The intracacies of Cash Considerations

by RiG on Jul 3, 2009 1:09 AM PDT Comment 6 comments

OK so I'm more of a NFL fan (go broncos!) but I have always loved salary cap stuff. Just recently I have been studying the NBA's 'soft' cap and its rules -which I find very interesting. But one thing I can't find any information on by googling is trading cash.

Example: Team A trades a draft pick to Team B in return for 3 mil$

So my questions are:

1. Does Team A get 3 mil added to their cap?

2. Does Team B get 3 mil subtracted from their cap?

3. Or is it like the GM for Team B just gives the GM for Team A 3 mil with no cap affect?

can someone please explain!!?

Heres what I found in the CBA....but it doesn't answer my Qs

Section 8. Trade Rules.
(a) A Team shall not be permitted to receive in connection with any trade, directly or indirectly, more than $3 million in cash or other compensation, including cash or other compensation received as reimbursement for Compensation obligations to players who the Team is acquiring. For purposes of this Section 8(a), if a Contract is signed and then traded pursuant to Section 8(e)(1) below, and the Contract contains a signing bonus, the payment of all or any portion of such bonus by the Team that signed the Contract shall be treated as a reimbursement of a Compensation obligation of the assignee Team and shall be subject to this Section 8(a).

Thanks

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Team just gets $3 million in hard cash

No salary cap implications aside from the savings from not having to give a first round pick a guaranteed contract, which can be a problem for teams above the tax line, as they’d basically be paying double for a rookie. For teams that are stacked or have no room for a rookie to come in and develop, it’s a good move.

by Ben R on Jul 3, 2009 1:15 AM PDT reply actions 0 recs

So no salary cap implications at all

hmm

So 1 team justs hands over cash directly to the other team and thats it.
Can the cash be spread out over a few years?

by RiG on Jul 3, 2009 1:22 AM PDT up reply actions 0 recs

No, it has to be for something

$3 million is the maximum you can give someone for a draft pick. And it has to be all at once.

by Ben R on Jul 3, 2009 1:38 AM PDT up reply actions 0 recs

Oh yea

does it affect teams or make teams go over the tax line??
or anything like that?

by RiG on Jul 3, 2009 1:23 AM PDT reply actions 0 recs

Not, really

Contracts make you go over the tax line. Selling a pick means that you don’t have to take on a guaranteed contract. Again, the $3 million is just hard cash that the organization can use towards free agents, resigning their own players, repainting the owner’s office, or honestly, whatever the hell they want.

by Ben R on Jul 3, 2009 1:39 AM PDT up reply actions 0 recs