You know, I am kind of surprised somebody hasn't tried what the OP is talking about before. At least, I don't think anyone has?
Maybe somebody will do it this offseason? It could make financial sense for some desperate team to way overpay one guy for a year just to ditch a guy with multiple years left.
It'd be like the Lakers signing Trevor Ariza to a one year, 10+ million deal, or whatever it takes just to trade him to the Clippers for Baron Davis.
I was about to reply with what you said, since everybody else that replied to this thread thought that someone really would give Leon $9 mill. I have to assume there is something in the small print that would prevent this from happening, like you can't sign a guy for more than the mid-level exception if you are using him in a sign and trade, but I don't know.
But like Cornbread, I would like to know from someone knowledgable the by-laws on something like this...
there is a clause in the CBA to prevent this from happening: the BYC contract (base year compensation) clause. It basically works something like this:
-If a team is over the cap, salary of the player(s) going out have to be within 125% + $100,000 of each other.
-If a player is signed or extended and gets a raise of more than 20%, then that player is a BYC player.
-When a trade involves a BYC player, the receiving team of the player counts the full salary of the BYC player, while the sending team only counts half the salary
-since half the salary is really never within 125% of the other player involved in a trade, this prevents a trade like the Powe for Diaw from happening, unless a 3rd under the cap team is involved or there are many other contracts involved.
Larry Coon:
What is "Base Year Compensation?" How does base year compensation affect trades? Why does it exist?
Base year compensation (BYC) prevents another salary cap loophole. Without BYC, a team over the salary cap that wants to trade a player, but can't because of the Traded Player exception (which says teams can't take back more than 125% of the salary they trade away), could just sign the player to a new contract that fits within the desired range, then do the trade. BYC says "if you re-sign a player and give him a big raise, then for a period of time his trade value will be lower than his actual salary."
BYC defines the salary that's used to compare players for compliance under the Traded Player exception (see question number 68 for more information about the Traded Player exception). Usually the salary used for comparison is the player's actual salary. But under either of the following circumstances, a different salary is used when comparing salaries for trading purposes:
* The team is over the salary cap, used the Larry Bird or Early Bird exception to re-sign the player, and the player received a raise greater than 20% (unless it's the minimum salary).
* The team is over the salary cap, it extended the player's rookie scale contract, and the player received a raise greater than 20%.
If either of the above apply, then the player is considered a base year player. A player remains a base year player for six months, or until June 30, whichever comes later. When trading a base year player, the salary used for comparison is the player's previous salary, or 50% of the first-year salary in his new contract, whichever is greater.
Here is an example of a BYC calculation: A player earned $2 million in 2004-05, after which he became a free agent. He then signs a new contract (re-signing with his previous team, which is over the salary cap) starting at $9 million. This player qualifies for BYC, so his trade value is the greater of his previous salary ($2 million) or 50% of his new salary ($4.5 million), or $4.5 million. So this player, who actually earns $9 million, is worth $4.5 million for trading purposes.
When comparing salaries for trade, teams use their own player's BYC value and the other player's full salary, even if the other player is also BYC. Here is a simple example -- two $5 million players, both of whom are re-signed (by teams over the cap) for $10 million. Both players become base year players whose base year amount is $5 million (50% of the new salary). If the teams want to trade these players for each other they compare their player's base year amount to the other player's full salary. So each team can take back a maximum of 125% plus $100,000 of their player's $5 million base year amount, or $6.35 million. They compare $6.35 million to the other player's full $10 million. $10 million is way too high, so this trade can't be done, even though the players' actual salaries match exactly.
If one of the teams in the above example was below the cap, the trade still couldn't be done. For the team under the cap, their player would not be BYC, so they would be comparing $10 million to $10 million. But since the other team is over the cap, their player is BYC, and they'd still be comparing $5.85 million to $10 million, which prevents the trade from working. (See question number 75 for more information about trading BYC players.)
For Larry Bird or Early Bird players, the player's BYC begins on the date he signs his contract. For extended rookie scale contracts, the player's BYC begins on the day after the July Moratorium which precedes the first season of the extension. For example, if an extension of a rookie scale contract is signed on 10/30/05, his BYC begins on 7/12/06, because the first season of the extension is 2006-07. A player's BYC goes away if the team falls below the salary cap, the player signs with a different team, or the player is traded.
If a team trades an extended rookie between the date his extension is signed and the date it takes effect, his "trade value" for the receiving team is the average of the salaries in the last year of the scale contract and each year of the extension. This is called the poison pill provision. The sending team uses the player's actual salary when calculating their outgoing salary. They use the current-year maximum salary in place of the (unknown) maximum salary for a future season, if necessary.
Here is an example of a poison pill calculation: Carmelo Anthony earns $4,694,041 in 2006-07, the final year of his rookie scale contract. Prior to October 31, 2006 he signed a five year extension (bringing the total seasons to six) for the maximum salary, with the maximum 10.5% raises. Anthony's actual salary will not be determined until July 2007, when the maximum salary amounts for 2007-08 are set. During the 2006-07 season the 2006-07 maximum is assumed for the 2007-08 season ($13,762,775), and the salary in subsequent seasons is based on this amount ($15,070,550, $16,378,325 and $17,686,100, respectively). If Anthony is traded during the 2006-07 season, then his outgoing salary from the Nuggets' perspective is his actual salary of $4,694,041. His incoming salary from the other team's perspective would be $13,518,358 -- the average of his 2006-07 salary and the assumed salaries in the extension.
Topic: Leon Powe trade possibilities (Read 6075 times)