How Sign-and-Trades Work
A sign-and-trade is a transaction where a team re-signs a free agent and immediately trades them to another team. This benefits everyone: the player gets a larger contract (5 years instead of 4, or 8% raises instead of 5%), the receiving team acquires a player they couldn't sign outright, and the original team gets assets instead of losing the player for nothing.
Recent sign-and-trades like Jimmy Butler to Miami and Kevin Durant to Brooklyn have reshaped franchises. See also: Bird Rights, Salary Cap, and Buyout Market.
Frequently Asked Questions
What is a sign-and-trade?
A transaction where a team re-signs their free agent player and immediately trades them to another team. Both teams and the player must agree to the deal.
Why do players want sign-and-trades?
Players can get a 5th year on their contract and 8% annual raises (vs 4 years and 5% raises signing outright with a new team). This can mean $30-50M more over the life of the contract.
What are the restrictions on sign-and-trades?
The receiving team must be under the luxury tax apron. The contract must be at least 3 years (last year can be partially guaranteed). The player can't be combined with other players in the trade.
Can a sign-and-trade be used with restricted free agents?
Yes, but it's less common. The original team typically prefers to simply match the offer sheet or negotiate an extension rather than facilitate a trade.