Is It Realistic to Only Pay Tax for a Contender?

[spectre]

Jordan not eyeing free-agent spree (http://sports.espn.go.com/nba/news/story?id=5019056)


Jordan acknowledged he has "little wiggle room right now" with the salary cap. He indicated they have committed between $57-59 million in payroll for next season, and that doesn't include impending free agents Raymond Felton (http://sports.espn.go.com/nba/players/profile?playerId=2753) and Tyrus Thomas (http://sports.espn.go.com/nba/players/profile?playerId=3032).

Jordan said the league office has told teams the luxury tax threshold -- where teams will have to pay a dollar for dollar tax for going over -- could be as low as $61 million next season.

"If it's around $65 [million], we still have roughly $8 million to play with to stay underneath the luxury tax," Jordan said. "I don't see a need to go over the luxury tax unless we go deep [in the playoffs] and we're a player away or we're close. I would [then] entertain that idea."Atlanta Journal Constitution (http://www.ajc.com/sports/atlanta-hawks/hawks-vow-to-fight-523296.html)


The Hawks (http://g.ajc.com/r/Cx/)’ $66 million payroll ranked last among Eastern Conference teams in the playoffs. It's $15 million shy of Orlando and $8 million behind the lowest payroll among the other seven teams still playing.

“They’ve all gone out and they’ve spent money,” Woodson said. “Not that our owners haven’t. They’ve done it gradually and we’ve grown gradually as a basketball team for that. Do we go to the next step? I don’t know where we go."That could just as easily be us.

According to Hoopshype Salaries (http://hoopshype.com/salaries.htm) we are at 16th in player salaries this past season, and only 3 teams above us aren't paying the tax (assuming this is correct...which I'm not that sure of). The teams below us in payroll that did make the playoffs:

Milwaukee
Atlanta
OKC
Portland

Only Atlanta made it to the 2nd round. OKC and Portland are mostly running rookie deals and their status is going to change quickly.

Is staying under the tax realistic if we expect to get out of the 1st round, especially considering 3 of the 4 division winners had salaries north of 82 million? Can we continue to restrict ourselves against teams that spend 10-20 million over the LT?

We ran up against the defending EC Championships in the 1st round this year...a team who's paying 14 million more in salary than we are. Unless we get lucky and 1) get home court advantage away from Atlanta and play a weaker opponent or 2) play Atlanta in the 1st round...do we ever stand a chance with the LT restriction?

Take into consideration that we were extremely lucky healthwise this past season. That's not going to happen every year.

[Felton for Prez]

This clearly illustrates that player salaries in general are way out of hand. I don't begrudge anyone for getting paid what that market dictates, good for them. However, I really think there needs to be a 1/3rd cut (more?) in salaries to make the league more tenable.

[SWedd523]

This clearly illustrates that player salaries in general are way out of hand. I don't begrudge anyone for getting paid what that market dictates, good for them. However, I really think there needs to be a 1/3rd cut (more?) in salaries to make the league more tenable.

definitely. I understand wanting more money, but there comes a point where it just straps a franchise to have it tied up in that few players, especially with endorsement deals and all that. Guys like Nazr, Diop, Chandler, etc are making way too much money for what they bring to the table.

I guess it's all relative once you ge to that level of wealth though, $6mil isn't that much, but I think we (everybody) needs to be a little mote frugal with the excessive spending.

[spectre]

definitely. I understand wanting more money, but there comes a point where it just straps a franchise to have it tied up in that few players, especially with endorsement deals and all that. Guys like Nazr, Diop, Chandler, etc are making way too much money for what they bring to the table.

I guess it's all relative once you ge to that level of wealth though, $6mil isn't that much, but I think we (everybody) needs to be a little mote frugal with the excessive spending.

There's excessive spending and then there is stupid spending. You look at the teams who have a high salary and they don't have the albatross contracts for guys like Gana who doesn't contribute at all to the team.

From the first article:


It’s not only a money issue but also about getting good value for players. Matt Barnes, Ryan Anderson and Jason Williams play major roles for the Magic despite earning three of the lowest salaries on the team. The Hawks (http://g.ajc.com/r/Cx/) have received little production from players outside of their regular rotation.Again...same could be said for us. Our bench contribution had been lacking for most of the year tho we did improve it somewhat with the addition of Flip, TC getting healthy and later TT. I don't think the starting group is that out of line (in the near future I plan on comparing our 1st thru 5th options with other teams in the league) as there are few playoff teams that have someone on a rookie deal in their starting lineups other than the OKC & Portland teams.

I think we all agree that we need to be more smart with the money we hand out...but regardless, assuming the status quo stays (I don't foresee that big of an adjustment in the next CBA no matter what the positioning)...can we still compete for anything other than a 1st round out if we restrict ourselves to the LT limit?

[SWedd523]

If we built through the draft I could see us being contenders with low salary figures. However, with the way we construct our team through trades and older, established players I don't see us being highly competitive unless we pay more salary.

I would still argue that guys on the magic are overpaid (Lewis jumps to mind) but I can't really look anything up right now as I'm on my phone. Now I'm admittedly more conservative with my money, but I think guys like Ray deserve 5/6. Jack 6/7. Crash 8/9. Diaw 6/7. And Chander 6/7. Just to use the starters as an example. That's $36mil for our main 5 with another $30mil to give to the other lesser important people.

That would never happen, but it'd be my wish.

[spectre]

^ Good post...I pretty much agree with all of it.

Lewis is overpaid; I think the article was focused more on the supporting cast.

Tho those numbers Swedd put out are what they "should" be making, no doubt the owners for whatever reasons are the final say in paying those high contracts. They're also why small market teams like us are put in this situation. If everyone had to worry about staying solvent because the fans wouldn't come regardless (Bulls, for example), had a lucrative TV deal...or just an insanely rich owner like Cuban then we probably wouldn't be where we are today.

But we are.

I've long said that I personally wouldn't pay the LT for a team like we have...but I'm starting to think that we have no choice unless we get extremely lucky...and we never get extremely lucky.

[teej]

Spectre, I have to disagree. I think the CBA in 2011 will be dramtically different than the current one. Owners are losing money everywhere but Cleveland, LAL, and maybe 2 or 3 other locations. While the top-level salaries will probably stay the same (in the $14-25 mil category), what the owners want eliminated is the vast overpaying for mid level talent, i.e. Chandler, Diop, Mohammed, Diaw, and possibly Felton/TT. One thing they've looked at is a hard cap, so there's no need for an MLE, or a luxury tax. Thus, MJ can spend just as much as Cuban and Buss, just like the NFL. Make sense?

[dav7z]

^ Good post...I pretty much agree with all of it.

Lewis is overpaid; I think the article was focused more on the supporting cast.

Tho those numbers Swedd put out are what they "should" be making, no doubt the owners for whatever reasons are the final say in paying those high contracts. They're also why small market teams like us are put in this situation. If everyone had to worry about staying solvent because the fans wouldn't come regardless (Bulls, for example), had a lucrative TV deal...or just an insanely rich owner like Cuban then we probably wouldn't be where we are today.

But we are.

I've long said that I personally wouldn't pay the LT for a team like we have...but I'm starting to think that we have no choice unless we get extremely lucky...and we never get extremely lucky.

I think our starters compared to the other 30 teams are decent contracts except Chandler.
If we resigned Felton long term around 6 not to exceed 8 during the contract . Thats cheep for a starting point .
Crash making 9 milion is a steel. How many all stars are in his tax bracket.
Even DIAW at nine milion for a solid starter is not a bad contract.
Jax his contract money wize is even quite fair at around 9 milion as long as he produces and starts.

Chandler at 13 milion takes to big of a bite out of our cap for his production.


Subs contracts being paid as much as srarters is whats killing our cap space.

[spectre]

Spectre, I have to disagree. I think the CBA in 2011 will be dramtically different than the current one. Owners are losing money everywhere but Cleveland, LAL, and maybe 2 or 3 other locations. While the top-level salaries will probably stay the same (in the $14-25 mil category), what the owners want eliminated is the vast overpaying for mid level talent, i.e. Chandler, Diop, Mohammed, Diaw, and possibly Felton/TT. One thing they've looked at is a hard cap, so there's no need for an MLE, or a luxury tax. Thus, MJ can spend just as much as Cuban and Buss, just like the NFL. Make sense?

If there wasn't a players' association that could indeed come about, but (IMO) at the end of the day there will be no hard cap...players have already said that was a nonstarter...nor will they eliminate the MLE, which in my mind is one of the worst avenues for overpaying middling talent. Without the midlevel the players would have a very difficult time as there would be no one other than their existing team to bid for their services. If trades were the only way to move then they'd lose all sorts of power...and that ain't happening.

What I think will come about from the new CBA will be losing a year on the lengths of contracts (5 years going to 4, 6 for a team's own player down to 5). They'll also readjust the split guaranteed between players and teams (I think players get around 54%? Expect that to drop to an even split) which I think directly reduces max contract amounts. Play with the rules for MLE's (now I think they're 3 years minimum...reduce that to at least 2 years).

That's about it. Anything else gets pushed too hard then we'll probably have a lockout (which from what I'm reading neither side really wants to do).

Unions...gotta love 'em.

[teej]

Those are good changes, but far too minor to make the owners any type of money. As much as Cuban won't like it, I think that the NFL's new deal will shape how the NBAPA acts in negotiations. And, as much as I'd hate it, a lockout would be a good thing, even if for only a week.

[spectre]

Those are good changes, but far too minor to make the owners any type of money. As much as Cuban won't like it, I think that the NFL's new deal will shape how the NBAPA acts in negotiations. And, as much as I'd hate it, a lockout would be a good thing, even if for only a week.

I'm unfamiliar with what the NFL has done (was it that drastic?)...but for the sake of this discussion assume that there won't be any major changes in the upcoming CBA. If there was a drastic revision like a hard cap then this would indeed be moot.

Do you think we can compete keeping a hard line at the LT?

[teej]

I'm unfamiliar with what the NFL has done (was it that drastic?)...but for the sake of this discussion assume that there won't be any major changes in the upcoming CBA. If there was a drastic revision like a hard cap then this would indeed be moot.

Do you think we can compete keeping a hard line at the LT?

A) NFL is working on one right now, they have a lockout just before the NBA if it comes to that. This season the NFL has an uncapped year and player salaries are plummeting. The NBA players are for sure taking notice, and really, the NFL's system has worked outside of the actual salary numbers. Not so much in the NBA.

B) IF, and a big IF, the current CBA is the basis for the next one, then yes, we can compete, but not as a contender. But, if it's a team on the rise (I.E. OKC or Milwaukee) then going into the LT would be justified under MJ's logic. Maybe I'm just less concerned than you guys, but I think after the lockout/agreement then we'll have a much better idea of how MJ's going to work. And honestly, if he thinks it's best to prepare for that by letting Ray and TT go, I'm all for it.

Just remember, we're talking dollar for dollar tax payments and losing about $5 mil that non-tax teams get. MJ may not have that kind of money.

[spectre]

B) IF, and a big IF, the current CBA is the basis for the next one, then yes, we can compete, but not as a contender. But, if it's a team on the rise (I.E. OKC or Milwaukee) then going into the LT would be justified under MJ's logic. Maybe I'm just less concerned than you guys, but I think after the lockout/agreement then we'll have a much better idea of how MJ's going to work. And honestly, if he thinks it's best to prepare for that by letting Ray and TT go, I'm all for it.

Just remember, we're talking dollar for dollar tax payments and losing about $5 mil that non-tax teams get. MJ may not have that kind of money.

First off...interesting that you consider Milwaukee an up and comer. I read their boards a lot, and until they traded for Salmons they all pretty much figured they were screwed until forever.

I definitely think they look a lot better now than they did to begin the season and they'll look even better if they can retain Salmons (no given).

I totally understand the cost of going over the LT...but from what that OP shows no teams that didn't pay the LT got to the 2nd round except Atlanta...and right now they're getting their asses handed to them.

IF the CBA stayed basically the same MJ would have to decide if he's going to build a contender or else stay on the bubble forever barring something falling into his lap. Using the LT as a hard cap doesn't look like it's going to get him the former.

His standard of going over IF it looks like we can contend to get that extra guy doesn't seem to be legitimate as none of the other teams going by the same rules are there right now.

[teej]

First off...interesting that you consider Milwaukee an up and comer. I read their boards a lot, and until they traded for Salmons they all pretty much figured they were screwed until forever.

I definitely think they look a lot better now than they did to begin the season and they'll look even better if they can retain Salmons (no given).

I totally understand the cost of going over the LT...but from what that OP shows no teams that didn't pay the LT got to the 2nd round except Atlanta...and right now they're getting their asses handed to them.

IF the CBA stayed basically the same MJ would have to decide if he's going to build a contender or else stay on the bubble forever barring something falling into his lap. Using the LT as a hard cap doesn't look like it's going to get him the former.

His standard of going over IF it looks like we can contend to get that extra guy doesn't seem to be legitimate as none of the other teams going by the same rules are there right now.

I'm pretty high on Jennings, and that means (in my eyes) they have a 1st tier big and a future 1st tier PG. That's enough to be successful (NOLA with CP and West), plus Ilyasova has grown a lot and Mbah a Moute is very talented. They need a better swingman and then they're set. I'm sure they could get one for Redd's EC.

I think you're putting a bit too much into MJ's literal wording (and I can't blame you, he's not a fountain of information! :rolleyes:), and not enough into the meaning. What I got from that was if he thinks that the team is capable of becoming a champ, then he'd go into the LC. It doesn't have to come with getting to the second round necessarily, but with being competitive.

Also, our two main guys (ATM) are paid combined the max salary, and are locked in at that rate for 3 more years, or 4? IDR. Either way, if we could manage the roster better (and we're getting there) to get rid of the Diop's and Diaw's, then it's not far fetched.

[mj4life]

I'm pretty high on Jennings, and that means (in my eyes) they have a 1st tier big and a future 1st tier PG. That's enough to be successful (NOLA with CP and West), plus Ilyasova has grown a lot and Mbah a Moute is very talented. They need a better swingman and then they're set. I'm sure they could get one for Redd's EC.

I think you're putting a bit too much into MJ's literal wording (and I can't blame you, he's not a fountain of information! :rolleyes:), and not enough into the meaning. What I got from that was if he thinks that the team is capable of becoming a champ, then he'd go into the LC. It doesn't have to come with getting to the second round necessarily, but with being competitive.

Also, our two main guys (ATM) are paid combined the max salary, and are locked in at that rate for 3 more years, or 4? IDR. Either way, if we could manage the roster better (and we're getting there) to get rid of the Diop's and Diaw's, then it's not far fetched.
what MJ has said over and over is that he is against paying the lux tax unless the team is a legit contender(orlando is, but their owner has gone on record that he can't afford to continue to pay unless the magic win a championship within the next couple of years)we don't want to end up like the knicks or the jazz and nuggets. i think mj would pay the tax if he nedded to but i also think changes are coming via the next cba

[spectre]

No Tax, No Title? Bill Ingram - Hoopsworld (http://www.hoopsworld.com/Story.asp?story_id=16212)


In many cases, the reason teams are one or two pieces away from competing with the Lakers or Magic is that they simply aren't willing to pay the luxury tax. The Lakers gave Kobe Bryant the help he demanded a couple of years ago, acquiring Pau Gasol and, more recently, adding Ron Artest to the mix. The reason they were able to make those moves was because winning a championship is the goal, and damn the cost. The Lakers will pay roughly $20 million in luxury tax this summer, the most of any NBA team, and if they win another championship they'll happily spend the money again next year. It costs a lot of money to win a championship.

~snip~

The ultimate conclusion here is that the cost of making it to the playoffs and then being in the championship discussion is in the millions of luxury tax dollars - that's dollars spent over and above the $69.9 million luxury tax threshold. In talking to executives across the NBA, one point of contention is that many markets can't or won't support that kind of spending. It's telling that of the 16 teams that made the playoffs this season only two weren't tax payers - Portland and Milwaukee - and they were both out of the mix early.More at the link.

Bill draws the conclusion that the above isn't working (hard to argue against that) and it's why we're going to see major changes in the CBA next summer.