Due to the complexities of maneuvering around the NBA’s salary cap structure, it’s up to general managers to get creative in acquiring players while maintaining flexibility. That was certainly the case when Bob Myers and Co. received Andre Iguodala and Kevin Murphy in a three-team deal with Denver and Utah that sent Andris Biedrins, Richard Jefferson and Brandon Rush to the Jazz.
When word of the Iguodala deal first hit the Twitterverse, it seemed as if the Warriors cleared the necessary cap space to sign Iguodala outright as a free agent in a previously rumored trade with Utah, essentially paying the Jazz in draft picks to gain enough wiggle room below the $58.679 million salary cap for 2013-14.
It’s a “soft cap,” which means that $58.6 million figure can and for most teams will be exceeded, but by going over the cap, teams are left to rely on exceptions, draft picks, trades and minimum contracts to fill out the roster. In other words, they are no longer able to outright sign a free agent without the help of an exception. Since most teams do exceed the cap, the real number they try to stay below is the luxury tax level of $71.748 million, at which point player acquisitions are severely restricted and teams are punished financially for exceeding that apron.
But by combining the deal to include Denver in a sign-and-trade (the same means by which the Warriors acquired David Lee from the Knicks three years ago), the Warriors never actually dipped below the $58.679 million mark, allowing them to maintain the Non-Taxpayer Mid-Level Exception (worth $5.150 million), whereas dipping far enough below the soft cap of $58.679 million would have left them with only the Room Mid-Level Exception (worth $3.183 million).
What’s more, using the Non-Taxpayer Mid-Level Exception allows the Warriors to maintain their ability to use the Bi-Annual Exception, which is worth $2.016 million and can be used to sign a player to up to a two-year contract. Had the Warriors dipped below the cap and had only the Room Mid-Level (or had they been over the tax apron and been forced to use the Taxpayer Mid-Level), this exception would no longer be available to them.
The sign-and-trade of Iguodala also gives Golden State, still over the salary cap, the option of acquiring another player via a Traded Player Exception (TPE). Because the Warriors sent out more salary than they received in the trade, they now have a TPE equaling the difference between the salary sent out and received, which can be used to acquire any single player from another team whose cap number is of equal or lesser value to that TPE. The Nuggets also received a TPE in the deal (which netted them Randy Foye from Utah), while the Jazz had the necessary amount of cap room to absorb the incoming salaries in the trade without going over the cap.
All told, the sign-and-trade deal, rather than an outright free agent signing, allowed the Warriors the ability to use a more valuable Mid-Level Exception, maintain the use of their Bi-Annual Exception and receive a Traded Player Exception, all key tools for an over-the-cap team to acquire more goods. Surely, NBA salary cap guru Larry Coon will be able to correct us on any inconsistencies above.
Oh, and if it wasn’t clear, the Warriors also received Andre Iguodala, who has been both an All-Star and All-Defensive Player in the last few seasons.