Trade Kicker - A Trade Bonus

The 'poison pill' clause can make trading a player difficult.

A trade kicker -- also called a "trade bonus" -- is a contract clause that requires increasing a player's salary in the event of a trade. Trade kickers are one of the issues that can make NBA trades difficult to complete.

Trade Kicker Example

During the 2009-10 season, Devin Brown of the New Orleans Hornets was able to block a trade because he refused to waive a kicker in his contract. "The Hornets nearly traded Brown to Minnesota in hopes of reducing their luxury-tax bill in December, but the deal could not satisfy salary-cap requirements unless Brown agreed to waive a portion of the trade kicker in his contract," ESPN's Marc Stein wrote at the time.

"Brown declined."

The Hornets did eventually trade Brown to the Chicago Bulls, but Chicago had to pick up -- and pay Brown -- the  $107,075 in bonus money he was owed. Concurrently, the Hornets were able to save that same amount against the salary cap, freeing up a bit of extra money to spend on other players.

Trade Kicker Considerations

New York Knicks player Carmelo Anthony had a huge trade kicker in his contract in 2015, when there was speculation that he might be traded after Brooklin posted a particularly poor record that season. But, his trade kicker made this almost impossible, as Dan Feldman of NBC Sports explained.

"Anthony’s contract contains a 15% trade kicker, which means if traded, he gets a bonus of 15% of the contract’s remaining value (including the season following his early termination option) from the Knicks," Feldman explained. "That bonus is allocated across the remaining years of his contract."

The Poison Pill

This may sound complicated, but it's not just about the money. Trying to trade Anthony would have necessitated paying him his trade bonus. "But there’s the major catch," Feldman noted. "Anthony’s compensation -- salary plus trade bonus -- in the season of the trade can’t exceed his maximum salary as defined by years of service or 105% his previous salary, whichever is greater."

This made trading Anthony essentially impossible -- unless he waived his bonus -- making the trade kicker the equivalent of a poison pill. The irony is that the bonus was so high not because Anthony was playing hardball but because he took a smaller raise that season to give the Knicks extra salary cap space, Feldman noted.

Wild Speculation

Trade kickers have long provoked wide speculation when discussing trade rumors. For example, Hoop Rumors ran an article in 2016 listing 30 NBA players together with their trade kickers, which ranged from 5 to 15 percent. Ironically, it's the teams, themselves, that have come to see trade kickers as an effective bargaining strategy -- blocking other franchises from acquiring their best players. Trade kickers "represent one of the tools teams have to differentiate their free agent offers from the deals competing clubs put on the table," notes Hoop Rumors.

The trade kicker, which might have initially looked like a nice bonus for players, has instead become a means for teams to lock their best players in place -- and keep them where they are.