Capology, the science of Salary Cap in NBA: how the trade work

In the NBA world, make one trade Among teams it is never a simple 1: 1 exchange between players. Behind each negotiation is hiding a regulated and sophisticated system which involves salary rules, contractual exceptions and temporal constraints.

The NBA trade must in fact respect the rules imposed by Collective Bargaining Agreement (CBA)with the aim of guaranteeing equity between teams and protecting the integrity of salary cap. In this article we try to explain how the trade work and because some that “on paper” seem feasible in reality cannot be put into practice.

Wage match in NBA: what it is and why it is important

Il matching salariale It is one of the most important rules in the NBA trade. It serves to ensure that, in an exchange, the teams involved they no longer acquire salary than they give in itexcept specific exceptions.

Team under the Salary Cap

The NBA teams that are under the salary cap They have greater flexibility in the trade. In particular, They are not subject to the rigid wage matches rules who are worth for those who are above chap. If a team is Under the Salary Capcan absorb more salary than it givesas long as you stay under the cap even after the trade i opt theto draw the free space to fill the difference.

IL SAFE Matching Back to play When a team under the chap receives more salary of how much its wage space allows. In this case, must add outgoing players or, if he has, use exceptions for balance the exchange according to the standard rules.

The teams under the CAP are often used as “dumping spot”or destinations to free salary because they can absorb uncomfortable contracts In exchange for future choices or young prospects.

Team above the cap

For those above the wage limit, the NBA places very rigid stakes on exchanges:

• If a team receives wages up to 6.5 million dollarscan receive Up to 175% more than the salary sold plus $ 100 thousand;
• If he receives wages among the 6.5 million and 19.6 millioncan receive Up to 5 million more than it gives off;
• beyond i 19.6 millioncan receive Up to 125% more than it gives off, plus 100 thousand dollars.

Aggregation of contracts

Another key rule concerns theContract aggregation: When a team tries to combine multiple players in a trade to “equal” the value of one player of the other team. Also in this case there are some stakes to be respected for those who pass the salary cap:

• they cannot aggregate Contracts just acquired via trade in the next UBA trade for 60 days;
• They can aggregate contracts in a single trade always respecting the wage matches rules.

Trade Kicker, when the trade earns the player

Il trade kicker It is a contractual clause that rewards the player When it is exchanged. In practice, it is a bonus automatically activated at the time of the trade. This is a parameter that leaders must consider whenever they want to baste an exchange because this Bonus can go up to 15% of the remaining salary And, consequently, it increases the wage amount that will be added to the Salary Cap. In addition, if this bonus blows up all the mechanisms of wage matching, it will not lead to the success of the negotiation.

Real example

In 2017, the contract of Kevin Love provided one trade kicker which would take place in case of exchange. This, in addition to making it more difficult to exchange the player, obliges the teams interested in considering this Bonus NEL Matching Salary.

Base Year Compensation (Byc): the trap of recent renewals

The Base Year Compensation (BYC) It is a residual rule of the Collective Bargaining Agreement (CBA) introduced for prevent contracts from being artificially inflated To facilitate exchanges. It is no longer formally present in the legislation since 2011, but survives in a very important exception: le sign-and-trade.

The clause is activated only if all the following conditions are met in a sign-and-trade:

• The player is a Bird, Eraly Bird free agent;
• The company one contract greater than the minimum wage;
• The new contract has an increase greater than 20% compared to the previous one;
• his team It is already above the Salary Cap immediately after the renewal

This rule was introduced by the NBA to prevent a team from signing a player with a swollen salary and then exchanged it. Of facts, the rule provides that the value for wage match is half of the new salary o The last previous salarydepending on the case.

This, in practice, leads to complicate negotiations as The player’s exchange value is lower to what he actually earns, making it difficult to make ends meet.

In fact, it is defined as “trap” because apparently logical trade become unrealizable and, often, forces the teams to explore complex solutions to remain in the parameters of wage matching, or wait for the end of the periods of time restriction to start the negotiations.

Why are some NBA trade “on paper”?

When it comes to “paper” trade, reference is made to negotiations that theoretically They satisfy all contractual conditions and seem perfectly balanced between the teams.

However, Not all these trade are actually achievable In the real world NBA, due to the rigid rules imposed by Collective Bargaining Agreement (CBA). Let’s try to make a list of the reasons why a trade is not feasible:

• incorrect wage matchingthe fundamental rule in the NBA trade is that, for the teams above the Salary Cap, the wages of the players exchanged must respect precise equivalence percentages. If the salary match does not respect the limits imposed (generally 152% more than the sold salary and 100 thousand dollars), the trade cannot be approved;
• Byc and traps on renewalsas previously explained, in some sign-and-trails with contractual increases of 20% greater and teams above the CAP, the player’s “outgoing” value is calculated differently than the incoming, creating a imbalance that makes the trade impossible to balance “On paper”;
• trade exception non aggregabiliTrade Exception (TPE) are tools that can only be used individually. They cannot be combined with each other or with salaries of players to reach the necessary wage matching. If the trade requires TPE aggregations to balance, it will be blocked;
• Restrictions on temporary exceptionsif a team is under the Salary Cap, it can use the space to acquire a player up to the limit, but he cannot overcome it. A trade that involves overcoming the CAP without using valid exceptions will be blocked;
• restrictions related to players just signedplayers signed through exceptions such as the Bird Rights, Early Bird or with a recent renewal can be subject to restrictions that prevent being immediately exchanged, thus preventing some trade “on paper”.

Collective Bargaining Agreement exists to maintain competitive balance in the NBA and prevent strategies that can get around the Salary Cap or create contractual imbalances.
For this reason, even if a trade seems “right” on paperall the compliance checks must pass to the rules. If it does not exceed them, it is blocked.