How Allen Crabbe’s Trade Bonus Affects the Blazers

Allen Crabbehas three years and $56 million remaining on his contract. Throw in a 15 percent trade bonus (i.e. “trade kicker”), and Crabbe’s contract will have an impact on any major trades the Blazers hope to make this summer. Here are the details:

Calculating the trade kicker

If the Blazers trade Crabbe this summer he will receive a 15 percent bonus for the remaining value of his contract, option years excluded. Since Crabbe’s deal ends with a player option, that means he’ll get a bonus equivalent to 15 percent of the $37.8 million he’s owed over the next two years.

The 15 percent bonus will be spread evenly over the remaining non-option years of the deal. This table summarizes the raw math:

How does Crabbe’s kicker affect trades?

The NBA has rules dictating that teams over the salary cap must “match” salary when making trades - basically, teams have to take back roughly the same amount of money as they send out.

Trade kickers affect the way that salaries are matched when teams make trades. The team giving up the player only gets “credit” for the pre-kicker salary, while the team receiving the player has to have room for the post-bonus salary.

In practice this means that the Blazers are sending out $19.3 million to trade Crabbe but the receiving team is taking on $22.2 million. There are two disadvantages to this:

1. Depending on the other team’s cap situation, the Blazers must take on at least $17.2 or $17.7 million. Without the trade kicker the Blazers could have taken back as little as $14.3 million or $15.4 million. Taking on extra salary increases the Blazers tax hit and ensures that they stay on over the apron - any lost opportunity to shed money just reinforces that.
2. Since the Blazers only get credit for the pre-bonus salary, they will only be able to take back $24.3 million (pre-bonus contract x 125% + $100,00)., instead of $27.8 million (post-bonus contract x 125% + $100,00). Teams might be less willing or less able to make trades since the Blazers are limited in how much money they can receive.

Overall, Crabbe’s trade bonus means that there is a more limited range in the amount of salary the Blazers can receive when trading him. Given how complicated salary matching can be, that may hinder potential deals. Also note that this math assumes a one-for-one trade—an unusual scenario in the NBA. Factoring in other players will make it even more difficult.

Who pays the trade bonus?

The Blazers would be responsible for paying Crabbe the bonus, but the Nets, as the receiving team, would take the cap hit for the bonus. Basically, the Blazers would be responsible for part of the Nets’ cap hit. Importantly, the bonus will NOT count toward Portland’s luxury tax bill.

What about sign and trades?

Blazers have to stay below the apron AFTER the trade—$6 million over the cap—to complete a sign and trade. They are already well over that, so they need to shed about $6 million in guaranteed deals before even accounting for the draft picks andTim QuartermanandPat Connaughtonto complete a sign and trade.

Crabbe’s deal ensures they will take on more money than usual and would make it more difficult to stay under $6 million in a sign and trade.

Can Crabbe’s trade kicker disappear?

Crabbe can waive his trade bonus, as long as he’s not being traded to a team that would go over the apron by acquiring him.Given comments he made in Brooklyn early this season, he might be willing to do that, but there is no way to know for sure.

Bottom Line

If the Blazers do decide to trade Crabbe it will likely be to a team that, 1) Has young players on rookie deals for several seasons so they don’t need to worry about paying a role player a near max salary, 2) Needs a starting shooting guard with a high 3-point percentage, and 3) Is under the cap and so doesn’t need to worry about salary matching.

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Eric Griffith | @EricG_NBA