
Section 3
Understanding the salary cap
-The salary cap is really quite simple when in the trading context. The salaries traded must be within 25% of each other. However, if a team is 10 million under the cap any money needed from that can count into this 25% difference. For example:
---Team A -$11.2 mil--------------------------Team B +$20 mil------
---Player One, 15.5 Million<===for====> Player Two, 4.3 Million------
However the team owning Player two is 20 million under the salary cap, so 11.2 million of that is factored into the deal.
At the end of the day
----Team A $0---------------------------------------Team B +$8.8 mil
----Player Two, 4.3 Million--------------------------Player One 15.5 Million
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Key Point - The salary cap is the biggest inhibitor of many trades, beware.
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