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Thread: Why The Raptors Might Not Want to Take Back A TPE In A Bosh Deal

  1. #1
    Raptors Republic Veteran Buddahfan's Avatar
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    Default Why The Raptors Might Not Want to Take Back A TPE In A Bosh Deal

    The Raptors could try and do a S&T with Bosh.

    In return for Bosh the Raptors could receive players and/or draft pick(s), cash and what is called a Traded Player Exception or TPE

    Simply put a TPE is a way for a team that is over the Salary Cap which the Raptors are to make an unbalanced trade money wise. By using what is called the TPE the team over the cap can trade a player or players away whose current annual salary (2010-11 in this case) is greater than the total salaries that they receive back. The difference would be what is called a TPE. The team could then use the TPE in a future trade to balance out a the deal.

    So for example if Toronto gave Bosh a maximum contract that paid him say $17 million for 2010-11 though I could be slightly off and then trade Bosh to the Heat for future draft picks and a TPE, the TPE would be $17 million to balance the trade.

    Now there are two problems with this.

    1. TPEs can only be used to acquire other players and not be used to sign free agents

    2. The TPE amount counts against the teams Salary Cap Hold until it either expires, one year if the original trade was a non-simultaneous trade. This means that the Raptors could wind up paying a luxury tax for 2010-11 even though they are might wind up paying actual salaries for 2010-11 of under $60 million. The luxury tax threshold for 2010-11 is now estimated to be around $68-69 million.

    So if you take the Raptors current roster based upon Johnson getting $5.5 million for 2010-11 the 12 current players would total about

    Current 12 players est tot salaries for 2010-11----$53,925,450
    Bosh's Traded Player Exception----------------------17,000.000
    ------------------------------------------------------------------------------
    Total Cap Hold for calculating Luxury Tax----------70,925,450
    Luxury Tax est for 2010-11----------------------------69.000,000
    --------------------------------------------------------------------------
    Amt Raptors over Luxury Tax Threshold------------$1,925,450
    ================================================== ====

    Now keep in mind that this is before adding at least one more player to 12 to get to the league required minimum of 13 players. Most likely the Raptors could have 14 or 15 under contract like most teams. So you can add a minimum of probably $1 - 2 million more.

    Now of course if the Raptors could trade some of that TPE for a player say like CP3 then it would probably make sense to go take the TPE and go over the luxury tax threshold.

    The problem is that unless they know that they can absolutely make a trade for someone that can help them they wind up paying a luxury tax in 2010-11 and don't even get the benefit of having the players. On top of that if the Raptors wanted to sign someone to a full MLE for say $5.6 million it would actually cost them $11.2 million including the 100% luxury tax since they would be over the luxury tax threshold before the transaction.

    Now this is how I understand taking a TPE for Bosh would work. However I am no NBA CBA expert and far from it to say the least. If someone else has some corrections to what I have posted I am sure we would all appreciate reading them.

    I apologize in advance if I am totally wrong on this and wasted people's time reading it.


    http://members.cox.net/lmcoon/salarycap.htm#Q70

    http://raptorsrepublic.com/forums/showthread.php?t=2680
    Last edited by Buddahfan; Sat Jul 3rd, 2010 at 04:13 PM.
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  2. #2
    Administrator Apollo's Avatar
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    Good explanation for us all Buddahfan. If they're looking to acquire a trade exception they're committed to paying the tax if it places them in that territory. That's my thoughts. Colangelo said early on he saw some scenarios that could see them over the tax threshold by as much as $10M.

  3. #3
    Raptors Republic Starter Mess's Avatar
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    I think you're right. I also think BC has some ideas on subsequent trades. But also a TPE would also give BC a lot more flexibility.

    I imagine he could barge in on a trade being discussed, make it a 3 way trade and get some draft picks and a player (or rights to a player overseas) etc. in return for some of the TPE.

  4. #4
    Raptors Republic Starter Mess's Avatar
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    Also, say the Raptors hold onto the TPE for a year (which is the max I think) and pay the tax. Next year when $10M comes off their cap for Evans and Banks, they combine the 2 and they could potentially trade for a max player.

    Am I right on that?

  5. #5
    Raptors Republic Rookie BomKeyzi's Avatar
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    How about a