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Dare the Trail Blazers Use their Trade Exception?

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They generated a substantial trade chip by moving Allen Crabbe last summer. Depending on the nature of the deal, they might not have room to use it.

NBA: Cleveland Cavaliers at Memphis Grizzlies Justin Ford-USA TODAY Sports

The Portland Trail Blazers need to add talent if they’re to compete with the Golden State Warriors, Houston Rockets, and other elite NBA teams. The Summer of 2018 is fast approaching and the Blazers will be among several NBA franchises hoping to make good in free agency. Portland’s famously-fried salary cap situation will prevent them from chasing significant free agents outright, but they also have a $12.9 million cap exception sitting unused, ticking towards its one-year expiration date in late July. One Blazer’s Edge Mailbag reader wants to know if the Blazers could employ that exception in a sneaky sign-and-trade move for guards Tyreke Evans and/or Rodney Hood.

Here’s the question:

Dear Dave,

In a tight FA market, decent players (shooting wings) may not get the size offer they are looking for. I am thinking of Rodney Hood and Tyreke Evans. Let’s say that the best they get on the FA market is $42M ($14M/yr for 3 years, which would be a lot for them). Could the Blazers engineer a sign and trade with Memphis or Cleveland with Evans or Hood in which their contract was $12.9M the first year and $16M the last two years ($49M over three years)?

Setting aside how far this would put them over the cap, and the theoretical value of these players, would this be legal?

If this is ok, then if these players get FA offers less than $12.9M ,, this would obviously work.

If Paul Allen feels the team is close, I could see him signing Nurk and a player like this. Assuming these are the only two signings, the bench would then include Collins, Meyers, Turner, Harkless, Swanigan, the first round choice, Layman, and someone on a vet minimum.

Sebastian T

Technically yes, a Traded Player Exception (the exception the Blazers generated in the Crabbe deal) can be used to receive a player in a sign-and-trade deal. After all, the second verb in that phrase is “trade”. Before you get your hopes up, there are several issues with your proposal besides that.

The most critical is that any team receiving a player via sign-and-trade invokes the Luxury Tax Apron. This bit of CBA arcana is often forgotten because teams seldom approach the level at which it triggers, but Portland is right there.

The Cap System

Most folks know that as a team’s cap number rises, their avenues for trading signing players constrict. Teams below the salary cap operate freely, signing and trading anybody they can get their hands on. The salary cap line imposes restrictions, preventing big-market teams from scooping up contracts willy-nilly. The luxury tax adds financial penalties for those who get too far above the tax line. Chronic violations of the tax threshold bring higher penalties via the “repeater” designation.

Even with all this, the league envisioned the possibility of owner Billionaire Bob rubbing his hands together with an evil chortle, saying, “Mwahaha! Tax me all you want! What does it matter when I’m generating huge mounds of iCash and BitDough every year!” This would put other, saner owners at a disadvantage. So they instituted the Apron, which is the owners’ way of saying, “Dude, even for us this is too far. Put down the checkbook; you need an intervention.”

The Restrictions

The Apron sits $6 million above the luxury tax line, give or take a few percentage points. Teams that reach it, or would reach it if they completed a proposed deal, find their use of certain cap maneuvers limited. Receiving a player via sign-and-trade is one of those maneuvers. This impacts our proposed moves.

  • Teams may not receive any contract in a sign-and-trade deal that would push their cap number over the apron.
  • Once a team receives a sign-and-trade player, the apron becomes a hard cap ceiling for the rest of the year. Even if the sign-and-trade itself didn’t take them past the apron, the team cannot take on any salary obligation through later moves that would send them over. Yes, that means any move...

They cannot re-sign their own guys

They cannot buy McDonald’s fries

They cannot sign another vet

The dudes they’ve got are the dudes they get

  • This hard limit prevents a team from cheating the system by making a sign-and-trade deal first, then re-signing all their own free agents or making other deals that could take them over the apron later. If you receive any player in sign-and-trade, the apron is your budget.

The Effect on the Blazers

Right now the minimum salary the Blazers are obligated to in 2018-19 is $110.5 million. That’s with no restricted free agents re-signed (Jusuf Nurkic, Shabazz Napier, Pat Connaughton), assuming Ed Davis and Jake Layman are jettisoned.

The NBA salary cap projects at $101 million next year, putting the luxury tax threshold around $121.5 million and the apron in the vicinity of $128 million. If the Blazers accept a player via sign-and-trade, they may not spend more than $128 million, period.

Adding Hood or Evans at $13 million would leave the Blazers around $123.5 million IF they did not retain any of their own free agents. That’d put them roughly $4.5 million short of the apron. You’d think they could fit a one-year qualifying offer in that space—Nurk’s is only $4.1 million—but...

Even with the signing, Portland would be below the minimum roster number of 12 players, and cap holds would be charged for the un-filled slots, eating into that $4.5 million. Plus existing player contracts could weigh heavier against the cap (for these purposes) because of more arcana about unlikely bonuses factoring into tallying for teams at the apron when they don’t normally. In short, that $4.5 million wouldn’t really be usable. Meanwhile they’d still have only 9 players on the roster, with no way to acquire anyone else making more than bare minimum salary.

Given this, it’s probably not possible for the Blazers to offer $12.9 million in a sign-and-trade deal in the first place. Even using a significant amount of the trade exception via sign-and-trade would require them to renounce cap holds on Nurkic, Napier, and Connaughton, plus cut Layman before the deal was made. In effect, they’d lose 5 players from this year’s squad to gain that one, plus the 10th-12th players they brought on to fill the empty salary slots would have to make peanuts. After that they couldn’t make any moves that increased their salary obligation for the entire rest of the year.

That’s one heck of a straight jacket. I don’t see any scenario in which the Blazers jump into a situation like that to get Evans or Hood.

The Players

Just in case somebody else might—one could argue the Blazers will lose all five of those players anyway—here’s a brief assessment of Evans and Hood in Portland:

  • I love what Evans has done with his game—particularly distance shooting—and it’s tempting to see him as the ultimate third-guard option. Were the team not so gummed up financially, I might even be convinced to down a couple extra-large martinis with @KellyAuCoin77 and consider it. But Evans is still not a great defender and he functions best with the ball in his hands, using tons of possessions. Damian Lillard, CJ McCollum, and Evan Turner all need the ball too. There isn’t room for Evans and the current guards on the court unless the Blazers sit Turner permanently. They cannot afford to do that from a financial or chemistry standpoint.
  • Hood is younger and I believe he’ll turn out to be a better defender than Evans, but Hood plays shooting guard, not the three positions that Evans plays. As soon as he went to Cleveland from Utah, his touches dropped. So did his rate of production. He seems to need the ball in his hands as well. I was fine with Hood at a cheap price as an experiment, but expensive Hood suffers from the same drawbacks as Evans, with more limitations. (Fun fact, a player who’s accepted an offer sheet as a restricted free agent cannot be signed-and-traded, another hurdle for this proposed deal to jump.)

Survey Says...

Though I like both of these players and would be intrigued to see such a deal go through, practical considerations are almost certainly going to scuttle hope of the Blazers acquiring anybody through a sign-and-trade. It’s not just tolerance for risk and cash outlay; Portland has now reached a level of expenditure that the league will not leave unfettered. Because of those restrictions, the cost of any sign-and-trade will outweigh its benefit. This is probably true of any trade involving that trade exception unless the Blazers dump salary first, but sign-and-trades are particularly problematic.

Thanks for the question, Sebastian! Everybody keep them coming to blazersub@gmail.com!

—Dave / @davedeckard / @blazersedge / blazersub@gmail.com