trade

A contractual provision in a National Basketball Association player’s contract that grants the player a bonus if they are traded. This bonus, typically expressed as a percentage of the remaining salary on their contract (up to the maximum allowable under the Collective Bargaining Agreement), is triggered if the player is traded to a new team. For instance, a player with a 15% bonus on a remaining salary of $20 million would receive an additional $3 million payment upon being traded.

The presence of this clause can significantly impact a team’s decision-making process when considering trades. It effectively increases the player’s value by the bonus amount, making the acquisition more expensive for potential acquiring teams. Historically, this provision has been used to provide players with added financial security and influence over their destinations, as teams may be less inclined to trade them if doing so incurs a substantial bonus payment. It can also be used as a negotiation tool during contract talks, with players potentially accepting a lower base salary in exchange for the inclusion of a lucrative trade bonus.

Read more