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Ready, set, trade! ... Not so fast - NBC Sports

Ready, set, trade! ... Not so fast
Trades easier to complete under new collective-bargaining agreement, but harder to stomach
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Dwight Howard wants out of Orlando. But because the Magic want to add Hedo Turkoglu to any deal for the center, that may be hard to make happen when considering the new luxury tax rate that begins in 2013-14.
March 8, 2012, 2:03 am

One of the changes touted, by both sides, from the previous collective-bargaining agreement was a relaxation of trade rules. No longer, we were told, would deals be so difficult to complete between teams operating above the salary cap.

Previously, teams operating above the cap were only able to complete deals within 125 percent of a player's salary. In essence, if you were trading out a player with a $10 million salary, you could not take back more than $12.5 million in total salary.

To trigger-shy front offices, it was an annual easy out, "The money just didn't work."

But under the new agreement reached in December, deals among teams operating above the cap but below the luxury tax, must only fall within 150 percent of a traded player's salary. So send out that $10 million salary by the deadline and you can take back up to $15 million in salary.

Yes, it is a huge difference. There may be no better example than Dwight Howard, who earns $18 million this season. Under the previous rules, in exchange for Howard the Magic could acquire players whose contracts totaled a maximum of $22.5 million in salary. Under the new rules, Orlando can bring back $27 million in salary, essentially half of the total salary cap. Just a year ago we witnessed the power of such volume shopping, based on what the Nuggets fleeced from the Knicks in the Carmelo Anthony deal.

Depending on the perspective - and the perspective on the abilities of Magic general manager Otis Smith - that means Orlando can get a lot more in total value than in the previous agreement (or a lot more of someone else's junk).

So those phones will be ringing off the hook around the league, right?

Not quite.

Which brings us to Part B of how the new collective-bargaining agreement has changed the trade landscape.

Because with the greater freedom to make deals comes, well, greater responsibility.

The 2012 NBA trading deadline might prove to be the ultimate caveat-emptor trading deadline.

Why? Because of the dreaded luxury tax.

For the first two years of the new CBA, little changes in respect to the dollar-for-dollar tax on excessive payroll. Go over the tax threshold, pay a dollar-for-dollar penalty on contracts to the league. The rule remains the same for this season and next.

Starting in 2013-14, the tax rate increases to $1.50 for the first $5 million over the tax threshold; $1.75 for $5 million to $10 million over; $2.50 for $10 million to $15 million over; $3.25 for $15 million to $25 million over; and an additional 50 cents for each additional $5 million.

So add a $5 million player this season or next season if you're operating above the tax and you pay an additional $5 million to the league at season's end. But in 2013-14, that same player would leave you with at least a $7.5 million additional payment and possibly easily as much as a (gulp) $12.5 million additional payment.

In essence, a mid-level-talented player, one valued at $5 million, could cost as much as $17.5 million, or more, in actual payout.

(Now you can appreciate why the union equated the tax system to a hard cap and why the players fought two months into the scheduled start of the season for something better.)

The upshot is don't expect many players on long-term deals to be dealt by this season's deadline.

The Nuggets, for example, having settled into a primary rotation at center of Nene and Kosta Koufos, have been looking to shed Chris Andersen's contract. No, not because of the Birdman's color artwork, but because of a contract that calls for a $4.5 million salary next season and then, and this is the rub, a $4.8 million salary in 2013-14, when the new tax kicks in. That would make Andersen's cost to a taxpaying acquiring team at least $12 million in 2013-14 ($4.8 in actual salary, $7.2 million, at the minimum, in tax payments).

And that makes this year's trading deadline and those going forward, more about salary numbers than any previous seasons.

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It is among the reasons why, even with aging games, Ray Allen and Kevin Garnett and their expiring contracts stand more palatable to some potential Celtics trade partners than a Rajon Rondo contract that runs through 2014-15 or even a Paul Pierce contract that holds a $4 million guarantee for 2013-14.

Similarly, among the reasons the Magic are looking to offload Hedo Turkoglu in any Dwight Howard deal is the $6 million guarantee Turkoglu holds for his overall $12 million salary in 2013-14.

On one hand, the NBA has made it easier than ever to complete deals, with more latitude in the new collective-bargaining agreement. Give a general manager 25 percent more cap space to work with in a deal and you'd be shocked at just how complete a trade they can achieve.

But on the other hand, the NBA essentially has created a hands-off zone when it comes to dealing for players whose contracts extend more than one season out.

For a player the ilk of Howard, of course, all bets are off. But more than ever, the math and the money will matter.

We've already seen owner Mark Cuban tear apart a championship Mavericks roster because of future cap concerns. And we're in the midst of the deconstruction of the Lakers by the Buss family because of the tax on the horizon.

The reality is that the March 23 buyout deadline for playoff eligibility could prove more productive this year than the March 15 trade deadline itself. That's when players will come with no strings attached, and, more specifically, no 2013-14 strings attached.

The irony of the lockout settlement is trades are now easier than ever to make, yet perhaps more difficult to stomach.

Ira Winderman writes regularly for and covers the Heat and the NBA for the South Florida Sun-Sentinel. You can follow him on Twitter at

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