The Collective Bargaining Agreement can be an incredibly complicated document and one promise that I have always made to readers is that when I make a mistake, I will do my best to explain it with the hopes that working through it will reduce the chances of similar missteps in the future. This season’s trade deadline provided one of those teachable moments and I wanted to take some time to explain it.

One of my favorite projects over the last few seasons has been what I call “The Stepien List” which tries to interpret the CBA rules into a rundown of what draft picks teams can and cannot trade. That undertaking centers on understanding two key CBA concepts: The Stepien Rule and the “Seven Year Rule.”

The Stepien Rule may be the most commonly misunderstood concept but my best try at explaining it is that NBA teams cannot be without a first round pick for consecutive seasons looking forward (meaning a concluded draft does not matter at all). Keep in mind the difference between that and something preventing teams from trading picks in consecutive drafts: all the Stepien Rule says is that a team cannot be without any first round pick two years in a row. Pick protection makes this complicated because there cannot be a single scenario where a team is without a first round selection in consecutive years. 

The “Seven Year Rule” is substantially easier: teams can only trade draft picks seven years into the future. (Larry Coon’s example is that a team in 2011-12 could trade a 2018 selection but not a 2019 one).

When creating the Stepien Lists, I applied those two rules to RealGM’s amazing pick database to draw out timelines and scenarios for teams. Unfortunately, that level of analysis misses one key piece of flexibility left in between the two rules. 

Fortunately, the deadline gave us an example of how this flexibility can work. The Miami Heat wanted to acquire Goran Dragic from Phoenix and apparently the Suns were asking for two first-round picks in return. Unlike Cleveland in the Mozgov trade, Miami did not have anyone else’s selections to help fulfill that demand. Typically when a team faces that situation they would trade two upcoming firsts and that would be the end of it. Unfortunately, Miami traded a first rounder with protection to Cleveland for LeBron James back in 2010 that has not been conveyed.  Since that selection does not become unprotected until 2017, my Stepien Lists said the Heat could not convey a selection before 2019. That would put Miami in a bind because since 2021 was the Seven Year Rule backstop for this season, they would have very little flexibility.

The Miami front office then used the wiggle room between the Stepien Rule and the “Seven Year Rule” to gain a little more control over it all. They added the possibility of moving the pick sooner than 2019 if they conveyed the previously traded protected pick earlier than 2017. Since Miami retains the rights to the pick if that happens, with proper language the Heat could also put in protection for those additional years without violating either rule. Another tool the teams presumably used here is the term “first available draft” which means that the trade still has to fit the Stepien Rule but the pick (the first one, in this case) will go to the receiving team as soon as it would be allowable, provided any other terms are satisfied. The Heat and Suns negotiated for top-7 protection for both 2017 and 2018, depending on when the pick becomes available for trade. Miami still ran into a wall in 2019 because they had to give up a second first round pick after that, so the selection had to resolve one way or the other that year. I am guessing Phoenix would not have accepted it reverting to a second round pick or two, so the first became unprotected that year. The sides could have agreed to a similar process for the second pick but instead chose to make it a simple unprotected first-rounder in 2021, which satisfies both rules.

While the Miami/Phoenix trade illustrates one way to use this additional flexibility, teams also use a few other tools. My favorite is that when an unprotected pick could be unpalatable (likely for the trading team), the sides can agree for the first-rounder to become second round picks instead. This will come to fruition very soon in the case of the Sixers. In 2012, they traded a future first to Miami in exchange for the #27 overall pick (Arnett Moultrie) but did not want to give away something as valuable as a potentially unprotected choice for such a small asset. As such, the teams agreed that if the pick had not been conveyed by 2015, it would become two second round picks. That resolved the pick in a way that the Sixers could have conceptually traded their 2017 choice even without the benefit of the other firsts they have acquired. The Kings made a similar choice in a 2011 trade with Cleveland, creating an asset the Cavs ended up moving for Luol Deng last season- Sacramento’s pick has top ten protection until 2017 and then becomes a single second rounder that season if the first never gets conveyed.

Despite the fact that the Stepien Rule and Seven Year Rule continue to play major roles in how teams make trades, understanding this nuance allows for a clearer picture of the assets general managers have at their disposal and an increased appreciation for just how complicated their job can be.