The complexity of the Paul Reed waiver + Thomas Bryant trade notes

The Paul Reed waiver was the first application of a change in the new CBA. I analyze it and discuss some implications of the Thomas Bryant trade.

Earlier today, the Detroit Pistons waived Paul Reed. They claimed him last offseason after the Philadelphia 76ers waived him to create enough cap space to complete their moves. He had two years, $15.8 million remaining on his contract, all of which is non-guaranteed.

The Pistons had $10.2 million in cap space before waiving Reed's $7.7 million salary for this season. He leaves a $2.49 million dead cap hit on their books, increasing their cap space to $15.48 million…but only temporarily.

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In the previous CBA, teams could roll over as much cap space as they’d like into the season. This became a trend with rebuilding teams like the 2021-22 Oklahoma City Thunder and the 2022-23 San Antonio Spurs.

They didn’t spend their cap space in the traditional sense on veterans who could improve them. Instead, they dedicated their roster spots to developing young players on rookie contracts which preserved significant cap space. They wanted to use their cap space to facilitate deals where they take unwanted salaries with incentives attached.

But neither team got any significant deal of the sort done during the offseason. Over the past few seasons, teams have been less inclined to attach significant value, such as first-round pick compensation, to save money. So instead, the Thunder and Spurs kept their cap space into the regular season in case better trade opportunities came up through the trade deadline.

Not only did these teams finish their respective seasons below the cap — but their payrolls were significantly below the minimum team salary floor (or salary floor for short)¹ as well. The penalty for this: pay the difference between their payroll and the salary cap to their players. So the only penalty is that the teams wouldn’t get to keep the money they were saving. If anything, maybe they viewed this as a good piece of business for their players².

So the league negotiated harsher penalties for such teams in the 2023 CBA. Now teams cannot stay under the salary floor during the season or they miss out on the luxury tax distribution³. That alone is a massive deterrent with tax distributions in recent years exceeding $10 million per team.

So with the Pistons waiving Reed, they are $1.4 million below the salary floor. So are they now at risk of being penalized? And are their other complications from getting below the salary floor mid-season?