To say it’s been a busy offseason for Thunder general manager Sam Presti would be an understatement. The team hired a new head coach and traded some of the key members of last season’s overachieving club.
None of the moves, however, hit Thunder fans as hard as the multi-team trade that saw Steven Adams sent to the New Orleans Pelicans.
In case you missed it, the Thunder executed a four-team trade with the Pelicans, Nuggets and Bucks which, among other things, landed the Thunder a future first-round pick, two future second-round picks and a $27.5 million trade exception.
According to ESPN’s Bobby Marks, the $27.5 million trade exception is the largest trade exception created in NBA history. It is yet another valuable asset that Presti has been able to create as he’s pared down his roster and prepared to build from the ground up.
For those wondering what a trade exception is, it’s an exception that will allow a team to trade for a player without sending any salary out in a trade. Trade exceptions are created when a team trades a player to an under-the-cap team and don’t take an equal amount of salary back in return. In effect, a player who is traded in this manner is traded for salary cap space.
The $27..5M trade exception that OKC has created from the Steve Adams trade to NOP is the largest (for now) in NBA history. OKC will have a year to use.
— Bobby Marks (@BobbyMarks42) November 24, 2020
With respect to Adams, what this means for the Thunder is that the team has a $27.5 million trade exception. In theory, the Thunder could execute a trade with any other team for a player making up to that amount without having to take an equal amount of salary back in a trade. For example, if the New York Knicks decided it wanted to trade Julius Randle to the Thunder, the Thunder could absorb Randle’s current salary ($18.9 million) without having to send any salary back out to New York. The trade exception will expire one year from now.
So, how does the trade exception help the Thunder?
It’s quite possible that the team will use it to absorb the contract of a player who is no longer valued by or afforded by its team. For example, if Team X is $10 million over the luxury tax threshold, it could theoretically trade Player B to the Thunder. The Thunder could absorb Player B into its salary exception. In such an instance, it’s commonplace for this type of transaction to result in the tax team paying the a team like the Thunder draft pick compensation in such a transaction.
So yes, while the Adams deal in and of itself netted the Thunder a few draft picks, in all likelihood, the trade exception will end up being another gift that gives away.
Presti deserves credit for this.