The Oklahoma City Thunder currently have three traded player exceptions, or TPEs. Although only two should be discussed. Both were created when Derrick Favors and Ty Jerome were traded to Houston last offseason. The two TPEs brought in $10.18M and $4.22M respectively.
Why are those numbers important?
The tradeable player exception allows teams under the luxury tax threshold to take on salary without necessarily sending salary.
Oklahoma City is currently a tax-exempt group.
So, according to the NBA’s Collective Bargaining Agreement, or CBA, the Thunder could get players worth between $10.18M and $4.22M this season, sending nothing or very little in return.
But there is only one problem. The Thunder have a fully loaded roster and no cap space to bring in anyone, let alone two players, to make that concept a reality.
This is where things get a little complicated. Since the Thunder need roster space to acquire a player, someone will need to be traded or waived to make room to fully utilize the TPE(s) at the deadline. And that’s not easy because the Thunder love so many of their players.
However, if the right opportunity presents itself, like a juicy James Wiseman deal or another high-potential draft asset, he could convince the Thunder to part with one or two of their guys.
In their current position, the Thunder are far from the worst team in the league, but they are not contenders either. They are patiently waiting for the right moment to get their franchise off the ground and put the chips in again. Now doesn’t seem like that time.
So, in the meantime, the Thunder can use their TPEs, giving relief to teams looking to reduce their luxury tax bill. Some teams are willing to pay in the form of picks and/or prospects to do that.
There are also 10 franchises currently spending over the luxury tax threshold this season. And for every dollar spent over the threshold, owners must pay multiple times. For example, they may have to pay two dollars for one dollar. And the more teams spend, the higher the multiplier will be.
Things can get expensive and fast.
For example, the Golden State Warriors payroll is about $39.2M above the standard. But their estimated bill of $170 million is huge – major league. If you do the math, you’re paying about $4.34 in taxes for every dollar spent over the luxury tax threshold.
Even billionaires don’t want to pay that much in taxes.
However, the military had a salary of 6.0 million dollars. That would save them roughly $26.4M in taxes. If a team-friendly move doesn’t significantly affect their title chances, or if they want to keep their costs down.
The Thunder have few trade candidates this season, but anything can happen if the right opportunity presents itself. One player who will soon find himself on the trade block is fourth-year forward Darius Bazley.
Bazley is in the final year of his rookie deal and hasn’t gotten much playing time. And when he does, the play has been the epitome of ups and downs.
Another candidate is Mike Muscala.
While the 31-year-old veteran is by no means the ultimate professional and best locker room presence and has helped a young Thunder team with his floor-spacing skills, it’s hard to see him being a long-term fixture. Timeline of the reconstruction.
Bazley’s salary alone would give the Thunder $7,563,100 in salary cap space. And Muscala offers only $6,225,000. That doesn’t leave much room for taxpayers to cut their payroll because they’ll only save $3M to $4M after buying one or the other.
But because of the TPE created in the Favors-to-Houston deal, the Thunder may have an opportunity to cut or trade one or the other and use their $10.183M trade exception to leave the tax-burdened franchise. A valuable asset or two.
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