M304 Exam 2
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1. What are the rules regarding trades?: Teams under the salary cap may make trades as they please,
as long as they don't finish more than $100,000 above the salary cap following any trade. But if a team finishes more than
$100,000 over the cap, whether they started out above or below the cap, then an exception is required. An exception is
the mechanism that allows a team to make trades or sign players and finish over the salary cap. Since most teams are
usually over the salary cap, trades are usually completed using exceptions.
2. Traded Player exception: is the principal means through which most trades are made.
It allows teams to make trades that leave them over the cap, but it places several restrictions on those trades. Trades
using the Traded Player exception fall into two categories: simultaneous and non-simultaneous. As its name suggests,
a simultaneous trade takes place all at once. Teams can trade players together and acquire considerably more salary
than they trade away in a simultaneous trade.
3. In all trades (no matter how many teams are involved), each team must send
out and take back at least one of the following:: A player under contract.
A future draft pick. If a pick is protected (see question number 89), then no more than 55 picks in a single draft can be
protected.
The draft rights to an "NBA prospect" -- a player with a reasonable chance of becoming an NBA player during his career,
or a contributing player in a reputable professional league (as determined by the league office).
The right to swap unencumbered picks in a future draft.
$75,000 or more.
In addition to the above, in a three (or more) team trade, each team must "touch" at least two other teams in the trade.
To qualify as a touch, at least one of the following must be sent (in either direction):
An active player contract
At least $750,000 cash
A future pick that will actually be conveyed (for example, a team can't meet the touching requirement by sending a
top-55 protected pick, that switches to $100,000 cash if it falls within the top 55)
The draft rights to an actual NBA prospect (same description as above)
4. When teams wish to complete a trade they must set up a "trade call" with the
league office.: If the teams wish to complete the trade over a weekend they must notify the league office on
Friday, otherwise the trade call cannot be held until the following Monday. The trade is not complete until all terms
have been agreed to during the trade call.
During the trade call the teams and the league office review:
, M304 Exam 2
Study online at https://quizlet.com/_i21cbm
The exact terms of the trade (players involved, cash, draft picks, etc.).
Contract details for each player, including remaining seasons, salary and any trade bonuses.
Health information for all players, including any factors that could affect a player's ability to play basketball at any point
in his career. Teams must disclose any relevant health information.
Insurance information, including any exclusions (see question number 73).
Each team's responsibilities and understandings.
5. What happens when a player is traded: Players must be notified of a trade no later than one hour
after the trade call, and no less than one hour before any public announcement.
Players cannot play, practice or work out with their new teams until the league office notifies the teams that the trade
is complete.
If a team misrepresents or fails to disclose any pertinent information during the trade call, the Commissioner can impose
penalties including a fine up to $1 million, suspension of the team executives who were involved, rescinding the trade,
and/or the forfeit of draft picks.
Traded players must report to their new teams within 48 hours of receiving notice of an in-season trade, or within one
week if the trade occurred during the offseason. If a player fails to report to his new team following a trade it can be
deemed conduct prejudicial to the NBA, and subject the player to a fine and/or suspension.
Since salary can be deferred or paid on an alternate schedule (see question number 115), a team can trade a player
to whom it owes salary for services rendered prior to the trade. When this happens, the team sends any back salary to
the player's new team, and the new team pays the player.
When a player is traded, his full season salary is transferred to the team salary of his new team, and he counts $0
toward his old team's team salary. The exception is when determining whether teams have met their minimum team
salary obligations (see question number 14). For minimum team salary purposes the salary of a traded player is divided
among the teams for which he played. For example, if a $10 million player is traded exactly 60% of the way through
the season, then the player's original team counts $6 million of the player's salary for minimum team salary purposes,
and the player's new team counts $4 million of the player's salary for minimum team salary pur
6. Simultaneous trade: gives the team more money but less time
A simultaneous trade takes place all at once. The amount of salary a team can take back in a simultaneous trade depends
Study online at https://quizlet.com/_i21cbm
1. What are the rules regarding trades?: Teams under the salary cap may make trades as they please,
as long as they don't finish more than $100,000 above the salary cap following any trade. But if a team finishes more than
$100,000 over the cap, whether they started out above or below the cap, then an exception is required. An exception is
the mechanism that allows a team to make trades or sign players and finish over the salary cap. Since most teams are
usually over the salary cap, trades are usually completed using exceptions.
2. Traded Player exception: is the principal means through which most trades are made.
It allows teams to make trades that leave them over the cap, but it places several restrictions on those trades. Trades
using the Traded Player exception fall into two categories: simultaneous and non-simultaneous. As its name suggests,
a simultaneous trade takes place all at once. Teams can trade players together and acquire considerably more salary
than they trade away in a simultaneous trade.
3. In all trades (no matter how many teams are involved), each team must send
out and take back at least one of the following:: A player under contract.
A future draft pick. If a pick is protected (see question number 89), then no more than 55 picks in a single draft can be
protected.
The draft rights to an "NBA prospect" -- a player with a reasonable chance of becoming an NBA player during his career,
or a contributing player in a reputable professional league (as determined by the league office).
The right to swap unencumbered picks in a future draft.
$75,000 or more.
In addition to the above, in a three (or more) team trade, each team must "touch" at least two other teams in the trade.
To qualify as a touch, at least one of the following must be sent (in either direction):
An active player contract
At least $750,000 cash
A future pick that will actually be conveyed (for example, a team can't meet the touching requirement by sending a
top-55 protected pick, that switches to $100,000 cash if it falls within the top 55)
The draft rights to an actual NBA prospect (same description as above)
4. When teams wish to complete a trade they must set up a "trade call" with the
league office.: If the teams wish to complete the trade over a weekend they must notify the league office on
Friday, otherwise the trade call cannot be held until the following Monday. The trade is not complete until all terms
have been agreed to during the trade call.
During the trade call the teams and the league office review:
, M304 Exam 2
Study online at https://quizlet.com/_i21cbm
The exact terms of the trade (players involved, cash, draft picks, etc.).
Contract details for each player, including remaining seasons, salary and any trade bonuses.
Health information for all players, including any factors that could affect a player's ability to play basketball at any point
in his career. Teams must disclose any relevant health information.
Insurance information, including any exclusions (see question number 73).
Each team's responsibilities and understandings.
5. What happens when a player is traded: Players must be notified of a trade no later than one hour
after the trade call, and no less than one hour before any public announcement.
Players cannot play, practice or work out with their new teams until the league office notifies the teams that the trade
is complete.
If a team misrepresents or fails to disclose any pertinent information during the trade call, the Commissioner can impose
penalties including a fine up to $1 million, suspension of the team executives who were involved, rescinding the trade,
and/or the forfeit of draft picks.
Traded players must report to their new teams within 48 hours of receiving notice of an in-season trade, or within one
week if the trade occurred during the offseason. If a player fails to report to his new team following a trade it can be
deemed conduct prejudicial to the NBA, and subject the player to a fine and/or suspension.
Since salary can be deferred or paid on an alternate schedule (see question number 115), a team can trade a player
to whom it owes salary for services rendered prior to the trade. When this happens, the team sends any back salary to
the player's new team, and the new team pays the player.
When a player is traded, his full season salary is transferred to the team salary of his new team, and he counts $0
toward his old team's team salary. The exception is when determining whether teams have met their minimum team
salary obligations (see question number 14). For minimum team salary purposes the salary of a traded player is divided
among the teams for which he played. For example, if a $10 million player is traded exactly 60% of the way through
the season, then the player's original team counts $6 million of the player's salary for minimum team salary purposes,
and the player's new team counts $4 million of the player's salary for minimum team salary pur
6. Simultaneous trade: gives the team more money but less time
A simultaneous trade takes place all at once. The amount of salary a team can take back in a simultaneous trade depends
