At the start of the offseason, the Chicago Bulls completed an unexpected trade. They moved veteran guard Lonzo Ball to the Cleveland Cavaliers, just as the extension they had given him as recently as February was beginning, in exchange for Isaac Okoro.
A recent report indicates that doing the Ball/Okoro deal as early as they did may have cost the Bulls a chance at Golden State Warriors free agent forward, Jonathan Kuminga. Certainly, there seems to be little reason for them to have made such an innocuous deal so early in a volatile market. Yet there exists another downside to both the timing of the deal and the manner of its completion that has weakened the Bulls’ ability to make any follow-up moves.
The trade was a relatively straightforward one-for-one swap, with no one else nor any draft picks attached. In a world of seven-team trades, this was seemingly very simple. But as always, NBA trade math can be complicated, even when it is simple. And due to the particulars of Ball’s contract, the Bulls have had to use up an asset they were not expected to have to touch, just to complete the deal.
Bulls Required To Match Salary
Like most teams at most times, both the Bulls and Cavaliers are over the NBA’s salary cap. And teams over the NBA salary cap have to indulge in the practice of “salary-matching” if they are going to trade players.
Successive NBA Collective Bargaining Agreements have liberalized the parameters of salary matching to the point that “matching” often does not require anything close to a one-to-one equilibrium. Indeed, the tolerances are getting wider, as long as the team involved is not battling against the aprons. It is nonetheless a requirement that salary-matching take place for over the cap teams, in some form.
Specifically, if teams over the salary cap (as calculated at the completion of the trade) but below the first apron are sending out between $7,500,001 and $29,000,000 in guaranteed 2025-26 salary, they can take back anything up to the amount they send out, plus $7.5 million. If they are sending out less than $7.5 million in guaranteed salary, they can take back up to 200% of what they send out, plus $250,000.
The key word there, however, is “guaranteed”.
Unguaranteed Contracts In Trades
Not so long ago, it used to be the case that unguaranteed contracts counted in trade math for the amount of salary called for, including the unguaranteed portion. This led to unguaranteed contracts being coveted in trades where one party was seeking to dump salary. For example, a team could trade a player on a $10 million guaranteed contract for a player on a $10 million unguaranteed contract, waive the received player straight away, and save themselves $10 million. (A particularly noteworthy example of this practice was the 2010-11 contract of Erick Dampier.)
Since 2011, though, this practice has been dispensed with. Now, the outgoing value of an unguaranteed contract is equal only to the amount of the guarantee, not the overall salary called for. If the aforementioned hypothetical $10 million player had a mere $1 million guarantee, then, their outgoing salary for salary-matching purposes would be only $1 million, not $10 million.
This is relevant to Ball and the Bulls, because his extension had a clause that affected his guarantee.
Bulls Fall Foul Of Their Own Cautious Decision
Ball’s extension that begins in 2025-26 calls for a flat $10 million salary, but his contract also contained details in its Exhibit 3, or the “Prior Injury Exclusion” clause. In such clauses – which are rare – contracts can call for reductions in the amount of guaranteed salary a player is owed, if certain already-known injuries recur or are exaggerated in the course of the player’s fulfilment of the contract.
That is to say, the Prior Injury Exclusion clause lists what injuries might reduce a player’s contract guarantee amount if they reoccur, as well as how much it will reduce by.
It is understood by Heavy that Ball’s Exhibit 3 includes both his long-standing knee issues and the wrist injury that ended his 2024-25 season early. In the event of either injury costing Ball at least seven games in the prior season, the language in the Exhibit 3 is reported to call for his contract guarantee amount to go from $10 million to $0.
Ball did indeed suffer those injuries. The Exhibit 3 was thus triggered, Ball’s contract became unguaranteed, and the trade with the Cavaliers deal needed to be reworked.
The Value Of Traded Player Exceptions
As a result, the Bulls had to find another way to receive Okoro’s salary. Their outgoing salary was $0, in light of Ball’s knee and wrist, and yet per the above, they still needed to get within $5.375 million of Okoro’s $11 million salary to complete the prima facie deal.
With no other players outgoing, nor any cap space to absorb his contract into, the Bulls therefore would need to use a Traded Player Exception. Traded Player Exceptions (or TPEs) essentially function as time-delayed trades, allowing teams over the cap to take on more salary than they send out without requiring the above salary matching rules.
The good news is that the Bulls had one such TPE. As a part of their February-time trade that sent Zach LaVine to the Sacramento Kings, a TPE worth $17,186,573 was created, allowing the Bulls to take back that amount in trade without sending any out. Which is exactly what was needed in the Okoro deal.
The bad news is that they have now used $11 million of that TPE on Isaac Okoro. What could have been an excellent trade chip in a bigger deal will instead be used to acquire an eighth man, all because of the unguaranteed portion being triggered in Ball’s contract. The Exhibit 3, which the Bulls had included to mitigate their risk in the extension in the event that Ball got reinjured, had in fact come back to bite them.
Bulls Could Have Found A Workaround
What the Bulls could have done instead is renegotiated the amount of guaranteed salary with Ball.
Although the circumstances under which an NBA team can renegotiate an active contract are very hard to come by, renegotiating an amount of guaranteed salary on an existing contract is generally permissible. While the Bulls could not reduce the $10 million Ball was slated to have received, they could have agreed to increase his guaranteed amount to the requisite $5.375 million prior to the trade. [It is hereby assumed, for the sake of argument, that the Cavaliers would still have done the trade with Ball having $5.375 million guaranteed, rather than zero, although this is not provable either way.]
Had they done so, the Bulls could have salary-matched Okoro with Lonzo, and kept the TPE. But they did not do so. Instead, they had to break off the majority of their best trade asset, and in doing so, allow Cleveland to create a new $11 million TPE of their own. As always, NBA trades are complicated – even when they are simple.
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