Q&A about the Celtics new Disabled Player Exception for Danilo Gallinari

The Boston Celtics have been granted a Disabled Player Exception (DPE) for Danilo Gallinari, per Shams Charania of The Athletic:

The actual amount of the DPE Boston will get for Gallinari is $3,239,500. Boston will have until March 10 to use the DPE to acquire a player, with several restrictions.

How much is the Disabled Player Exception worth?

When a DPE is granted, the team acquires an exception that is one-half of the injured player’s salary, up to the equivalent of the Non-Taxpayer Mid-Level Exception.

Gallinari’s salary for 2022-23 is $6,479,000. That means Boston’s new DPE for Gallinari is for $3,239,500.

What are the Disabled Player Exception rules?

• Expires March 10 or when used or when the injured player returns, whichever comes first
• Can be used to acquire one (1) player on an ending (expiring) contract without options
• Can be used to sign one (1) player or trade for one (1) player or claim one (1) off waivers
• If a player is signed using DPE, the deal can only be a rest-of-season contract
• Salary for player being acquired via trade or waiver claim must fit within the DPE amount
• The DPE is a cap exception, but NOT a roster exception. Teams must have an open roster spot to acquire a player via the DPE.
• The Celtics receive NO cap/tax relief with the granting of this exception Gallinari’s full contract of $6.5 million remains on the cap sheet for this season.
• The DPE can NOT be aggregated (combined) with any outgoing player salary, nor can it be combined with an exsiting Traded Player Exception. The DPE must be used by itself and can only be used to acquire one (1) player who fits within the amount of the DPE.

What does this mean for Danilo Gallinari?

In effect, nothing. In order to apply for, and be granted, a Disabled Player Exception, a player must be found substantially more likely than not to be unable to play through the following June 15.

There is technically nothing to keep Gallinari from returning before June 15. If Boston uses this DPE to acquire a player and Gallinari is able to return before the end of this season, that’s a stroke of good luck for the Celtics. The player acquired stays on the roster and Boston would get Gallinari back too.

However, if Gallinari was able to return before the DPE is used, or before it expires on March 10, the DPE goes away. That’s extremely unlikely, as Gallinari is expected to miss the rest of this season.

It’s also important to note that this only kind-of, sort-of changes the ability to trade Gallinari. If Boston were to trade Gallinari and the DPE was still unused, it would be immediately removed. The DPE would also not transfer to Gallinari’s new team. Nor would they be eligible to apply for a new DPE, as the player has to have been injured while on your roster for a DPE to be granted.

Will the Celtics trade Gallinari? As heartless as that could seem, his contract is a nice piece of salary-matching in a deal at $6.5 million. Let’s say it’s unlikely Gallinari will be traded, but far from impossible. Joe Ingles and Ricky Rubio were both dealt as salary-matching pieces of trades this past season after torn ACLs. So, it certainly does happen. Rubio even re-signed with the Cavaliers after his contract expired. Gallinari could do the same, if he opted out of the $6.8 million he’s owed for next season. (The one-year waiting restriction is removed because the contract would have expired. If Gallinari was traded and then waived, the one-year restriction would remain in effect.)

So, what does this really mean? Why even apply for this DPE?

To answer the second question first, it’s about giving yourself options by putting tools in your toolbox. Much like going to do a job, you bring different types and sizes of screwdrivers, just in case you need them. Having the DPE is kind of the same deal.

There’s nothing that says Boston has to use this DPE. It doesn’t count against anything until it is used. So, like the team’s remaining Traded Player Exceptions, it’s just a good tool to have.

As for what this really means…that’s a little more difficult. $3.2 million isn’t all that much. A 10+ year veteran minimum contract this season will pay $2.9 million in actual salary this season. The kicker is that the $2.9 million veteran minimum only counts against the cap and tax at $1.8 million.

If the Celtics acquire or sign a player making even $3 million via the DPE, that player would hit the cap/tax at the full $3 million amount. When you are already more than $21 million into the tax, that extra $1.2 million adds up very quickly.

Still, it’s useful to have around. Let’s say Boston is trying to make a trade this season and they are off by up to $3.2 million in matching salary, they could take a smaller salary into the DPE to make the trade work.

Didn’t Boston have a DPE recently? What happened there?

They sure did. Good memory! Back in 2017 when Gordon Hayward broke his leg on opening night, the Celtics applied for and were granted a DPE for $8,406,000. Because Hayward was making $29.7 million that season, Boston was capped at a DPE equal to the Non-Taxpayer MLE of $8.4 million.

The Celtics were unable to find a suitable trade partner that season using the DPE. After the 2018 trade deadline passed (that same day actually), Boston used $5 million of the Hayward DPE to sign Greg Monroe to a rest-of-season contract.

Fine…Who are the Celtics getting this time?

No idea. If they wanted to sign a player, several options remain unsigned. The real issue is that would mean moving on from a player currently on the roster. Boston is at the maximum of 15 players signed to standard contracts. Reminder: the DPE is a cap exception, NOT a roster exception. That means someone would have to be waived or traded to open up a roster spot.

Because the DPE is for a relatively small amount of $3.2 million, the vast majority of eligible players for the DPE are signed to veteran minimum contracts. Those players are already acquirable using the minimum exception in a trade, so Boston wouldn’t have to use the DPE.

The guess here is that the DPE isn’t used anytime soon. Expect Brad Stevens and his staff to see what the roster needs and to keep the DPE around in case it could come in handy around the trade deadline. After the deadline passes, Boston will have a nice chunk of change to offer to a player who works a buyout. This is what happened with Greg Monroe back in 2018.

It’s important to note that the DPE does not prorate in value like other signing exceptions do. It stays at the full $3.2 million amount until it is used or expires on March 10.

The Celtics can use this entice a veteran for slightly more than the minimum, assuming ownership is willing to eat that extra tax money. That difference in salary will only grow, as veteran minimum deals do prorate, for both actual salary and cap/tax hit, by the day. Given Boston’s status as a Finals contender, that hopefully won’t be a challenge to add some more money to the payroll, should Stevens find a player he wants to acquire.