Assessing the NBA Trade Exception Market

NBA Trade Exceptions are very interesting. Let's make sure we are all on the same page first.

Q: How is an NBA Trade Exception created?

An NBA Trade Exception, as defined by NBA Salary Cap FAQ's Larry Coon in question #72, is created when an NBA team receives less salary than the salaries they traded. Basically, this will typically be created when at least one of the teams involved in the trade is BELOW the salary cap, because teams that are BELOW the salary cap "can make trades as they please." (see question #70).

Q: Once a team receives an NBA Trade Exception, what can they do with it?

They have one year to use the trade exception to trade for other players. Remember, they cannot use it to SIGN a free agent, but they can use it to trade for another player.

Q: What historical examples are there of a team using an NBA Trade Exception to acquire a player?

Very few as far as I can find. I've done my best to find historical examples of a team acquiring a trade exception. Google helped me piece together the following history of NBA Trade Exceptions (though there are other examples), but in very few of the cases did the team acquire anyone with the exception!

1994 - Milwaukee Bucks get $1.6 million trade exception... do not believe they ever used it.
2000 - The Pistons get $4 million trade exception for Cedric Ceballos... but do not believe they ever used it.
2001 - Dallas acquired a $3.2 million trade exception... and tried to get Tim Hardaway with it but obviously that never materialized.
2005 - Boston acquires a $5 million trade exception in complicated 5-way Antoine Walker trade... but never used it.
2006 - Pacers acquire a $7.5 million trade exception for Stojakovic... but never used it.
2007 - Blazers acquire a trade exception for Zach Randolph trade... and they USED IT to help acquire James Jones and a draft pick which became Rudy Fernandez on draft day.
2007 - Sonics/Thunder get $9.25 million trade exception for Rashard Lewis... and used it to acquire Kurt Thomas... but then they traded Kurt Thomas a few months later to net Francisco Elson, Brent Barry, and a 2009 first round pick (which became Rodrigue Beaubois, but the Thunder traded for BJ Mullens, one of OkCity's dumbest moves).
2008 - Denver acquires a $10.1 million trade exception for Camby... but never used it.
2009 - Blazers get $3 million trade exception for Ike Diogu
2009 - Orlando got one last year in the Turkoglu trade... but it expired within a year and they never used it.
2009 - The Clippers get a $7.3 million trade exeption for trading Zach Randolph... and they USED it to acquire Rasual Butler during the season.
2010 - Jazz get a $6.5 million exception for Matt Harpring, and $2.7 million exception for Ronnie Brewer... and have never used it.

***Note: There are many more trade exceptions that have been created. This link contains pending trade exceptions. It's interesting how many more trade exceptions there are!

Q: Which teams have just netted large trade exceptions?

Which brings us to right now... where suddenly 3 teams have $16 million trade exception and one team has a $13 million trade exception (and the Wizards still have $10.6 million in trade exceptions).
2010 - Utah gets $13 million trade exception in Boozer deal
2010 - Phoenix gets $16 million trade exception in Stoudemire deal
2010 - Toronto gets $16 million trade exception in Bosh deal
2010 - Cleveland gets $16 million trade exception in LeBron deal
Feb 2010 - Washington gets $6 million trade exception for Brendan Haywood and $4.6 million trade exception for Drew Gooden.

Q: What types of players are likely to be acquired with the four current large exceptions?

Rationally, only teams in financial trouble would give up players to either Utah, Phoenix, Toronto, Cleveland, or Washington. However, with the NBA about to go on strike next year, and the cap likely to be much lower, it is also possible that teams may unload players who have at least 2 or 3 years at a hefty price. I think it also is likely that there would be more sellers once the season starts and certain teams are disappointed about their chances to compete. Remember, the team giving up a player is basically shedding salary as they would only receive the "Trade Exception." Of course, Utah, Phoenix, Toronto, Cleveland, or Washington could throw in other draft picks or players to sweeten a deal.

Nonetheless, early indications from the fiery Cavs owner is the the Cavs are looking to aggressively get someone now for the $16 million trade exception. Here are the players I think are most likely to be available to be traded to either Utah, Phoenix, Toronto, Cleveland, or Washington:

1) Charlotte - DeSagna Diop - this depends on whether the Bobcats unload Tyson Chandler. Currently, the Bobcats have Chandler, Nazr Mohammed, and Diop. Diop is due 3 more years at $7 million, so would be the likliest candidate.

2) Dallas - Shawn Marion - I have no idea who would want 4 more years with the last year at $9 million for the aging Shawn Marion! But he would be available, no doubt!

3) Detroit - Rip Hamilton - 3 more years at $12 million each. He's very old, so I doubt anyone would want him.
Ben Gordon - 4 more years with the last at $13 million. I think Joe Dumars could admit his mistake and get rid of him!

4) Golden State - Andris Biedrins - 4 more years at $9 million each. Golden State would gladly dump their big-man, as they are in big financial trouble and he's had lots of injuries.

5) Houston - Trevor Ariza - 4 more years at $7 each. They already regret last year's signing, as Ariza is not that efficient.

6) Clippers - Chris Kaman - 2 more years at $12 each. The Clippers are unpredictable... and though they could contend, they are just as likely to dump out Kaman.

7) Minnesota - Al Jefferson - 3 more years for $45 total. To get Jefferson, other assets must also be given.

8) Hornets - Okafor - 4 more years for $60 total. Okafor is probably not available until the middle of the season, if the Hornets realize they are not in contention. They are trying to keep Chris Paul happy at the moment and pretend that they are contenders.

9) Magic - Gortat - 4 more years at $7 each. Probably need to give up other assets to get Gortat. The Magic drafted a big man from Kentucky, so they be more likely to take some financial savings.

10) 76ers - Elton Brand - 3 more years for $50 total.
Igoudala - 4 more years at $14 each. The 76ers would gladly dump either or both so they can begin to start over. Would need to give up other assets probably, but not equivalent value.

11) Spurs - Tony Parker - 1 year at $13.5. Supposedly, the Spurs are willing to dump Tony Parker almost immediately to get cap space right now. The window on this may have already closed though, it is unclear. Supposedly, they are signing super-euro prospect Tiago Splitter and then want to get other free agents.

12) Raptors - Jose Calderon - 3 more years $9.5 each. The Raptors have Jarrett Jack and would probably just use him, since Calderon is one of the worst defensive PGs in the league.

13) Wizards - Gilbert Arenas - 4 more years at $17, 19, 21, and $23!!!! I'm listing him because I know without a doubt that he is available!