To answer this question, you would have to assume the NBA is under the expired CBA rules in this area. The base year players don't count double but they do count whatever is greater of: (1) their base year salary or (2) 50% of their new salary. Refer to the attached link and verbiage in Q&A numbers 72, 73, and 74.
http://members.cox.net/lmcoon/salarycap.htm#72
72. What is "Base Year Compensation?" How does base year compensation affect trades? Why does it exist?
Base year compensation (BYC) prevents another salary cap loophole. Without BYC, a team over the salary cap that wants to trade a player, but can't because of the assigned player exception (which says teams can receive no more than 115% of the salary they trade away), could just sign the player to a new contract that fits within the desired range, then do the trade. BYC says "if you re-sign a player and give him a big raise, then for a period of time his trade value will be lower than his actual salary."
BYC defines the salary that's used to compare players for compliance under the assigned player exception (see question number 67 for more information about the assigned player exception). Usually, the salary used for comparison is the player's actual salary. But under either of the following circumstances, a different salary is used when comparing salaries for trading purposes:
The team is over the salary cap, used theLarry Bird or Early Bird exception to re-sign the player, and the player received a raise greater than 20%.
The team is over the salary cap, it extended the rookie scale contract of the player, and the player received a raise greater than 20%.
If either of the above apply, then the player is considered a base year player. A player remains a base year player for two years (one year if the contract is signed on or after July 1, 2001). When trading a base year player, the salary used for comparison is defined as follows:
Contract signed First year BYC Second year BYC
Before July 1, 2001 Previous year's salary or
50% of first-year salary in new contract* 120% of the salary in the last year of the previous contract or
75% of the second-year salary in new contract*
July 1, 2001 or later Previous year's salary or
50% of first-year salary in new contract* N/A
*Whichever is greater
Here is an example of a BYC calculation: A player earned $2 million in 99-00, after which he became a free agent. Prior to the start of the 00-01 season, he signs a new contract (re-signing with his previous team, which is over the salary cap) starting at $9 million. This player qualifies for BYC, so his trade value is the greater of his previous salary ($2 million) or 50% of his new salary ($4.5 million), or $4.5 million. So this player, who actually earns $9 million, is worth $4.5 million for trading purposes.
When comparing salaries for trade, teams use their own player's BYC value and the other player's full salary, even if the other player is also BYC. Here is a simple example -- two $5 million players, both of whom are re-signed (by teams over the cap) for $10 million. Both players become base year players whose base year amount is $5 million (50% of the new salary). If the teams want to trade these players for each other they compare their player's base year amount to the other player's full salary. So each team can take back a maximum of 115% plus $100,000 of their player's $5 million base year amount, or $5.85 million. They compare $5.85 million to the other player's full $10 million. $10 million is way too high, so this trade can't be done, even though the players' actual salaries match exactly.
If one of the teams in the above example was below the cap, the trade still couldn't be done. For the team under the cap, their player would NOT be BYC, so they would be comparing $10 million to $10 million. But since the other team is over the cap, their player is BYC, and they'd still be comparing $5.85 million to $10 million, which prevents the trade from working. (See question number 74 for more information about trading BYC players.)
For Larry Bird or Early Bird players, the player's BYC begins on the date he signs his contract. For extended rookie scale contracts, the player's BYC begins on the July 1 preceding the first season of the extension. For example, if an extension of a rookie scale contract is signed on 10/30/99, his BYC begins on 7/1/00, because the first season of the extension is 00-01. If a team tries to trade an extended rookie between the date his extension is signed and the date it takes effect, his "trade value" for the receiving team is the average of the salaries in the last year of the scale contract and each year of the extension. This is called the "poison pill provision."
A player's BYC goes away if the team falls below the salary cap, the player signs with a different team, or the player is traded.
There was an interesting twist to base year compensation caused by the 1998 lockout. Since the start of the 98-99 season was delayed, contracts signed prior to the 98-99 season were signed in February 1999. The duration of BYC is specified in calendar years and not seasons, so for contracts signed in February 1999, the BYC amount changed in February 2000, which is in the middle of the 99-00 season. It then expired in February 2001, which was in the middle of the 00-01 season. So for these players, in addition to the mid-season change, BYC lasted into the third season of their contracts.
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73. How does a base year player's salary count against the team's salary cap?
His actual salary is included in the team salary. BYC is used only when comparing salaries for trades.
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74. Whenever I read about prospective trades involving base year players, they always say a third team must get involved. Why? Can't a base year player be traded in a two-team trade?
There's no specific rule that prohibits trading base year players in a two-team deal. But the way the numbers work, it's not always possible unless one of the teams dumps additional salary onto a third team.
As an example, let's say Player A plays for Washington. He earned $3 million last season and re-signed as a free agent for $10 million. That makes him a base year player whose BYC value is $5 million (see question number 72 ). Player B plays for Seattle and also earns $10 million, but is not a base year player. Both Seattle and Washington are over the salary cap.
Now suppose Seattle and Washington want to trade Player A and Player B for each other. Seattle can take back 115% plus $100,000 of Player B's $10 million salary, or $11.6 million. Player A's $10 million salary easily fits within that limit. But Washington can only take back as much as 115% plus $100,000 of Player A's $5 million BYC value, or $5.85 million. Player B's $10 million salary is too high by $4.15 million.
This means, if the two teams want to complete this trade, that Washington must rid themselves of an additional $3.61 million in salary (I'll show why this is the correct amount a little later). Let's say that Player C plays for Washington, is not a base year player, and earns exactly $3.61 million. What happens if they want to trade Player A plus Player C for Player B? Player A plus Player C total $13.61 million, which is greater than Seattle's $11.6 million maximum. So Washington can't give the additional $3.61 million to Seattle.
This is where a third team must get involved. This team must be far enough under the cap, or has a trade exception (see question number 68 ) to absorb the additional $3.61 million in salary. Let's say Chicago (a team way under the salary cap) gets involved. Here is an example three-team trade:
Washington sends Seattle Player A
Seattle sends Washington Player B
Washington sends Chicago Player C
Chicago sends Washington a future second round draft pick
Here's how the numbers work:
Washington trades $5 million BYC plus $3.61 million salary, or $8.61 million. They can receive 115% plus $100,000 of $8.61 million, or exactly $10 million, in return (this is why $3.61 million was correct above). Washington receives Player B's $10 million salary, along with a draft pick that has zero trade value (see question number 70 ) for a total of $10 million. The numbers exactly match.
Seattle trades $10 million in salary, and recives $10 million in salary, so they're fine.
Chicago trades $0 and receives $3.61 million, but since they're more than $3.61 million under the salary cap, they can absorb the increase.
So the numbers work for all teams involved.
However, not all trades involving base year players require a third team. Let's say Player D plays for Washington. He earned $8 million last season and re-signed as a free agent for $10 million, so his BYC amount is $8 million (see question number 72 ). Washington can take back as much as 115% plus $100,000 of $8 million in trade, or $9.3 million. Player E plays for Seattle, is not a base year player, and earns $9 million. So Seattle can take back as much as 115% plus $100,000 of $9 million, or $10.45 million.
Player D and Player E can be traded for each other directly, even though Player D is a base year player. Player E's $9 million salary is less than Washington's $9.3 million maximum, and Player D's $10 million salary is less than Seattle's $10.45 million maximum. The teams have even more flexibility if one or both have a trade exception (see question number 68 ) or disabled player exception (see question number 17 ).
So a trade involving a base year player doesn't necessarily require a third team.
