Raptors Trade Deadline Primer

The NBA trade deadline is at 3 p.m. ET on Thursday. With it comes the annual array of questions, trade hypotheticals, and exciting chatter that’s become the defining trait of basketball in early February. It’s a really fun time of year.

It’s also a complicated one. The NBA’s salary cap rules govern what teams can and can’t do in trade. Coming up with trade scenarios that are legal can get a little complex, and while it’s not fans’ responsibility to know all of these rules, the answer to “why didn’t the Raptors do THIS” is often that it may have been illegal. Even the vaunted ESPN Trade Machine has some holes.

In order to try to get ahead of some of the usual questions this time of year, what follows is an attempt at a high-level explanation at some of the restrictions facing the Raptors. If you still have questions at the end, feel free to reach out to me on Twitter.

Who can the Raptors trade?

The NBA restricts teams from trading players for certain periods of time after they’ve been signed, re-signed, or signed to extensions. Most of those restrictions are gone at this point. The only player the Raptors can’t trade is Norman Powell. Powell signed a contract extension in October, and the rules prohibit a team from extending a player and then trading him for six months. Powell, then, can’t be dealt until after the Raptors are eliminated from the playoffs.

Everyone else, including the team’s two-way players, is eligible to be traded.

Norman Powell

 

What about draft picks?

The Raptors can also include draft picks in trades, though they’re limited in which ones they can send out. They can’t trade either of their picks for the 2018 draft because they don’t have any – the Raptors traded a first-round pick and a second-round pick to Brooklyn in the DeMarre Carroll trade this past summer.

The Raptors have all of their picks in both rounds from 2019 onward. Teams can trade picks up to seven years into the future, so they could theoretically trade a pick as far away as the 2024 draft.

They cannot, however, trade their 2019 first-round pick, even though they have it. Teams are not allowed to trade their future first-round pick in consecutive years, so since the Raptors have already traded their 2018 first-rounder, they can’t trade their 2019 first-rounder. (This restriction is removed following the 2018 draft, since the pick won’t be a “future” pick any longer.)

Can they trade anything else?

Teams are permitted to include up to $5.1 million (US$) in cash in trades total during a season year. The Raptors have not sent any of that allotment out yet.

The Raptors also hold the draft rights to DeeAndre Hulett (2000) and Emir Preldzic (2009). That might sound strange, but teams have to send something in every trade, and so these are valuable chips to have just in case a trade needs to be structured in a creative way.

What are the salary cap rules for trades?

We’ll try to simplify here best we can. Because the Raptors are over the salary cap, incoming and outgoing salaries in any trade have to be fairly close. The rules are normally more complicated, but things are simplified a little for the Raptors since adding any salary threatens to put them into the luxury tax (if they’re not already in it).

For the purposes of this deadline, the Raptors can only take back up to 25 percent more salary than they send out, plus $100,000. So if they sent out a player making $4 million, they could take back a player making $5.1 million (25-percent more, plus $100,000). The Raptors can take back as little salary in a trade as they like (the matching is only required for taking on more money).

Salaries can be combined in trades, so trading two players making $4 million would let the Raptors take back $10.1 million, for example. Draft picks, the draft rights to players, and cash all have no value for the purposes of matching salaries.

Are there any loopholes?

Are there ever. The primary one is the existence of “traded player exceptions,” which are created by the differences in salaries in a trade. The Carroll trade from the summer, for example, saw the Raptors send out more salary than they took back, creating an $11.8-million exception in the process. The Cory Joseph trade created a $7.6-million exception, as well.

Exceptions can’t be combined with each other or with players to take on more salary, so while the Raptors could absorb a player into one of those exceptions, they can’t add them up to bring back one very high-priced player.

The Raptors can get a little creative in how they structure trades to take advantage of these exceptions, or to create more of them. For example, trading a $3-million player for a $7-million player violates the rules above, but trading a $3-million player in one deal and then acquiring a $7-million player with an exception is theoretically possible. There are other iterations that get more and more complicated. All of this is to say that while salary matching is difficult, there are some tools at a team’s disposal to make something happen.

Teams can also involve an extra team to help facilitate trades, either by providing additional players and picks or taking on salary to help the numbers work. Those teams usually need to be compensated for helping out.

Feels like there’s a but coming…

The luxury tax line and the “luxury tax apron” both hang over the Raptors at the deadline. Exact contract figures for players aren’t confirmed by the team, but based on thr best publicly available estimates, the Raptors are very close to the luxury tax line. So if the Raptors add salary, it will come at a financial cost – for the first $5 million the Raptors go into the tax, they’d have to pay $1.50 in luxury tax payments, and $1.75 per-dollar for the next $5 million after that (and escalating from there). Teams that pay the tax also don’t receive tax payments from tax-paying teams at the end of the year.

CJ Miles

 

The Raptors are also capped by what’s known as the luxury tax apron. In basic terms, the Raptors are “hard-capped” at $125.3 million for the year. That was triggered because the Raptors used the “non-taxpayer mid-level exception” to sign C.J. Miles this summer. Under no circumstances can they cross that salary total, even in the event of injury.

What this means is that even with the exceptions available to them or within the salary matching rules and loopholes, the Raptors can’t go over that mark. Based on the best publicly available estimates, then, the Raptors can only add about $4.6 million in salary ahead of the deadline.

Anything else to consider?

The Raptors have to have 14 players on the roster at all times, excluding two-way players. That means that if the Raptors send out two players for one, they’d have to sign someone to fill that 14th roster spot. The salary for that player will needed to be accounted for under the luxury tax apron, so simply piling up players to add more salary in a trade isn’t feasible.

How else can the Raptors improve their roster?

The trade deadline is only that: The deadline for trades. The Raptors can still add players after Thursday if they see fit. They have a 15th roster spot open, and as long as a player is waived by his former team by March 1, he’ll be playoff eligible. They can offer free agents the minimum salary or the remaining prorated amount of their bi-annual exception (which was originally $3.3 million). The Raptors still have to abide by the luxury tax apron and may have to pay tax on whatever salary they pay that player.

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