NBA Trade Rules & Regulations

Each February the NBA trade deadline creates a buzz of off-court excitement as teams jockey to add key players that could propel them to the league championship or serve as building blocks for future success. But because of the NBA's stringent payroll-balancing policies, a player's salary and contract status often overshadows his athletic prowess when it comes to completing trades.

The rules and regulations regarding NBA trades are the most confusing and convoluted of all professional sports. To illustrate the point, the Dallas Mavericks had to resort to signing a retired player to a $4 million contract last year as part of the machinations to complete an eight-person trade for New Jersey Nets point guard Jason Kidd.

  1. Significance

    • As the Boston Celtics showed recently, key trades can transform a NBA team from an also-ran into a champion. After a disappointing 2006-2007 season in which they missed the playoffs, Boston traded for forward Kevin Garnett and guard Ray Allen. The moves paid big dividends as the Celtics won the 2008 NBA championship

    History

    • Swapping NBA players today is not nearly as simple as it was when Toronto sent George Nostrand to Cleveland for Clarence "Kleggie" Hermsen in the league's first trade on Dec. 5, 1946. During the ensuing decades some of the NBA most famous stars, including Kobe Bryant, Wilt Chamberlain and Kareem Abdul-Jabbar, switched teams via trades.

      The largest trade in NBA history was a five-team, 13-player swap that took place on Aug. 2, 2005. As part of the trade, Miami acquired three players--James Posey, Antoine Walker and Jason Williams--who teamed with Shaquille O'Neal and Dwayne Wade to lead the Heat to the 2006 NBA championship.

    Considerations

    • The NBA's team salary cap, which was set at $58.68 million for the 2008-2009 season, is a major consideration in almost every trade of players that occurs. Since most of the league's 30 teams typically exceed the salary cap, they must comply with strict payroll restrictions when making trades. NBA rules stipulate that a team over the salary cap cannot add payroll exceeding 125 percent plus $100,000 of the salary that they are trading away. Under this formula, a team over the salary cap that trades a $5 million player can receive one or more players whose salary is no more than $6.35 million in return.

      The league's luxury tax, a dollar-for-dollar levy that will kick in during the 2008-2009 season when a team's salary exceeds $71.15 million, also can be an obstacle to putting together trades.

    Types

    • NBA teams can swap players through three types of trades: simultaneous, non-simultaneous and sign-and-trade. Simultaneous trades involving two or more players take place all at once. Non-simultaneous trades, which are limited to deals involving a single player from two teams, can take up to a year to consummate. In a sign-and-trade swap, a player who agrees to a new contract is immediately dealt to another team.

    Rumors

    • The NBA's 2008-2009 trade deadline is 3 p.m. on Feb. 19. The players seen as the most likely candidates to change teams before that deadline include New Jersey Nets guard Vince Carter, Los Angeles Lakers forward Lamar Odom, Miami Heat forward Shawn Marion and Utah Jazz forward Carlos Boozer.