The Washington Wizards may have gotten a weak return for Monte Morris in the trade with the Detroit Pistons, but they were able to create a significant trade exception worth $9.8 million. This could be a key asset to add more talent or draft picks for the Wizards going forward.
A trade exception occurs when a team gives up more salary than it acquires in a trade. This “credit balance remains as an exception that can be used within the next year to acquire salary via trade without further relinquishing additional salary.”
This is exactly what the Washington Wizards accomplished with the Monte Morris trade. Now, they can add a salary of $9.8 million for the next 12 months without giving up anything.
The Wizards also have a $6.2 million trade exception that they generated in the Rui Hachimura trade at the 2022-23 trade deadline.
So, what can they do with these two exceptions?
This opens the door for imbalanced trades where the Wizards can take on bad contracts from teams trying to shed salary. Washington can play a facilitator role in multi-team trades to take on any salary other teams don’t want in their books.
By doing this, the Wizards would receive additional draft equity or young players in the deal.
One example of such a trade was done by the Dallas Mavericks this offseason. After creating a $17 million trade exception by dumping Davis Bertans to the Oklahoma City Thunder, the Mavericks used that “credit balance” to acquire Richaun Holmes’ unwanted contract worth $12 million a year from the Sacramento Kings. For their troubles, Dallas received Sacramento’s first-round pick in the 2023 NBA Draft.
This is a model Washington can replicate. The Wizards are in asset accumulation mode, so if any team is trying to get rid of their negative salary in exchange for draft picks, the Wiz need to take advantage of that. It could be a crucial asset for Washington’s rebuilding process.
It will be fascinating to see how the new front office uses these trade exceptions. The active offseason in Washington continues.