Question about cap space involving trades:
I know about the 125% rule (where a team is limited to 125% + 100.000 as incoming salary to outgoing salary) when a team is out of cap space and when a team has enough cap space they can just use that to absorb a bigger contract.
How does it work when you potentially make a trade where you get more than 125% back as incoming salary, but where you have some cap space to absorb a part of that?
A team has $10M in cap space. They trade away $20M and want $35M back, is that allowed? (absorb 10M + 20M*125% = 10M + 25M = 35 M)
Let's say you want to trade for 2 players. The first one has a salary of 10 million and the second one has a salary of 25 million. What you can do is break the transaction down into 2 separate trades.
1. Absorb the 10 million via cap space (you'd have to renounce all cap holds first). This would create a trade exception for the other team equal to their outgoing salary + $100,000.
2. Match the remaining 25 million via the 125% + $100,000 rule.
As far as I know, the above scenario isn't valid if your target is one player whose salary is 35 million, because you can no longer break down the transaction into 2 separate trades.