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Barkley's Mouth is all about the NBA as we speak on what's going down in the Association today and what should be happening down the line.  It's all about the glory (and disgrace) of the NBA. Our style is down, dirty, honest, and entertaining, just like Charles Barkley himself. Thanks for peeping what we throw down!

Editor - Matt Satten
Writer - KneeJerkNBA
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Knee Jerk NBA


KneeJerkNBA - Portland, Oregon.  Hoops fanatic since Bernard King was dropping 50s.

Check out his blog here.
Trade Exceptions -- The What and How
Written by Matt Satten   
Tuesday, 13 July 2010 08:33

Since the term trade exceptions has been brandished more times in the last week than the phrase "take my talents to South Beach" and there are so many questions about it, I wanted to take a moment to break down where it comes from. I'll use the hot Al Jefferson to the Utah Jazz rumor as one example of how to use the trade exception.

Trade exceptions -- They get created basically out of thin air in sign-and-trades, which is the only reason you see these teams doing them. Trade exceptions were created by the NBA as a way to provide compensation for losing a free agent, similar to what MLB does with compensation draft picks for Type A and Type B free agents and similar to what the NFL does with draft picks surrendered when a player with the "franchise" tag is signed by a new team. Once it's announced that a player is going to sign with a new team, the old team is given 48 hours to work out a sign-and-trade deal. This allows them in the future to trade for a player(s) whose salary is equal to the guy they lost without having to give contracts/players (is there a difference in the NBA these days when you're talking trade?) in exchange. If not used, the trade exception expires exactly one year after it was created.

More info after the jump, including some info about LeBron's trade exception...

So the team that gets the exception (in this case, Utah) got it by doing a sign-and-trade with Chicago when the Bulls indicated they would sign unrestricted free agent Carlos Boozer. The Jazz basically signed Boozer to a 6-year deal (up one extra season from the max of five years courtesy of his Bird rights) and sent him with a second-round pick to Chicago for a $14 million trade exception--the total amount Boozer will make in his first season with Chicago. Turning my back on another franchise. Hahaha!Utah can now acquire Al Jefferson by using this trade exception (to cover his salary for the 2010-11 season) in a deal with Minnesota and not have to give them contracts/players back. Dallas--the team originally yearning for Jefferson before Utah got involved--doesn't have a trade exception so they have to send salary/players (Erick Dampier, etc.) back to Minnesota, who doesn't want that junk but just wants the cap space and multiple draft picks.

Each sign-and-trade is different as the two teams have to agree on the compensation. In the aforementioned case, Utah sent a pick with the trade exception, which usually isn't the case. In fact, it's usually the other way around as the team that's losing the free agent usually has to give up something extra to get the trade exception because otherwise they'll get nothing if the free agent signs outright with the new team

For example, lost in all of Dan Gilbert's rage is that Cleveland made out like a bandit in the LeBron James deal, getting two first rounders, the right to swap first-rounders in another year, two second-rounders and the $14 million trade exception--all so LeBron could get a sixth year (which I don't think he'll ever see, since his greedy side figures to opt out early). The Heat really got bent over hard by LeBron and Chris Bosh. Bosh's sign-and-trade required two first-rounders going back to the Raptors and another $14 million trade exception. The trio thinks they are being shrewd and says it's not about the money, that they're being unselfish, however, if you need a sixth year instead of just five and a couple of extra percentage points for your seasonal raises by being part of a S&T (fancy shorthand for sign-and-trade) when it costs your team all of these assets--inexpensive assets at that considering their first-round picks should be in the 20s and not in the lottery--how smart have you really been if you really want to win a ring, let alone seven as LeBron boldly declared???

Also, wave bye-bye to Paul Millsap's starting gig. It was a fun idea for fantasy leaguers for the week that it lasted.


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Comments (11)Add Comment
...
written by KneeJerkNBA, July 14, 2010
Excellent post, Matt. Very informative. And nice to see back in action.
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written by VP, July 15, 2010
Hey Matt, nice article as always. Do you think Milsap will lose his spot? I think its the aging Okur who will come off the bench once Okur fully recovers from his injury.
...
written by Satten, July 23, 2010
VP,
I think Okur is going to have a tough time coming back from that Achilles injury on time. I do think Sloan wants him to start when he's ready though since 1) he'll be warmed up instead of sitting on the bench to start the game and 2) he keeps things pretty consistent over the years and this was working for him. I can see using Okur to stretch the floor as a sub due to his outside prowess, but Millsap and Big Al are VERY SIMILAR players and that could make it hard to have both in the frontcourt together. That being said, I do anticipate them both starting (Al at C) to open training camp and the season so the experiment could and probably will last if they are both producing and more importantly playing D. I can't see Okur's D improving, it will probably decline in fact, so Millsap might get even more time.

KneeJerk -- thanks for the love. The bball season is almost here and i'm pumped!
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