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The Celtics have a $10.3M traded player exception (what does that mean?)

I was told there would be no math.


When the Celtics completed The Trade sending Paul Pierce and Kevin Garnett to the Nets, according to Chris Forsberg, they created a $10.3 million "traded player exception." I'm pretty excited about getting such a valuable asset.

It isn't, however, the most straightforward thing in the world. I've gotten quite a few questions (via twitter) about what exactly it means. So I'll do my best to explain what it is we've got and the limitations on it.

Basically this traded player exception occurs when complex trades happen and one team ends up sending out more salary than it takes back in return. It is more complex than that, but feel free to consult Larry Coon for a better explanation of how these things are created. The important thing is that we've got one to use now.

Essentially the Celtics can now take back a player making up to $10.3M and not have to send any contracts in return (assuming they make additional moves to stay under the "apron" - but I'll get to that in a minute). So if a team wanted to ditch a star player for cap room and some of the slew of draft picks that we've got, we can make that happen.

Or if we wanted to add a free agent next year but didn't get far enough under the cap to offer him a deal outright, we could work out a sign-and-trade deal with the player's former team and they wouldn't have to take back any salary to help make it happen. They could get a draft pick or some kind of compensation just for accommodating the transaction. Really there's a ton of different ways that Ainge could use this flexible tool to make a bigtime upgrade to the roster.

So what's the catch? There's always a catch, right? There are restrictions.

  • You can only use the traded player exception (TPE) for one year. So they have till July 12, 2014 to use it or lose it. It could be used this summer, at the trade deadline, or even in the early days of free agency next summer.
  • You can't combine the TPE with players to bring back higher paid players. So we couldn't get a max guy by adding someone like Courtney Lee to the deal. It doesn't work that way. You can only use it by itself (or with picks). By the way, the same goes for players we just traded for - so Kris Humphries can't be part of a package deal until sometime during the season (I don't remember the exact date/timeline).
  • Here's the real kicker: Because of the Bogans sign-and-trade the Celtics are "hard capped" - which means they aren't allowed to exceed the Luxury Tax "apron" of $75.75M even if they wanted to. (The Nets and Lakers and other tax paying teams aren't restricted because they didn't do sign-and-trade deals adding money this summer) The Celtics are currently at about $71.5M so they don't have the room to add $10.3M without doing some cap clearing moves first.

Now, the Celtics could break up the TPE into smaller parts. Or better yet, they can trade players (like say Bass or Lee or even Gerald Wallace if we are lucky enough) to a team under the cap and not take salary back. The nice thing about that is it would create yet another TPE to use at some point (perhaps next summer).

I suppose a logical question here is "great, getting rid of salaries and creating fancy cap flexibility tools is nice and all, but at some point don't you have to, you know, get good players?" Yes, that's the great thing. In the not so distant future (within a year) the Celtics have incentive to use this tool to add talent to the roster. Maybe they'll do it this summer and save us the inglorious tanking process. Maybe they'll allow the current mismatched roster to flounder for half a season, secure a lottery pick, and then start picking up discarded stars at the trade deadline. Or maybe they'll simply dump as many veterans as possible this season and go into full tank mode and swing for the fences next summer.

Then again, maybe this is all just accounting mumbo jumbo and the team will simply let the TPE expire (this happens a lot because teams looking to cut costs don't want to turn around and add salary). But please don't kick sand in the face of my nerdy dreams.

For me, the net-net is that we're rebuilding right now. We've got young assets, expiring contracts, and now a nice traded player exception to use at some point in the future. That sets us up to be buyers in the not too distant future. That has me smiling and hoping for better days ahead.

Update: Here's a very good breakdown of our salary cap situation as it stands: Boston Celtics Team Salary | HOOPSWORLD | Basketball News & NBA Rumors

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