Hamilton: NBA Teams With Cap and Trade Exceptions

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As August ends and calendars are flipped to September, it dawns on you: NBA training camps will open in a few weeks.

Although the Summer of 2012 will ultimately be remembered for when the Los Angeles Lakers somehow managed to acquire two of the top prizes on the market, there are still quite a few free agents that could ultimately be the difference between your favorite team making a trip to the postseason or anxiously awaiting the results of the draft lottery.

My respective five best available players are Leandro Barbosa, Andray Blatche, Kenyon Martin, Lou Amundson and Mickael Pietrus.  And scores of others – including Matt Barnes, Rasual Butler and Josh Childress – are worthy role players.

As we draw closer to camp, taking note of which teams still have their midlevel, room, and biannual exceptions is a worthwhile endeavor. And to a lesser extent, the same can be said of traded player exceptions. Any of these four exceptions are assets that can ultimately result in the acquisition of a player who can help.

Just ask the Los Angeles Lakers, who used a traded player exception to acquire Steve Nash.

At this point, a surprising number of teams still have available money to spend. Here’s a full account.

Non-Taxpayer Midlevel Exception ($5 million)wizards small logo

This offseason was the first full one in which there were two midlevel exceptions. Entering this offseason, if a team had less than about $70 million in guaranteed salaries committed for 2012-2013, it was granted a $5 million midlevel exception. As usual, the exception can be used to sign one player or it can be split among multiple players. As of today, the only team in the league that has the entire $5 million exception available is the Washington Wizards. Each of the other teams that entered this offseason with the $5 million exception have used a portion of it.

The Milwaukee Bucks ($4.35M), Orlando Magic ($4.21M), Denver Nuggets ($3.33M), and Oklahoma City Thunder ($3.33M) have more than half of the exception remaining. The Detroit Pistons and Utah Jazz each have approximately $2.5 million remaining, while the Memphis Grizzlies have $2 million.

Clearly, the Wizards, Bucks and Magic – and to a lesser extent, the Nuggets and Thunder – have the best chance of landing one of the best remaining players. Of those teams, the Thunder are the only one who can offer a shot at competing for a title. However, after recently signing Serge Ibaka to a rich extension, the prevailing thought seems to be that the Thunder will try to curb their spending. That seems especially probable considering that last season’s Sixth Man Award winner, James Harden, is entering the final year of his rookie-scale deal.

Taxpayer Midlevel Exception ($3.09 million)

Teams that entered the offseason with about $70 million or more committed in guaranteed salaries for 2012-2013 were allowed a smaller version of the midlevel exception. The Miami Heat used their taxpayer exception to sign Ray Allen, while the Los Angeles Lakers used approximately half of their exception to sign Jodie Meeks. As of now, the Lakers ($1.4 million) are the only team that has a portion of its taxpayer midlevel exception remaining.

However, after their busy offseason, the Lakers’ 2012-2013 payroll now sits at $100.7 million. This season, its projected starting lineup will earn a whopping $82.5 million. Maybe (just maybe), they’re finally finished spending.

Room Exception ($2.575 million)pacers small logo

The new “room” exception is a salary exception that allows a team to spend all of its room under the salary cap, and then, once at the cap, exceed it using the room exception. In other words, a team that entered the offseason with $8 million under the cap could sign a free-agent for $8 million, and then have the ability to spend an additional $2.575 million using this exception.

Ten teams still have the full exception available. They are the Charlotte Bobcats, Cleveland Cavaliers, Dallas Mavericks, Houston Rockets, Indiana Pacers, New Orleans Hornets, Philadelphia 76ers, Phoenix Suns, Portland Trail Blazers and Sacramento Kings.

Of the teams listed here, it’s probably safe to assume that the Indiana Pacers would be the most desirable destination, perhaps with the Philadelphia 76ers a close second.

Still, it’s worth noting that there’s nothing to say that teams have to spend this money, and we should expect to see some frugality with the new luxury tax era on the horizon.

Biannual Exception ($1.957 million)spurs small logo

The biannual exception is a familiar friend, though the rules that govern it were changed since the enactment of the 2011 CBA. It was only made available to teams who entered this offseason with less than about $72 million in guaranteed salaries committed for 2012-2013. It also is not available to any team that uses the room exception.

At slightly less than $2 million, the biannual exception doesn’t seem like much money when compared to the midlevel and room exceptions. But the minimum salary for a 10-year veteran is $1.35M, so that means that a veteran being paid with the biannual exception (as opposed to the minimum salary) stands to be paid 45 percent higher. That could make a difference with a veteran free-agent such as Chris Andersen, Rasual Butler or Derek Fisher.

Currently, 11 teams can use the biannual exception if they choose. They are the Atlanta Hawks, Boston Celtics, Denver Nuggets, Detroit Pistons, Golden State Warriors, Milwaukee Bucks, Oklahoma City Thunder, Orlando Magic, San Antonio Spurs, Utah Jazz and Washington Wizards.

Traded Player Exceptions

A traded player exception (TPE) is a bit different than the other salary exceptions. The other exceptions can be used to sign free agents, but a TPE may only be used to acquire a player via trade. Despite this limitation, a TPE is a very valuable asset because it allows additional flexibility in deal-making. Under normal circumstances, if two teams are over the cap and wish to execute a trade, the salaries being sent and received must within a certain range in order for the trade to be allowable under the league’s CBA. By using the TPE, teams – under certain circumstances – may execute trades that otherwise could not have occurred.

A traded player exception is most commonly created when a team on one end of a deal trades a player to team that is under the salary cap. The Orlando Magic ($17.816M) currently own the biggest trade exception in league history after consummating their deal for Dwight Howard.

The Denver Nuggets ($13M, via Nene), Chicago Bulls ($5M, via Kyle Korver), and the Golden State Warriors ($3.3M via Ekpe Udoh) also have noteworthy trade exceptions.

Ultimately, this type of exception allows the team to execute a trade in which it accepts salary in return without trading any away. As always, there are rules and caveats (and expiration dates) that govern the exception. Nonetheless, the major point remains: a TPE is an asset that can help facilitate player movement and help a team build itself into a contender.

The 2012-2013 season is right around the corner. But until it actually begins, rest assured that some of these teams will spend some of their available money if they feel it will improve their chances of competing.

Moke Hamilton is a Senior NBA Columnist for SheridanHoops.comFollow him on Twitter.

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