Further reading:
A 3-minute analysis of the NBA’s two-way contract FAQs
Quickly resolve the four key points of the NBA’s Bird Rights at once
What is the NBA’s 38-year-old clause? Why is it called the LeBron James clause?
Table of Contents
What are Traded Player Exceptions (TE)?
In NBA player transactions, salary balance is a necessary condition. Therefore, if one team's menu salary is higher in a transaction, the difference will become a transaction exception under the determination of the labor agreement. The team absorbs the salary of future players in future transactions, bypassing the limitations of the salary cap.
If a team trades a player with an annual salary of 12 million for a player with an annual salary of 8 million, then they will get a $4 million trade exception. Take the trade between the Mavericks and the Knicks in December 2011 as an example. At that time, the Mavericks sent Tyson Chandler (annual salary of $13.11 million that season) to the Knicks in exchange for Andy Rautins (annual salary of $790,000 that season). The salary difference between the two players was US$12.32 million, so the Mavericks obtained a multi-million-level trade exception through that transaction.
NBA official website reporter Steve Aschburner likens the trade exception to a gift card, meaning that the trade exception can "buy" a player's salary.
Duration of transaction exception
It will expire one year after the original transaction.
Key points of transaction special cases
Transaction exceptions cannot be combined and used
For example, if the Celtics want to trade LeBron James, they cannot collect various trade exceptions and form a large trade exception to match LeBron James' salary. Each player's salary can only match one trade exception.
Trade exception cannot replace salary cap
Transaction exceptions can be split into multiple parts for use.
If a team has a trade exception of 10 million, it can first use 8 million to sign players, and then use 2 million to trade. For example, the Cavaliers traded with the Trail Blazers in 2016, sending away Anderson Varejao and a 2018 first-round pick (top-10 protected), receiving a second-round pick and a $9.6 million trade exception. Five months later, they used $5.2 million of the money to give the Bulls a 520 trade exception in exchange for Mike Dunleavy.
