During the second round of the NBA Draft on Thursday night, the Chicago Bulls dealt No. 38 overall pick Braden Smith to the Indiana Pacers for Kam Jones, future pick swaps and so-called cash considerations.
It was at least the 15th time since 2000 the Bulls have made a deal involving cash considerations. As a result, Chicago fans on social media joked the move was a franchise tradition. “Welcome home, cash considerations!” one person wrote on X.
The Bulls were far from the only team moving money around at the draft. ESPN reported on 10 trades at the two-day event that involved cash considerations. While sending funds to other teams seems like a simple enough concept, the NBA has a specific set of rules on how exactly cash can be used in transactions.
Here’s how it works.
What actually are “cash considerations”?
Simply put, it’s when one team sends cash to another in a trade.
How much are they allowed to send?
During the 2025-26 season, teams were allowed to dole out as much as $7.96 million, and they’re allowed to receive an equal amount in return. That money doesn’t offset. So once a team hits the cap, it cannot send any more money no matter how much it’s gotten back.
How is the number determined?
The pool of cash allowed for transactions is a function of the salary cap. That will reportedly rise to nearly $8.5 million next season, according to Sports Business Classroom. The NBA’s cap will be finalized on July 1, which is also when free agency officially gets started.
Do all teams follow the same rules?
Yes, unless they’re in the punitive second apron, which is a restrictive spending threshold set out by the league’s collective bargaining agreement. Barring cash transactions is one penalty teams face if they finish a season with a payroll a certain amount of money above the luxury tax mark.
Do cash considerations count against the salary cap?
They don’t, and that gives teams another asset at their disposal when acquiring or unloading talent.
Are teams allowed to trade cash strictly for draft picks?
As we saw 10 times in this year’s draft, the answer is yes. But in trades of draft picks only, cash can only be used to acquire second-round picks. First-rounders are excluded.
How big do these deals tend to be?
The values aren’t typically disclosed. So theoretically, cash considerations can run anywhere between $1 and $7.96 million, depending on how much of that pool a team has available. According to data from Sports Business Classroom, some cash consideration offerings in transactions alongside players ran well into the multimillion-dollar range.
When is the cash paid out?
The payout schedule is determined by the participating teams in the trade.
Sign up for Sportico's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
