The sign-and-trade, that old bastion of salary cap flouting that has allowed nominal stars win fatter contracts and high-spending teams to add stacks on stacks on stacks onto their payroll, has survived the latest round of NBA lockout talks, reports ESPN shark Marc Stein. Owners had sought to kill the sign-and-trade in order to help level out team payrolls, but have apparently conceded that request.
NBA Lockout Talks: Sign-And-Trades Survive Negotiations, Says Report
Stein also reports that still up in the air is whether teams over the luxury tax will be allowed to use the sign-and-trade. The players’ union has expressed wide concern about the league creating a luxury tax line that effectively acts like a hard salary cap; putting restrictions on the types of moves that can be made at the tax line would fit that concern.
Sign-and-trade contracts are typically used in two situations: when a team near or over the salary cap wants to acquire a free agent and has an asset the free agent's incumbent team is interested in (see: David Lee to the Golden State Warriors) or when a free agent is leaving for a team with cap space but wants to sign a Birds right deal with its longer allowable terms and higher allowable annual raises (see: LeBron James and Chris Bosh to the Miami Heat).
Keeping the sign-and-trade around will help facilitate a high level of player movement. But its cost is payroll parity. The negotiation on the luxury tax clause will be an important one.
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