explanation for me to get it.

I understand you probably don't think I know a lot based on this thread, but I think I have at least the basics down, thats not the problem.