Mdog1
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I think he means use it to take on someone's contract that expires at the end of the year. When I first thought about it, it made no sense because you'd have to convince someone to let go of a potentially valuable trade chip for nothing. But... would doing a deal like that provide the other team instant cap space? Almost like an advance on the expiring contract to get in on this year's free agents? I'm not sure how that all would work, but maybe.
Edit: For instance, let's say a team like Boston really wants to get in on the Marc Gasol sweepstakes (or David West, or whoever else). But they currently owe Ray Allen $10 Million for this coming year. They also owe Jermaine O'Neal over $6 Million. We offer to absorb one of those guys with the TPE, and get their first rounder out of it. And they open up some room to try to bring in a free agent. Again though, I don't know how this CBA situation will affect all of that.
Under the current CBA it will work just like you said in your edit, and under the future CBA who cares. It literally doesn't effect the Cavs if we trade it in the next few days.