Calculating the Hedo Turkuglo TPE (Traded Player Exception)

How much is the Hedo TPE?

[UPDATE II 8/25/2009: It appears that Hedo's 2008-2009 salary was $6,864,200 (at this site).  Add the allotted $100,000 and the Hedo TPE should be $6,964,200.]

[UPDATE 8/24/2009: Further reading leads me to believe that ESPN was right after all.  Since Hedo received a greater than 20% raise, he becomes a Base Year Compensation Player (BYC) and the trade value is either the previous year's salary ($6.8M) or 1/2 of the new salary (~$4.35M) , whichever is greater---$6.8M in this case. Oh well, still quite potentially useful.]

ESPN's Trade Machine lists it at $6.8 million.  I think they are getting that figure by using the last year of Hedo's 2008-2009 contract with the Magic.  Due to the way the NBA and teams [don't] release information, actual contract numbers can be difficult to come by, so I understand why ESPN might just plug a number in.

Due to the lack of being able to find another reliable source or dollar amount , I think a number of people (self included, sorry) have assumed ESPN's accuracy and have used the $6.8 million as the ceiling for the TPE.

I now think this number is too low.

It seems to me (and I'm happy to be corrected if someone can provide substantiated data) that the TPE is equal to the value of the first year of Hedo's contract with Toronto

Follow this logic:

  • Hedo was sent to Toronto as a sign & trade, therefore....
  • He had to sign with the Magic and then be traded to Toronto (that's why they call it a sign & trade)....
  • The Magic were over the salary cap when the Hedo contract was signed....
  • Teams over the salary cap (Orlando, in this case) are restricted to trades for players whose contracts are (as a total) equal, plus or minus 25%, +/- $100,000....
  • But, teams under the salary cap (Toronto, in this case) can take on contracts up to the salary cap, plus $100,000 before the +/-125% rule kicks in....
  • Since Toronto was under the cap and we didn't take any players back in the trade, we should get a TPE based on Hedo's contract....
  • Hedo's total contract is reported at $53 million (this is likely a rounded number)....
  • If the contract was signed with 10% raises (since we had Hedo's Bird Rights), the first year is probably worth ~$8.7 million minimum  (~8.7/9.6/10.5/11.5/12.7)...
  • If the contract was signed with 8% raises (as is the case for free agent contracts with a new team), the first year is worth either $9 million minimum or just a tad over (~9.0/9.7/10.5/11.3/12.4)...
  • Hedo's first year salary, then, is probably somewhere between $8.7 and $9.0 million (ESPN is listing it at $9.0 million)....
  • By my reading of the NBA Collective Bargaining Agreement (VII.6.h.1.ii), the TPE can be used in a later trade equal to the traded player's salary plus $100,000.....

So, $8.7 or $9.0 million plus $100,000 means, by my math, we are looking at a TPE between....

$8.8 and $9.1 million. [revised again to $6.8M, and finally to $6.9--see UPDATES at top]


Now feel free to dream about how we use it....

This FanPost was made by a member of the Orlando Pinstriped Post community, and is to be treated as the opinions and views of its author, not that of the blogger or blog community as a whole.

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