How Hornets can make more moves

It was a fascinating trade from a salary-cap perspective. Last weekend the New Orleans Hornets dealt Jerryd Bayless, whom they acquired from the Portland Trail Blazers earlier this season, to the Toronto Raptors, along with the expiring contract of Peja Stojakovic. The Raptors sent Jarrett Jack, David Andersen and Marcus Banks to the Hornets in return. The trade was held up Friday over the amount of cash to be included, but was completed late Saturday night after the Hornets' team plane landed in Sacramento.

At first glance the trade appeared as though it shouldn't be legal. For one thing, the Hornets recently acquired Bayless from Portland. League rules dictate that players received in trade can't be "aggregated" for two months -- packaged with other players in order to acquire more expensive players. This rule exists to discourage teams from acquiring a player for the sole purpose of including him in another trade, where the player is needed to make that trade legal. Bayless was acquired on Oct. 23, and he's now being packaged with Stojakovic prior to the original trade's two-month anniversary.

Another issue was the salaries. Teams can acquire 25 percent (with a $100,000 fudge factor) more than the salaries they send away in a trade. The salaries of Jack, Andersen and Banks added up to $12.05 million, which means the Raptors could trade them for up to $15.16 million in salaries. But Stojakovic and Bayless are earning a total of $16.55 million this season, and Stojakovic has a trade bonus that would have pushed the total to $17.76 million. So how did Hornets GM Dell Demps and Raptors GM Bryan Colangelo pull this off?

The devil, as they say, is in the details. Some reports said the trade was accomplished by being split into multiple transactions, with Bayless traded solo in one of them. But this wasn't necessary -- league rules don't prevent players from being packaged together within two months (a common misconception), they merely prevent trades in which the salaries of the packaged players are added together to acquire a more expensive player. Since that didn't happen here, the Hornets were free to include both Stojakovic and Bayless in the same transaction.

Colangelo acquired Bayless using part of the trade exception he received in last summer's Chris Bosh deal. Remember, Bosh joined the Miami Heat by working out a sign-and-trade arrangement with the Raptors. The Raptors received draft picks from Miami in the deal, and because no salary came back to Toronto, the Raptors also pocketed a trade exception, good for one year, in the amount of $14.5 million.

So, Raptors fans, Bayless is your first return on Chris Bosh. Bayless consumes about $2.3 million of the Raptors' $14.5 million trade exception, leaving Colangelo with about $12.2 million to use in other deals.

Colangelo had to use the Bosh trade exception for Bayless because he needed the salaries of all three Raptors to acquire Stojakovic. This is another place where it got tricky. The three Hornets added up to $11.95 million. Tack on 25 percent and add in the $100,000 fudge factor, and you get $15.03 million. While Stojakovic's $14.46 million salary was safely within the margin, his trade bonus pushed his total to $15.47 million, so additional measures needed to be taken.

Fortunately, players are allowed to waive a portion of their trade bonus to make a trade legal. This is just what Stojakovic did -- he forfeited exactly $437,470 of his $1,215,953 bonus. He was not allowed to waive a dollar more or less.

As reported on ESPN.com Saturday, the trade had been held up over the amount of cash the Hornets would send to the Raptors in the deal. For the purpose of salary matching, cash and draft picks count as $0, so the cash (which can be up to $3 million) did not factor into the trade equation. Rather, it merely delayed the ultimate resolution.

For Demps and the Hornets, the trade also represented a windfall from a luxury-tax perspective. This season, teams will pay luxury tax for each dollar their payroll is above $70.307 million. Prior to the trade the Hornets' payroll was about $71 million -- they were slated to pay about $700,000 in tax, and also would have foregone their distribution from other teams' tax payments (about $3.2 million). This trade reduced their payroll to $66.4 million, or $3.9 million below the tax threshold. Their total windfall from this trade, including salary and tax considerations, will amount to about $7.7 million.

And Demps likely isn't finished. This deal generated a large trade exception for New Orleans, which Demps now has a year to use. There are multiple ways to configure this trade, with one possibility being to use the $6.2 million trade exception the Hornets received from the July 8 deal that sent Morris Peterson to the Oklahoma City Thunder. In this configuration, the Petersen trade exception would be used to accommodate Marcus Banks' $4.85 million salary. Demps would also use Bayless for Andersen, and Stojakovic for Jack. This would leave Demps with a new trade exception valued at the difference between the salaries of Stojakovic and Jack, or $9.656 million.

This deal also illustrated the asymmetric nature of NBA trades -- while this was really just one big five-player deal, each team did its own accounting, independent of the other team. In these cases, as long as each team structures the trade so that it is in compliance with league rules, there is no requirement that the accounting for each team is aligned. Thus we saw Banks, Jack and Andersen aggregated together for Stojakovic from the Raptors' viewpoint, while the three Raptors were brought over individually from the Hornets' viewpoint.

And as noted, the Hornets now have additional opportunities to improve the roster because of this trade -- and the Bosh trade before it, which was, of course, a key piece of the Miami SuperFriends' maneuver. Demps has another large trade exception in hand, and he can acquire an additional $3.9 million in salaries without straying back into luxury-tax territory. By taking advantage of that, he has a chance to further appease Chris Paul, his franchise point guard, after acquiring Jack, one of CP3's best friends.

Larry Coon is the author of the NBA Salary Cap FAQ. Follow Larry on Twitter.