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Tuesday, December 04, 2012

Nazr Mohammed and Trade Kickers

Even though he signed a one year minimum salary contract using the Minimum Salary Exception, Nazr Mohammed has a 15% trade kicker in his current contract.

Trade kickers in contracts are somewhat rare. They are particularly rare in small contracts, as becomes obvious upon a study of the current trade kickers in the league today:

Ray Allen - 15% - $3,090,000
Andrea Bargnani - 5% - $10,000,000
Nic Batum - 15% - $10,825,000
Chris Bosh - 15% - $17,545,000
Jose Calderon - 10% - $10,561,982
Vince Carter - 10% - $3,090,000
Tyson Chandler - lesser of 8% or $500,000 - $13,604,188
Pau Gasol - 15% - $19,000,000
Manu Ginobili - 5% - $14,107,492
Eric Gordon - 15% - $13,668,750
Blake Griffin - 15% - trade kicker is in his extension, beginning next year
Udonis Haslem - 15% - $4,060,000
Roy Hibbert - 15% - $13,668,750
LeBron James - 15% - $17,545,000
Amir Johnson - 5% - $6,000,000
DeAndre Jordan - 15% - $10,532,977
Brook Lopez - 15% - $13,668,750
Robin Lopez - 15% - $4,899,293
Shawn Marion - 15% - $8,646,364
O.J. Mayo - 15% - $4,020,000
Mike Miller - 15% - $5,800,000
Nazr Mohammed - 15% - $1,352,181 (cap number of $854,389)
Steve Nash - 15% - $8,900,000
Derrick Rose - 15% - $16,402,500
Josh Smith - 15% - $13,200,000
Jason Terry - 7.5% - $5,000,000
Jason Thompson - 5% - $5,250,000
Anderson Varejao - 5% - $8,368,182
Dwyane Wade - 15% - $17,182,000
Deron Williams - 15% - $17,177,795
Metta World Peace - 15% - $7,258,960


Furthermore, many of those trade kickers are in contracts that are already paying the maximum salary to the relevant player. As kickers cannot be used to increase a salary to an amount greater than the max, those kickers are thus pretty much redundant. [As for why anyone puts them in, then - well, why not? What if the max gets bigger? Unlikely, but plausible.] Very few trade kickers actually matter, then. Indeed, of all the contracts in the league today, only three contain already-enacted trade kickers. Of those three, one was partially waived in order to facilitate the trade (Hedo Turkoglu), and one was redundant for the aforementioned maximum contract reasons (Chris Paul). That leaves Luke Walton as the one example of a current contract that was increased by a trade kicker. In a bloviated way, the point is hereby made - trade kickers aren't very common.

When they are given out, they are done so as leverage. If a team and a player cannot meet in the middle on contract negotiations, the inclusion of a trade bonus serves to bridge the gap; an increase in salary upon being traded gives greater incentive to accept perceived home town discounts. In Nazr's case, negotiations probably can't have gone on for too long, as there was surely no dispute as to the fact that he was a minimum salary contract calibre player.

What Nazr's trade kicker does it make him harder to trade. The minimum salary exception allows teams not only to sign players to the minimum salary for one or two seasons, but also to trade for players signed to the minimum salary for one or two seasons. This is why trades such as bench warmers for second rounders happen quite often, and why so many pedantically small trade exceptions exist. By having a trade kicker in his deal, Nazr makes himself more difficult to trade (which, considering Chicago's proximity to the hard cap, may well be considered some day soon). Unless he opts to waive it, the trade kicker pushes his contract above the minimum, making it no longer absorbable by the minimum salary exception or a similarly sized trade exception. And so thus the recipient team must either match the salary, have a bigger trade exception, or have the cap room to absorb his salary outright. This limits the number of potential Nazr Mohammed trade partners; the difference is very negligible, but impactful enough to merit commentary.

Here's the real question - where did he get sufficient leverage to warrant such a tool?

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