3 months not 6.
Sign and trade agreements[edit]
Main article: Sign-and-trade deal
When a team is willing to sign an upcoming free agent, but the player's current team wants something in return, it might be in the best interest of both clubs to execute a sign-and-trade deal. This occurs when one team signs one of its free agents and immediately trades that player to another team. A sign-and-trade is beneficial to both the player and the teams; the player receives a bigger contract than he might ordinarily get from a team that he would like to play for, while the trading club gets something in return for a free agent, and the recipient of the trade gets the player they desire. Sign-and-trades are a reality in the NBA because of the CBA's rules: unlike baseball, where teams losing free agents are compensated with draft picks or cash, NBA teams that lose free agents receive no compensation.
When a team initiates a sign-and-trade agreement, it must trade the signed player immediately; teams cannot renege on the arrangement and keep the player for themselves, using the other team's financial situation to leverage the signee into a more favorable deal for themselves. Also, the contract signed before the trade must be for at least 3 years, with the first year guaranteed. Because of the contract length requirement, the signing team cannot use an exception that cannot be used to offer a contract of 3 or more years.[75]
Since the 2011 CBA, the signed player must have been on the roster of his previous team at the end of the last regular season. Previous agreements allowed teams to sign-and-trade any player to whom they held Bird rights, which do not automatically disappear with a player's retirement—for example, in July 2012, the Los Angeles Lakers still held Bird rights to John Salley, who had not played since 2000. In the 2007–08 season, two teams used sign-and-trades on players who had been out of the league. The Dallas Mavericks signed Keith Van Horn out of retirement as part of a package to acquire Jason Kidd, and the Lakers did the same with Aaron McKie to facilitate their deal for Pau Gasol.[76]
The 2011 CBA put further restrictions on sign-and-trades, with these restrictions maintained in the 2017 CBA. Since the 2013–14 season, the payroll of the receiving team cannot exceed the so-called "apron" (as of 2017–18 set at $6 million above the tax line) as a result of the trade, and a team that has used the taxpayers' MLE cannot receive a player in a sign-and-trade in that season. Additionally, the apron becomes a hard salary cap for the first season after the signing. Teams above the apron before the trade cannot receive a player unless the trade leaves the team below the apron.[75]
Trading and the salary cap[edit]
Teams below the salary cap may trade without regard to salary, as long as they don't end up more than $100,000 above the cap following a trade.
Teams above the cap (or teams below the cap but would end up more than $100,000 over the cap following a trade) cannot acquire more than 125% plus $100,000 of the salary they trade away. Under the 2011 CBA, teams that remain below the luxury tax threshold even after the trade can acquire the lesser of 150% plus $100,000, or 100% plus $5 million, of the salary they trade away.[5] There is no lower limit—teams may divest themselves of as much salary as they wish (or can convince another team to take on) in a trade.
No free agent signed in the offseason can be traded until December 15 of that year or until three months have passed (whichever comes later), a rule that prevents teams from signing free agents with the intent of using them strictly as trade fodder. For draft picks this moratorium lasts 30 days.
If teams acquire a player in a trade, they are allowed to trade that player straight-up for another individual player immediately. However, if teams wish to package that player with another and trade for a more expensive player, they must wait 60 days before doing so.
The tight salary-matching rules of the 2005 CBA often required what NBA cap analyst Larry Coon called "trade ballast"—extra players added to a deal solely for salary matching, who would typically be waived by their new teams. Under that CBA, such players were restricted from rejoining their original teams for 30 days during the season or 20 days in the offseason. This led to what Coon called "wink-wink deals where players are traded with the full expectation of returning later." A notable example of such a deal occurred in the 2009–10 season, in which the Cleveland Cavaliers included Zydrunas Ilgauskas in their trade with the Washington Wizards for Antawn Jamison. Ilgauskas was waived a week later without ever appearing in a game for the Wizards, and re-signed with Cleveland after the 30-day waiting period passed. Since the 2011 CBA, a player acquired in a trade and waived by his new team cannot re-sign with his original team until one year after the trade or July 1 after the expiration of his contract, whichever is sooner.[5]
Base year compensation[edit]
Certain players in the first few months of a new contract are subject to base year compensation (BYC). The intent of BYC is to prevent teams from re-signing players to salaries specifically targeted to match other salaries in a trade (in other words, salary should be based on basketball value, not trade value). A BYC player's trade value as outgoing salary is 50% of his new salary, or his previous salary, whichever is greater. BYC applies only to players who re-sign with their previous team and receive a raise greater than 20%. It also applies only when (and as long as) the team is over the salary cap. Since the 2011 CBA, players subject to BYC cannot be traded before January 15 except in a sign-and-trade, and BYC is only applied to outgoing salary in sign-and-trade deals.[5]
This is the section that keeps them from getting a TPE in sign and trade.
