Are NBA teams allowed to trade players on draft night? These are the rules

If you don’t understand exactly how NBA trades work, it’s not because you’re slow.

Indeed, a large majority of players don’t even know exactly how the process works, which is why they pay agents exorbitant amounts of money to do so. With that said, here’s a breakdown of the whole thing and moreover how trades work on Draft night.

An Introduction to NBA Trades

OK, aside from the basic concept of one team offering its players or picks to another in exchange for the same, there is also the league’s salary cap and the Collective Bargaining Agreement (CBA) to consider.

Where the CBA is concerned, it is “an agreement between the National Basketball Players Association and the NBA itself, that “sets out the terms and conditions of employment for all professional basketball players playing in the National Basketball Association, as well as the respective rights and obligations of the NBA Clubs, the NBA, and the NBPA,” according to the NBPA’s website. The CBA, alongside the salary cap, are the two major factors to consider when understanding trades in the league.

What’s the salary cap?

Let’s keep things simple. The salary cap is essentially the way in which the league maintains a level of equality across the league. It represents the total amount of money that a team can spend on the salaries of its players. The reason for this is to prevent teams with more money from hoarding the stars of the league.

Consider for a moment franchises such as the Los Angeles Lakers or New York Knicks, both of which are some of the most recognizable sports franchises on the planet, far less in the NBA. Few teams can match the kind of revenue that they generate in ticket sales and merchandise. Then we’ve also go billionaire owners such as Mark Cuban and Steve Ballmer. As you can imagine, smaller teams simply can’t go toe-for-toe with that kind of financial might. So, the salary cap.

If you’re wondering about whether the cap actually works, then the answer is: more or less. The cap is by no means absolute and all-encompassing as the NBA utilizes what is known as a “soft cap” which is to say there are exceptions to it, but it does work. One such exception to note is the “luxury tax” which teams pay when they go over their cap. Another is the use of what’s referred to as a “mid-level” exception which teams use when they want to sign a free agent who wasn’t already with the team. This of course is precisely why the timing and sequence of players traded is of extreme importance. To that end, some teams wait until the last possible moment to make their intentions known.

So, trades can occur on NBA Draft night?

Yes, but there are some things to note. As mentioned above it comes down to timing. To be clear, teams aren’t allowed to announce the terms of any trade prior to officially finalizing it with a conference call to the League Office.

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This rule stands throughout the year and yes, that includes the night of the NBA Draft itself. On Draft night, trades can only be announced by the NBA during the Draft telecast.

It’s important to understand that the aforementioned trade call must be made prior to the end of the Draft. Should a trade call be made after the Draft has finished, then the terms are announced by the teams involved at a time agreed upon by all parties involved.