Didn't the McGrady Trade Create an $8mil TPE?

[ecuhus1981]

Hey all, Nets / Mavs fan. I was just thinking about the deadline trade Morey executed. I know you guys are sore about losing Landry, but you gotta give to get, and you guys got ALOT. Kevin Martin may not be the defensive ace you guys are used to having on the wings, but as a naturally gifted scorer, he take the pressure off of role-players like Brooks, Scola and Ariza, who have seen their production increase this year, but their efficiency decrease. I can't sum it up any better than to say that I wish Morey was the GM of either of my teams. You'll like the results you get in a few weeks once your rotations gels, but you'll absolutely love this deal in a couple of years.

ANYWAY, I was thinking today about the components of the deal, form a financial perspective. It got me wondering: did everyone overlook a very valuable asset in this deal? That asset is of course a traded player exception, also known as a TPE. For those of you who aren't familiar with the term, the Rockets sent out around $27mil in '09-'10 contracts (T-Mac, Landry and Dorsey), and only received $19mil in return (Martin, Hill and Jeffries). The immediate effect is that it took Houston under the luxury tax, saving millions of dollars for the franchise. But it also means that IF the Rockets so choose, they can acquire a player worth up to $8.1mil anytime before next year's trade deadline (TPEs last one calendar year). You never know who will be in dire financial straits 12 months from now, but teams like OKC have benefited greatly over the last few years, just by "absorbing" excess salary from other teams. The Kurt Thomas trade yielded two 1st-round picks form PHX (Kerr is so dumb), and the recent Harpring trade netted the Thunder a recent 1st-round prospect (Maynor). What if the Suns put Barbosa up for sale? No one could offer the immediate financial relief that you could, and you would be in the driver's set to net a great 6th man "for free".

Just spitballin'. Let me know what you guys think, and good luck in the playoffs this year (unless you meet Dallas! ).

[x-]

No it didn't.

You only get a trade exception if it's a single player trade.

Teams can include cash or draft picks in such a deal, but it has to be a single player trade. You could also trade a pick for a player without sending a player back if you're under the cap, which would also create a TPE.

[KiDdFrESh]

I believe the Rockets got a 4.4 million exception. You forgot to factor in Hilton Armstrong. He too was received in the deal.

[xingjianma]

I'm pretty sure that Trade Exceptions are only created when it's a one for one trade, and can only be used on a single player.

[TMU]

I'm pretty sure that Trade Exceptions are only created when it's a one for one trade, and can only be used on a single player.

This trade was probably a collection of one-for-one deals reported as one package deal.

[Teckon]

The deal is:

Rockets incoming salaries are $2.8M + $6.4M + $9.6M + $2.4 = $21.2M
Rockets outgoing salaries are $22.8M + $ 3 M = $25.8M

25.8/21.2 = 1.21 => within 125%. No trade exception created.

[tisbee]

Looking over the players involved it's hard to see a big TPE being generated for Houston.
TPEs are generated when a single player is traded and the team gets lesser salary/salaries back.
Esp since Sac evidently got a TPE out of deal big enough to acquire Dominic McGuire's $825,000 contract.
The trade prob broke down into several trades.

First:
Dorsey to Sac using their cap space.($881,000 TPE for Hou)
Landry to Sac for Armstrong.

Then the big 3 team trade
McGrady to Knicks
Martin to Hou,Rodriguez to NY for their Q-Rich TPE(generating a $1.5mil+ Sac TPE)
Jeffries,Hill to Hou,Hughes to Sac.
Sac sends out @ $11.2mil,takes back @$ 13.6mil
NY sends out @ $22.5mil,takes back @ $24.5mil
For Hou,McGrady is traded for Hill,Jeffries,Martin. @ $22.8mil out,@ $2.5mil + $7.4mil(trade kicker) + $9.7mil.
Thus Hou would get a TPE of around $3.2mil.

(And yes,I've been looking at various permutations since I read the original post Fri afternoon. My version hinges on Sac having enough cap room to accept Dorsey,but I'm not positive about that. Looking at Sac's pre-trade salaries they seem to be @ $70,000 short,but if the published salaries I found have some fudge in them,it works.)

[Royal Zephyrus]

The deal is:

Rockets incoming salaries are $2.8M + $6.4M + $9.6M + $2.4 = $21.2M
Rockets outgoing salaries are $22.8M + $ 3 M = $25.8M

25.8/21.2 = 1.21 => within 125%. No trade exception created.

That is incorrect. Any unbalanced trade WITHING the 125% creates a TPE. Anything OUTSIDE the 125% requires a TPE(or pure raw cap space) to balance the trade salaries.
Since the is 4.6 million in your equation, the Rockets do in fact receive a 4.6 million TPE as the Kings were under the salary cap and absorbed a lot of salary in the deal.