92. Can a free agent be signed and immediately traded?
The sign-and-trade rule allows teams to re-sign their own free agents for trading purposes. Under this rule the player is re-signed and immediately traded to another team. This is done by adding a clause to the contract stipulating that the contract is null and void if the trade to the specific team is not completed within 48 hours. A sign-and-trade is treated like a single, atomic transaction, and not two separate transactions between which one party can change its mind -- if the trade is not completed, then the signing is invalidated.
To qualify for a sign-and-trade, all of the following must be true:
- The player must re-sign with his prior team -- a team cannot include another team's free agent in a sign-and-trade.
- The player must finish the preceding season with that team (deals are no longer allowed that sign-and-trade players who are out of the league, such as the sign-and-trade that sent Keith Van Horn from Dallas to New Jersey as part of the Jason Kidd trade in 2008).
- The player cannot be a restricted free agent who has signed an offer sheet with another team (see question number 42).
- The team receiving the player cannot be above the "Apron" (see question number 20) at the conclusion of the trade1, 2. A team above the Apron can receive a player in a sign-and-trade if the trade reduces the team's payroll and the team finishes the trade below the Apron.
- The team cannot receive a player in a sign-and-trade if they have used the Taxpayer Mid-Level exception (see question number 25) that season.1
- The trade must be completed prior to the first game of the regular season (sign-and-trades are not allowed once the season begins).
- The player cannot be signed using the Non-Taxpayer Mid-Level exception, the Taxpayer Mid-Level exception, or any exception that cannot be used to offer a three-year contract (see question number 25).
A sign-and-trade deal can be made with a free agent who has been renounced (see question number 39), as long as all the above criteria are met. Sign-and-trade contracts must be for at least three seasons (not including any option year) and no longer than four seasons3. The first year of the contract must be fully guaranteed, but the remaining seasons can be non-guaranteed. The combination of a three-year minimum with a one-year guarantee ensures that the player's new team cannot acquire the player's Bird rights any sooner than if they had signed him directly (if they wanted to re-sign him in less than three years they would first have to waive him, and lose any Bird rights -- see question number
32).
