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Fear the Sword CBA School: Cleveland Cavaliers trade FAQ

You've got questions, we've (kinda) got answers.

Since the beginning of time, man has been fascinated with bartering. We are addicted to taking our mediocre objects, whether they be rocks, Pogs, Pokemon cards, or our kid brothers and exchanging them for someone else's flotsam. Sports are no different. The Cavs have had some struggles, and with that comes the desire to shuffle some things around.

So what are their options? How does the Collective Bargaining Agreement impact them? Let's dive in.

Q: What is the Cavs salary cap situation?

This one is simple, as I've written about it before. Here, I detailed how the Cavs trades for Brendan Haywood and Keith Bogans could help them maneuver around the NBA's Hard Cap, also known as "The Apron". I suggest (obviously) reading it. Now, the Cavs traded Bogans, which gave them a trade exception, but we will cover how that functions differently than his non-guaranteed contract later.

The Cavs are over the salary cap, which is $63 Million. They are under the Luxury Tax of $76.8 million, but just barely with $75+ million in Salary*. Avoiding the Luxury Tax isn't their primary concern, but it IS a concern. Due to the repeater penalties they would face for being in the tax consecutive years, and the absolute inevitability of them being taxpayers in the future, avoiding it if they can this year makes sense. That being said, Dan Gilbert has said that taxes won't stand in the way of a deal that the team thinks can bring them a title.

*this does not count the Cavaliers 5.3 million trade exception

Q: How does being over the Cap effect the Cavs in trades?

The Cavs trade options salary-wise are as follows (ignoring the obvious, which is that they can send out a player for less money).

1.) If the Cavs salaries at the completion of the trade are ABOVE the Luxury Tax, they may take back 125% of their outgoing salary plus $100,000.

2.) If the Cavs salaries at the completion of the trade will be BELOW the Luxury Tax there are several different options

Outgoing salary Maximum incoming salary
$0 to $9.8 million 150% of the outgoing salary, plus $100,000
$9.8 million to $19.6 million The outgoing salary plus $5 million
$19.6 million and up 125% of the outgoing salary, plus $100,000

Again, this requires that the Cavs end up not crossing the $78 million luxury tax line.

Q. What is the trade exception, and how does it work?

As mentioned above, the Cavs gained a $5.3 Million trade exception when they dealt away Keith Bogans earlier this year. There are several rules regarding this exception.

1.) The Cavs may take back the amount of the trade exception, plus $100,000. They can use it on as many players as they want, within the 1 year until it expires, until they reach that amount.

2.) A trade exception cannot be aggregated in any way. The Cavs can take as many players as they can fit into it, but they cannot combine anything on top of it. Example: I saw a trade that said the Cavs were close to trading Tristan Thompson plus their trade exception for a player making 12 million dollars. This is not possible, because the exception cannot be combined with a player to match salaries.

3.) The trade exception counts towards the salary cap, but not the luxury tax. In the Cavs case, they are way over the cap anyway, so that does not matter, but the tax does. Any amount they take into the exception over around $1.5 million will put them into the tax**. I say 1.5 because the Cavs will have to release one of their minimum salaried players to bring anyone in.

**It is important to note that the Luxury Tax penalties are based on the teams final salary, which is calculated at THE END of the league year. The Cavs would have the season to try to wiggle numbers around if they wanted to avoid the tax.

Q. A complex one

Most of the responses I crowd sourced were pretty similar (and very good of course). This one was more complex.

To the first point, yes, the Cavs will almost certainly be below the apron next season if the only contracts that change are a released minimum salary player, and a player fitting the trade exception being brought in. This year the Apron is resting near $83 million, and with the expected cap increases it is fair to project it between $88 and $91 million.

Now, next season, the Cavs have a bevy of expiring salaries: LeBron James, Kevin Love, Shawn Marion, Matthew Dellavedova, Alex Kirk, Will Cherry, and James Jones will most likely all be free agents. Love and James will most likely re-sign, LeBron for 35% of the Cavs salary space, and Love for 30%, based on their years of service in the NBA.

This makes projecting against the apron hard, but the big thing to remember is that the Cavs do not want to use the midlevel in excess of the 2.5ish mini midlevel, bi-annual, or sign and trade, because this would lock them into the apron as a hard cap. The most likely scenario is that Haywood is traded after the rest of the Cavaliers roster moves are in place, vaulting them past the luxury tax and/or the apron. Only the full midlevel and acquiring a player via sign and trade will activate the apron.

Q. What can the Cavs get for Tristan Thompson, Dion Waiters or Brendan Haywood this year?

The Cavs will most likely not be getting anything for any of them. As an old team with little flexibility moving forward, they cannot really afford to let Thompson go. In our e-mail thread the other day, the FTS staff pretty much all universally came to the conclusion that the Cavs will be matching whatever offer Thompson receives.

Waiters does not fit the team well at the moment, but they like him. The conundrum you get into is that if you give up on him, you can look like a genius, or you can look really stupid. We all know about his issues with off ball defense and shot selection, but if these things are so bad, then what is someone really going to trade for him? On the flip side, when he's locked in like he was against Washington this past Wednesday, he is head and shoulders better than Matthew Dellavedova or Joe Harris could ever be. Just like Thompson, giving up on that potential when you're capped out and a veteran team is tough.

Likewise, they would be foolish to deal Haywood now as well. His contract is worth $10 million next season, non-guaranteed. This season it is worth $2 million, fully guaranteed. It would probably require a hell of a deal to get them to hand over that asset early.

Q.Who CAN the Cavs trade for?

This is tricky. The team can take in $5.4 million via the trade exception which is probably their most likely avenue. Corey Brewer has been mentioned, and he makes sense.

What you're looking for is a combination of Young Team/Bad Team/Tax Team that makes players expendable. Teams that are bad will jettison expiring or expensive veterans because it gets them further from the tax. The further you are from the tax, the more of a tax payout you get. That won't be the deciding factor in a trade, but it is a big incentive for a team to move a player that can just leave anyway, and is blocking them from playing their younger players.

Odds and Ends

A few other random things to note:

1.) Kyrie Irving and Anderson Varejao, having been signed to extensions now fall under "Poison Pill Provision" contracts. While not the extreme versions that the Rockets handed to Jeremy Lin and Omer Asik some time ago, they still qualify as such, and for the purpose of outgoing trades their salaries count as the average of their current plus future salaries, not just their current. That said, they aren't getting traded anyway.

2.) Anyone the Cavs signed this offseason, Marion, Jones, Miller, Kirk, etc. cannot be traded until December 15th at the earliest. That said, most of them aren't going anywhere via trade anyway. Originally I had January 15th here, but that is for players that are bird eligible and receive a raise of more than 20%. The Cavs free agent signings do not fit that criteria.

3.) The Cavs aren't likely to make any deals soon, unless a great exception deal pops up. With 11 new players it is prudent for them to take their time. Many teams aren't going to give players away until they are really out of it, or the player is really cast out of the locker room in most cases. Hard to sell to fans in December that you're dumping salary.

Chart courtesy of Larry Coon - "NBA Salary Cap/Collective Bargaining Agreement FAQ"