Why a potential sign-and-trade involving Kyrie Irving is trickier than it looks

The Celtics don’t know yet if Kyrie Irving will be walking away from the franchise come July but a likely first move by the front office, if Irving does leave, will be trying to secure some sort of opening for potential future compensation for the point guard via a sign-and-trade. Barring a mass exodus of the team’s free agents (Horford, Baynes, Rozier, Morris), the Celtics will not have cap room even if Irving walks, making the only true way to eventually help replace the All-Star would be including him in a sign-and-trade to his next destination in order to secure a trade exception that can be used in another deal.

This type of scenario is far from a sure thing to happen if Irving does, in fact, want to take his talents to New York, Los Angeles or wherever else across the country. He has to be willing to go along with a swap (he will make no additional money being part of a sign-and-trade), while any team receiving him would have to have some incentive to go along with the trade since most of Irving’s suitors will have the necessary cap room to sign him outright. Essentially, the Celtics would have to include something (likely a first-round draft pick) along with Irving in order for Irving’s next team to help the Celtics out. Even then, an Eastern Conference rival may refuse to go along with such a deal in order to leave the Celtics in a tough spot from a team-building standpoint without Irving.

Normally, a sign-and-trade deal works simply for a team that is over the salary cap (like the Celtics would be this summer). Normally, if the C’s trade Irving to a team with enough cap room to absorb his salary ($32.7 million), they would receive a trade exception for that amount (assuming they don’t take back any salary as part of the deal).

Trade exceptions last for one full year in the NBA and allow teams to absorb a single player via trade without needing to match salaries to execute a trade. Essentially, it’s a very valuable potential tool for the Celtics to use to try to help fill the void that Irving’s departure would bring. The Celtics would need to obviously provide the necessary compensation needed to land any other player via a future trade but they wouldn’t have to worry about the salary matching aspect for their own players in a hypothetical deal, which can be a big hurdle in making trades happen.

The fine print of the NBA collective bargaining agreement, though, makes a sign-and-trade scenario much trickier for Irving however and most of Boston’s key free agents (Morris, Rozier) this offseason. Since Irving, Morris and Rozier are in line for big raises (more than 20 percent of their previous salary) they are subject to a unique provision of the CBA that limits the size of a trade exception the Celtics can be granted in a hypothetical sign-and-trade.

This provision is called base-year compensation or is commonly referred to as BYC. The provision applies to teams that are over the salary cap and give a player more than a raise of 20 percent from their previous salary while including them in a sign-and-trade. At that point, the player’s cap figure for salary matching purposes is impacted in said deal.

Let’s use Irving as an example to see how this would work. He made just $21 million in 2018-19 and

his new (expected) deal is set to begin at $32.7 million per year so that’s an increase of about 50 percent, which makes him fall under this BYC rule since it’s over a 20 percent raise.

So what exactly happens when this rule comes into play? It hurts the Celtics since the trade exception a team receives for trading him only counts for 50 percent of his previous salary or whatever his 2018-19 salary was (whichever is higher). So let’s do the math here with Irving to try to make sense of it.

50 percent of Irving’s new expected salary: $16.35 million
Previous Irving salary: $20.1 million

The previous salary is higher, which means the Celtics would only get a $20.1 million trade exception for him in any sign-and-trade, which is far less than the $32.7 million salary he will have signed for, the number that the team would have received as a trade exception if BYC rules didn’t apply.

This provision will hurt the Celtics brass in such a scenario since there are far fewer All-Star caliber players that make $20.1 million compared to $32.7 million. Boston could certainly land a strong player making $20 million or less with the exception in the event Irving is signed-and-traded but some of their potential top-tier targets (Bradley Beal, Mike Conley, Anthony Davis) this summer all make far more than that, which would force the C’s to use traditional salary matching in any deal for them (i.e. including Gordon Hayward or a bunch of smaller salaries).

This BYC rule will also likely apply to any sign-and-trades involving Morris or Rozier this offseason as well since both are set to earn over 20 percent raises from their current salaries (Morris: $5.4 million, Rozier: $3.1 million) in their deals this summer. Sign-and-trading them is still possible, but it won’t be nearly as helpful for salary matching purposes as it would have been without the BYC rule applying.

In an offseason that is set to have plenty of fireworks, this BYC rule is a potential headache for the Celtics front office to maneuver. It won’t stop the team from pursuing sign-and-trades, but it will limit how much help it can give the Celtics when it comes to filling a void later on.