An explainer for the Traded Player Exception
One of the more confusing CBA tools is the traded player exception. I want to help you understand what it is and how the Mavericks might use it. At the end, I’ll also give my prediction for if they actually will.
What do I need to know about the Traded Player Exception the Mavericks have?
Also: What is a Traded Player Exception (TPE) and how big is the one the Mavericks have?
A TPE is created for a team when they trade a player into another team’s salary cap space or an existing TPE.
It can only be used to absorb a salary up to $100,000 more than the TPE amount. The Mavericks have a $10,865,952 TPE that expires June 27, 2022.
What can it be used for?
The TPE the Mavs have was created in the Josh Richardson trade and is the exact size of Richardson’s 2020-21 salary ($10,865,952). So, any player with a 2021-22 salary up to $10,965,952 can be acquired using the Richardson TPE without any salary having to be sent the other way.
If it is used to absorb a salary it reduces in size by that salary amount. So if it was used to absorb a $5,000,000 player the Mavs would still have $4,865,952 left in the TPE. In fact, the TPE Boston used to acquire Richardson was created when Boston sign-and-traded Gordon Hayward to Charlotte. Boston used that TPE to absorb Evan Fournier from Orlando and then Boston used the remainder on Josh Richardson.
What can it not be used for?
It CANNOT be combined at all. Seriously… at all. This is the number one-way people misunderstand TPEs.
In other words… NO, the Mavericks can’t add the TPE to Dwight Powell in order to acquire a $21,000,000 salary.
Teams also cannot sign anyone to a contract using the TPE. It is only for trades and not for signing free agents.
Who can they NOT acquire with the TPE?
Because the TPE expires BEFORE the new 2022-23 financial year there are players who are ineligible to be traded. Trades made after a team’s season ends and before the new financial year can only involve players who have contracts that extend into the next season without any team or player options. That makes free agents like Serge Ibaka and Jeremy Lamb ineligible. And it also makes all players with unexercised team or player options in the 2022-23 season ineligible.
Players that cannot be acquired with the TPE (unexercised 2022-23 contract options)
- Bobby Portis (PO)
- Nicolas Batum (PO)
- Ivica Zubac (TO)
- PJ Tucker (PO)
- Patty Mills (PO)
- Pat Connaughton (PO)
- Jeff Green (PO)
A quick explanation: the player (or team in the case of Zubac) COULD agree to pick up the option. This is exactly what happened when the Mavericks traded Josh Richardson to Boston last July.
Agreeing to pick up the option doesn’t seem likely in the case of Portis or Batum because their options are clearly under market value. The others are possible but it is a potential roadblock. JaMychal Green just opted into his 2022-23 player option to facilitate a trade to Oklahoma City.
Who CAN they acquire with the TPE?
- Larry Nance Jr
- Richaun Holmes
- Derrick Favors
- Alec Burks
- Royce O’Neal
- Cedi Osman
- Juan Hernangomez
- Justin Holiday
- Jaxson Hayes
- Garrett Temple
- Forkan Korkmaz
- PJ Washington
- Jarred Vanderbilt
- Terrance Davis
- Georges Niang
What’s a reason NOT to add salary using the TPE?
The Mavericks are very bullish on re-signing Brunson and will, therefore, be DEEP in the luxury tax. So, if hypothetically the Mavericks use the TPE on Derrick Favors and his $10,183,800 salary for 2022-23 then the tax bill gets out of hand quickly. After re-signing Brunson the Mavericks will potentially be $20 million over the tax line. At that point the Mavericks would owe $45 million in luxury tax. Add $10 million more in the form of Derrick Favors and it goes to $85 million in tax. $40 million in luxury tax for Favors just isn’t realistic. And then you add a player you sign at the Taxpayer MLE at $6.392 million and the bill goes to over $116 million!
So, the hypothetical (PLAYER X) another team is willing to send us to absorb into our TPE… that (PLAYER X) would need to be worth multiples of his salary? I just don’t find that too likely.
Is there any hope Dallas uses the TPE?
A couple situations could come up where the Mavericks do use the TPE on draft day.
- With salary cap at a premium a team this offseason, it’s possible another team could contact the Mavericks to use our TPE as a place to dump a player along with an asset. Being on draft day the Mavericks could dangle the TPE for (bad contract+pick) to specifically target a player they like in the draft. This would have to be serendipitous to accually become reality.
- If the Mavericks find a potential difference maker who fits in the TPE size, I could see them making it a bigger trade. They could absorb the player while also sending a pick or maybe Josh Green on the side. The salary going out would lessen the incoming salary’s luxury tax impact.
It’s most likely that the Mavericks do NOT use the Josh Richardson TPE unless it’s for a smaller salaried player. If it is used on a bigger salary I could see Richaun Holmes and Larry Nance Jr. as potential fits that would be worth the big bump in luxury tax. Or the Mavericks would include a small salary going back in a parallel deal to lesson that tax bump.
Traded Player Exceptions are a bit tricky. They can be valuable but how valuable often depends on other team’s situations. Let’s see if the Mavericks can use this TPE to their advantage before June 27th.