Super Luxury Tax, Cap and Expiring Contracts
Old 12-28-2012, 01:35 PM   #1 (permalink)
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Default Super Luxury Tax, Cap and Expiring Contracts

Expiring contracts used to have some value because it could allow a team a means of exceeding the cap. With the super luxury tax coming in next year, big salary teams will be forced to cut salaries to get uunder the cap. Here's a quick guess on the cap and the tax level.

Will there be a fire sale on 20 million dollar players that are too expensive with super luxury tax coming in.... at the upcoming trade deadline. I would have to assume there will be more sellers than buyers.

This is interesting...and can you possibly even take a chance that the cap goes that high if you're a GM?

2013-2014 NBA Salary Cap/Luxury Tax
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Old 12-30-2012, 05:57 PM   #2 (permalink)
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From the link (and it's consistent with the original source from NBA.com, since the salary cap was the same for 2010-11 as 2011-2012 - in other words, a 20% increase from 2010 is still a 20% increase from last year).

Quote:
Two weeks ago David Stern mentioned that he expects NBA revenue to increase to $5b for the year that ends on 6/30/13.
This would be approximately a 20% increase in revenue over the year that ended on 6/30/12.
If this turns out to be true, there are significant ramifications that this would have for the league, their franchises and the Salary Cap/Luxury Tax thresholds.

The Salary Cap would increase from $58.04m to $69.65m and the Luxury Tax threshold would increase from $70.3m to $84.4m.
Uh, this has so many potentially interesting/important consequences. I would guess that Stern has good reason for making his estimation, because I doubt he'd risk seriously misleading the league's owners...etc..
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Old 12-30-2012, 06:02 PM   #3 (permalink)
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Quote:
Originally Posted by JoeyJoJo Shabbadu View Post
Will there be a fire sale on 20 million dollar players that are too expensive with super luxury tax coming in.... at the upcoming trade deadline. I would have to assume there will be more sellers than buyers.

This is interesting...and can you possibly even take a chance that the cap goes that high if you're a GM?
If there is genuine belief that the cap will go that high, it might actually become a buyers market, if they expensive players are not total shit.

It's definitely an interesting question. If the cap goes that high, the lower teams still need to spend 90% of the cap. That could lead to teams overspending on shit free agents just to meet the salary quota. Instead of doing that, some teams might be inclined to take on some extra salary at the trade deadline, if it's a proven player, rather than over pay for a mediocre FA that they're forced to sign.
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Old 12-30-2012, 06:44 PM   #4 (permalink)
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If this revenue increase is true, a bunch of other guys are going to decline to pick-up the options on thier contracts. Players like Mayo, J.R Smith, Carl Landry will get paaaaaaaaid by playing the market instead.
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Old 12-30-2012, 07:08 PM   #5 (permalink)
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Originally Posted by Bill Haverchuck View Post
If there is genuine belief that the cap will go that high, it might actually become a buyers market, if they expensive players are not total shit.

It's definitely an interesting question. If the cap goes that high, the lower teams still need to spend 90% of the cap. That could lead to teams overspending on shit free agents just to meet the salary quota. Instead of doing that, some teams might be inclined to take on some extra salary at the trade deadline, if it's a proven player, rather than over pay for a mediocre FA that they're forced to sign.
I completely did not see that part. That does make it a bit of a buyrers market. Makes expirings useless though still I beleive because teams over the cap get punished so back they won't be able to exceed it by much.
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Old 12-30-2012, 07:09 PM   #6 (permalink)
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Quote:
Originally Posted by Bill Haverchuck View Post
If this revenue increase is true, a bunch of other guys are going to decline to pick-up the options on thier contracts. Players like Mayo, J.R Smith, Carl Landry will get paaaaaaaaid by playing the market instead.
Kyle Lowry?
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Old 12-30-2012, 07:14 PM   #7 (permalink)
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Kyle Lowry?
The team owns the option. It's not a player option. The Raps have him for next year, at least.
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Old 12-30-2012, 07:21 PM   #8 (permalink)
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The team owns the option. It's not a player option. The Raps have him for next year, at least.
The way everyone was talking seemed opposite. Thx.
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Old 12-30-2012, 10:20 PM   #9 (permalink)
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Originally Posted by JoeyJoJo Shabbadu View Post
The way everyone was talking seemed opposite. Thx.
The primary concern with Lowry is what it will cost to extend him if he lights it up next season after Jose is gone. It's always possible Lowry could try to walk in July 2014, so the Raps might have to overpay a little to get him to stay.

The good news is, Steph Curry, Ty Lawson and Jrue Holiday signed their new deals before Stern made this revenue announcement, so the cost might be lower than it otherwise could be. Had those PGs waited until this summer, they might have got huge offer sheets and set the market higher. When healthy, Lowry is probably somewhere near those guys. So if those guys had signed bigger deals, then keeping Lowry might have cost close to the max in 2014. I don't think we're going to have to offer him something that ridiculous.
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Old 12-30-2012, 10:39 PM   #10 (permalink)
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On a Raptor related note...

If the cap goes up that much, Derozan's contract looks waaaaaaay better than when he first signed it. Derozan's contract will be a good deal if he stays this productive. This will be something Colangelo did right. His gamble will have paid off, because the way Derozan is playing, he would very likely get an offer sheet over $10 mill on the open market. It might not have been a four year deal like the Raps, but a team almost certainly would have given him a 2 or 3 year deal worth that much. And the 4th year does not hurt us, so long as he is productive, because if the cap goes up or at least stays at the projected 2013/2014 level, $9.5 million becomes good value for what DD provides.
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Old 12-30-2012, 10:41 PM   #11 (permalink)
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Stern is doing whatever it takes to help the Lakers out.
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Old 12-30-2012, 10:44 PM   #12 (permalink)
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Stern is doing whatever it takes to help the Lakers out.
Well, the timing of such a substantial revenue increase is kind of convenient.
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Old 12-30-2012, 10:45 PM   #13 (permalink)
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I was just looking at some NBA contracts. It makes me sick how much some of these players get paid. If I was an NBA owner, I would go on strike.
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Old 12-30-2012, 11:27 PM   #14 (permalink)
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Quote:
Originally Posted by JoeyJoJo Shabbadu View Post
I completely did not see that part. That does make it a bit of a buyrers market. Makes expirings useless though still I beleive because teams over the cap get punished so back they won't be able to exceed it by much.
I'm going to pull a Bill and get nit picky, a buyers market - or soft market - means there are more sellers (players) than buyers (teams) which will drive the price down for the players and not up. I can see players holding onto their options so not to flood the market and drive the market price down. Even if the cap goes to 69.65 (really thats only an 11 mil increase), half the current teams are over that already this year and that number only slightly decreases next year (not even accounting for cap holds). This increase will help the teams offset current payroll to avoid those big tax hits till all the CBA is fully implemented (meaning when all the grand fathered contracts are done).

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Old 12-30-2012, 11:46 PM   #15 (permalink)
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Quote:
Originally Posted by DocHoliday99 View Post
I'm going to pull a Bill and get nit picky, a buyers market - or soft market - means there are more sellers (players) than buyers (teams) which will drive the price down for the players and not up. I can see players holding onto their options so not to flood the market and drive the market price down. Even if the cap goes to 69.65 (really thats only an 8 mil increase) over half the current teams are over that already this year and that number only slightly decreases next year (not even accounting for cap holds). This increase will help the teams offset current payroll to avoid till all the CBA is fully implemented.

It's actually an $11 mill increase over this year's cap. The cap is 58ish right now.

Also, some of the teams that will be under the cap in July, are going to be significantly under the cap. Some will even be significantly under the 90% minimum threshold.

You might be right that a few playesr elect to stick with current contracts, like, say Trevor Ariza or Kirilenko, who already make decent coin at 7 and 10 mill respectively. But a number of guys like Mayo, J.R. Smith, and Carl Landry will opt out and get paid. If the revenue projection is accurate, it frees up significant cap space league wide.
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Old 12-30-2012, 11:51 PM   #16 (permalink)
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If this happens, the Rockets are going to have a fuckload of money to spend and it will be interesting to see who they go after this off-season. They would probably target a PF to complement their starting lineup.
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Old 12-31-2012, 12:56 AM   #17 (permalink)
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maybe houston ends up getting gasol after all—summertime? the lakers benefit a lot of different ways from a massive exception.
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Old 12-31-2012, 01:23 AM   #18 (permalink)
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Quote:
Originally Posted by Toby View Post
I was just looking at some NBA contracts. It makes me sick how much some of these players get paid. If I was an NBA owner, I would go on strike.
players like Joe Johnson, Elton Brand and Lewis are overpaid but LeBron, CP3 , Durant are underpaid. They bring in a lot more per year than they get paid.
there was a report that showed LeBron is worth $50 mil+ per year to the Heat
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Old 12-31-2012, 02:45 AM   #19 (permalink)
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who fucking cares

players are fucking animals to me. they get paid to perform. fuck um.

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Old 12-31-2012, 10:37 AM   #20 (permalink)
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Quote:
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players like Joe Johnson, Elton Brand and Lewis are overpaid but LeBron, CP3 , Durant are underpaid. They bring in a lot more per year than they get paid.
there was a report that showed LeBron is worth $50 mil+ per year to the Heat
John Salmons gets 8 million!
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