If a player is traded after the CBA mandated deadline of June 1st, the team gets the benefit of being able to spread the Salary Cap hit – or dead money – over two years. When a player is released after June 1, the team is again relieved of paying that player’s base salary for the year in which he is released (and all future years) and the only amount that counts against the team’s Cap in that year is the player’s bonus proration for that year. The remaining unaccounted-for bonus pro-rations accelerate against the Cap in the following year.
So, using the above example, instead of having to eat $6M in dead money in the 4th year of the contract, the team would only have to carry $3M in dead money against the Cap for that year (which is that year’s bonus proration), but would have to account for the other $3M in dead money against the Salary Cap in the following year.
In the simplest terms, when a player is released after June 1, the team’s Cap savings for that year is the player’s Base Salary (P5), while the player’s bonus proration for that year is all that remains to count against the Salary Cap. The balance of the player’s bonus pro-rations will count in the following year.
Post-June 1 retirements and trades are treated the same way.