In a somewhat complicated sign-and-trade agreement that has Kevin Martin inking a near $30 million deal with the Wolves, the Thunder are gaining a $7 million trade exception.
Here’s how that works: The Thunder are sending the Wolves cash to make it worth their while because they could just sign Martin outright. But in the deal, the Thunder “sign” Martin and then trade him to the Wolves, who are under the cap and to match salaries, send back what’s called a traded player exception. Essentially a pretend player that doesn’t occupy a roster spot but is worth the signing price, which in this case is $7 million.
It’s a very Presti move. It’s gaining value out of Martin’s departure instead of just allowing him to walk for nothing. The Thunder may not use the exception, but now they have it.
So, what’s a trade exception again?
Since the Thunder are over the cap, any deal they make will have to match salaries. You can’t add the exception to anything, so any deal you make, the incoming salary has to be the same as the exception. If you have a $7 million trade exception, you can’t add a $5 million player to it to acquired a guy making $12 million. You can just get someone making $7 million. Mostly, you use trade exceptions to deal a pick for a player, so you can match salaries.
A trade exception lasts for one year, so Presti is extending the life of Martin’s contract for a little while longer, and at least presenting the opportunity for another deal. Just an example, but say the Thunder wanted Gerald Henderson really bad. They could get him in a sign-and-trade for up to $7 million and send back a second round pick or something to Charlotte. Instead of having to deal back actual players that have actual value. That’s the idea.
Outside of all that, it doesn’t mean much. The Thunder also have a $2.9 million trade exception from the Eric Maynor deal that they can use. And no, you can’t combine trade exceptions.
The reason for getting it though? It’s just an extra asset to have in your back pocket.