98. Can cash be included as part of a trade package?
Players can be traded for cash, and cash can be included in trade packages. The amount of cash a team can pay or receive per season is limited to the "Maximum Annual Cash Limit," which is $5.1 million in 2017-18, with the amount in each subsequent season determined by applying the percentage change in the salary cap to the previous amount. For example, if the salary cap increases by 4% from 2017-18 to 2018-19, then the Maximum Annual Cash Limit will increase by 4% from 2017-18 to 2018-19.
SeasonAmount
| |
2017-18 | $5.1 million |
2018-19 | $5.243 million |
2019-20 | $5.617 million |
2020-21 | $5.617 million |
There are two separate limits, one for the cash a team pays as part of trades each season, and the other for the cash a team receives as part of trades each season. For example, in 2017-18 a team may pay up to an aggregate $5.1 million in all trades it makes during the season, and it may receive up to an aggregate $5.1 million in all trades it makes during the season.
The cash applies to the current season's limit even if it changes hands in a future season. For example, suppose a team trades a draft pick that is top-20 protected this season, top-10 protected next season, and converts to $1 million cash if a pick is not conveyed by next season. $1 million is applied to the team's Maximum Annual Cash Limit for the current season.
Cash is NOT considered when matching salaries under the Traded Player exception. For example, a taxpaying team cannot add $3 million cash to a trade of their $5 million player in order to acquire a $10 million player.
In a sign-and-trade arrangement, if the contract contains a signing bonus, then any amount of this bonus paid by the signing team counts toward the team's Maximum Annual Cash Limit (see question number 92).