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Explaining the Trade Exception the Kings got in the Isaiah Thomas sign-and-trade


The biggest thing the Kings got by signing-and-trading Isaiah Thomas to the Suns was a $7.2 million Traded Player Exception.  There's a lot of confusion about how this exception works and how the Kings can use it.

Here are the important things to note:

  • The Kings have exactly one year in which to use the exception or it expires.
  • The exception allows the Kings to make trades without sending any salary back, a useful tool for teams without cap space like the Kings.
  • The Kings can only use the exception to acquire a player or player(s) worth $7.3 million (the value of the exception plus $100,000).  So for example, they could use it to trade for one $7.3 million player, or they could use it to trade for a $5 million player and let the rest expire, or they could use it to trade for one $3 million player and then later acquire a $4.3 million player.
  • You can't combine the trade exception with another player.  So if you were the Kings and wanted Taj Gibson and his $8,000,000 salary, you couldn't make a trade like "McCallum and the Exception for Gibson" like a normal trade.
  • You can't combine the trade exception with another trade exception to create one large trade exception.  The Kings already have a couple of small trade exceptions from the Rudy Gay and Marcus Thornton trades that are worth about $620,000 and $2.4 million respectively.  The Kings can't combine those exceptions with this new one.

The tricky thing about using this exception is that the Kings are so close to the luxury tax and hard cap already.  They haven't officially signed Darren Collison yet, but once they do they will be at $76,360,041 in total salary with the luxury tax at $76,829,000 and the hard cap (which Sacramento can't go over for any reason) at $80,829,000.  Keep in mind that should the Kings go over the tax, they still have until the end of the season to get under (so effectively the trade deadline).