(click here for the Instant Gratification Version) Determining a team’s luxury tax number is not quite as simple as looking at their payroll and comparing it to the luxury tax threshold. This is about 98% of the job, of course, but there are a couple of other tweaks. For salary minutia fans like myself, these tweaks are important. The following list of adjustments is quoted from Larry Coon’s CBA FAQ, a page from which my entire career is sourced. 1) Cap holds and exceptions are ignored. 2) Any “unlikely bonuses” that were actually earned are added to the team salary. 3) Any “likely bonuses” that were not earned are subtracted from the team salary. 4) Any trade bonuses for players received in trade after the last regular season game are added to the team salary. 5) Any amounts from settlements of grievances are added to the team salary. 6) Players who signed as free agents (i.e., not draft picks) and make less than the two-year minimum salary are taxed at the minimum salary for a two-year veteran and not their actual salary. For minimum salary players whose salary is partially paid by the league only the amount paid by the team (the two-year minimum salary) is taxed. The salaries of players waived via the Amnesty provision are exempt from the luxury tax. A team’s luxury tax number is taken from the last day of the regular season, then adjusted for the above criteria. We of course aren’t at the last day of the regular season yet, hence the title of this post, so points 2, 3 and 4 can be ignored for now. (Bonuses are adjusted with hindsight. For now, we can only work with what we know.) Point number 1 means removing the cap holds and unused exceptions that […]
All salary information is taken from this website’s own salary pages. All figures taken from the day of publication – if subsequent trades/signings are made, then adjust accordingly. NOTE: All cap space amounts are calculated to an estimated salary cap of $58.5 million. This inexact figure is the most recent (and thus accurate) projection released yet, and will suffice for now. When the actual amount is calculated/announced, the sums below will be altered accordingly. It is vital – VITAL – that you understand what a “cap hold” is before you read this. An explanation can be found here. Atlanta Hawks Committed salary for 2013/14: $22,497,415 (view full forecast) Projected cap space: At most, $35,504,580, but not really. If Atlanta renounce (or lose) Josh Smith, and renounce their remaining free agents (Kyle Korver, Devin Harris, Zaza Pachulia, Johan Petro, Ivan Johnson, Jeff Teague, Dahntay Jones, Hilton Armstrong, Erick Dampier, Etan Thomas, Randolph Morris and Anthony Tolliver), waive DeShawn Stevenson ($2,240,450, fully unguaranteed with no guarantee date), Shelvin Mack ($884,293, fully unguaranteed with no guarantee date) and Mike Scott ($788,872, fully unguaranteed until August 15th, thereafter $100,000 guaranteed) and sell or renounce their first-round draft picks (#17 and #18, cap holds of $1,348,200 and $1,280,800), they will have a cap number of $22,995,420 (the committed salary plus nine minimum salary roster charges of $490,180 for having less than twelve things on the cap). (If you want to get really absurd, they could even amnesty Al Horford. Hypotheticals are fun.) This is, however, a maximum amount. And it’s not a realistic one. Smith’s cap hold will be equal to the maximum amount for a nine year veteran, and, while this amount will not be known until the new salary cap figure is determined, a slight increase in the cap will mean a slight […]
The only beardless picture of Rashard Lewis I could find. It’s a part of him now. “Creative financing.” A fun term, one that’s actually employed by financiers and accountants, yet one brought into the world of the NBA when it was used, once, in a pre-emptive justification for one of the least creatively financed transactions of a generation. Nevertheless, even if the man who gave reverence to the phrase isn’t the role model for its usage, creative financing does exist in the NBA. Or at least, it did.In amongst the lockout, the protracted negotiations, and the almost complete loss of a season/confidence in the NBA’s product, a new Collective Bargaining Agreement was drawn up that sought to curb spending, introduce more payroll parity, and get the league back into the black. For those of us who enjoy looking at, and looking for, means to creatively manipulate, it was a confusing time. Of course, some teams acted like nothing had happened. Detroit gave $25.5 million to Rodney Stuckey to come back, gave $18 million to Jonas Jerebko to come back, gave $28 million to Tayshaun Prince to come back, and gave $14.5 million to Rip Hamilton to go away, committed as they were to retaining the core of a team that’s gone 57-107 over the last two seasons. Meanwhile, Philadelphia spent only what it cost to re-sign Thaddeus Young and replace Darius Songaila with Nikola Vucevic; hamstrung as they were by incumbent contracts, the team had too little wiggle room to do very much, something which will likely continue to be the case for the final 18 months of the Elton Brand era. Most others, however, recognised the changing environment, and were willing (or able) to adapt accordingly. Perhaps the most prominent example of this is the defending champion, Dallas Mavericks. […]
Last year, I wrote a couple of posts under the heading of “Creative Financing in the NBA.” Inspired by seeing a series of quirky salary techniques that I had not previously seen in my three long and sexless years of compiling NBA salary information, I was inspired to steal Magic GM Otis Smith’s favoured phrase without permission, and use it to describe some of the financial anomalies that the offseason transactions had puked over our spreadsheets. The posts were reasonably successful, drawing in both the 25th and 26th regular viewers to the site; more than anything, however, they were a pleasure to write. Therefore, there follows another post for salary anomalies and trivia from the 2010 NBA offseason, a breakdown of all quirky payroll-related idiosyncrasies and manipulation that took place in front of our very eyes, even if we didn’t really notice it at the time. Note: this will not interest you, unless you are really big on pedantry. (Mind you, that could be said about this entire site.) – One of the first signings announced in this free agency period was that of Amir Johnson, who last year backed up Chris Bosh in Toronto. He played well, being possibly Toronto’s best defender and averaging 6/5 in 17.7 minutes per game with a PER of 16.7. The Raptors re-signed Johnson to a deal worth $30 million in base compensation (not $34 million as was widely reported), with incentives in the deal to potentially boost its value that are currently listed as “unlikely.” Amir’s contract before incentives will pay him $5,000,000 next year, rising by $500,000 annually to a total of $7 million in the fifth and final year. However, that $7 million salary in the final year is only $5 million guaranteed; if Toronto (or whoever owns him at that […]
Lots of people and lots of places are claiming knowledge of the cap space of various NBA team in anticipation of this summer’s free agency bonanza. Most, if not all, have done so misleadingly inaccurately. Without wanting to sound too douchebaggy (sorry), let’s try to get this right. 100% accuracy is not guaranteed, but 99.7% accuracy is. All salary information is taken from this website’s own salary pages. NOTE: All cap space amounts are calculated to an estimated salary cap of $56.1 million. This inexact figure is the most recent (and thus accurate) projection released yet, and will have to suffice for now. When the actual amount is calculated/announced, the sums below will be altered accordingly. Atlanta Hawks Committed salary for 2010/11: $47,630,214 (view full forecast) Projected cap space: None If Atlanta renounce (or lose) Joe Johnson, renounce Josh Childress, renounce their four remaining free agents (Joe Smith, Mario West, Jason Collins and Randolph Morris), and sell or renounce their first-round draft pick (#24, cap hold of $963,600), they will have a cap number of $49,524,640 (the committed salary plus four minimum salary roster charges of $473,604 for having less than 12 things on the cap). Barring trades, that’s as low as they can get. And yet it’s not enough for cap room; if you add on the value of the Bi-Annual Exception ($2.08 million) and the Mid-Level Exception (not yet known exactly, but will be about $5.7 million), the Hawks are over the cap. Boston Celtics Committed salary for 2010/11: $64,423,396 (view full forecast) Projected cap space: None If Paul Pierce opts out, and if he and Ray Allen are both not re-signed, it’s possible for the Celtics to have cap room. But it is too farfetched and nonsensical. Charlotte & Bob Katz Committed salary for 2010/11: $59,789,925 (view […]
The NBA’s luxury tax first came into existence in 2001, the year in which the league’s new escrow system debuted. The escrow system, in layman’s terms, is a system that withholds a certain amount of player’s salaries and puts it into a separate account until the end of the following season’s moratorium. At that point, when the league’s annual audit is done (that’s what the moratorium is for; calculating the numbers), then if the league-wide player salaries exceed a certain percentage of the league’s overall revenue, that account is divvied up amongst the owners and the players never see it. Similarly, if the league-wide salaries do not exceed that percentage, the players get it back. Essentially, it’s a failsafe measure to prevent players from getting paid too much. Luxury tax is an extension of the escrow system, designed to put more money back into the owner’s pockets if they feel the players are getting too much of it. If that sounds like something that might excite you, a longer description with all the relevant numbers and stuff was written by the seminal Larry Coon, and can be found here: http://www.cbafaq.com/salarycap.htm#Q18 As you might presently yourself fully be aware of, the luxury tax is an owner-friendly system also designed to prevent rich teams from simply outspending the rest of the competition. It is calculated by using a projection of the following year’s Basketball Related Income (roughly 61% of it; a more detailed description of the calculation can be found here), and the idea behind it is simple – you can have a payroll of as much as you like, but if you cross that tax threshold, it starts costing you more. It’s designed to be a deterrent, and to emphasise parity amongst the league’s payrolls, thus tying in nicely with David […]
Simple question: Did the tough economic climate affect NBA team’s spending plans as much as MSM scaremongers would have you believe? Not-so-simple answer: Kind of. This summer saw a team that could have had nearly eight figures of cap room opt not to use any of it. The Oklahoma City Thunder did pretty much nothing with their offseason once draft day was completed, and having won a total of 23 games last year, it’s justifiable to ask why that was. There follows some exploratory maths, which get a bit dull and confusing. If the Thunder had completed their buyout of Earl Watson (saving them $3.125 million; for argument’s sake, let’s assume that it could have been done earlier than July 17th), not signed James Harden, B.J. Mullens and Serge Ibaka until their cap space had been used, renounced all these guys that they don’t want, not bothered to trade for Etan Thomas, and kept Chucky Atkins and waived him, they would have had the following payroll: Nick Collison – $6,250,000 Nenad Krstic – $5,160,832 Kevin Durant – $4,796,880 Russell Westbrook – $3,755,640 Jeff Green – $3,516,960 Earl Watson (waived) – $3,475,000 Damien Wilkins – $3,300,000 Thabo Sefolosha – $2,759,628 D.J. White – $1,036,440 Shaun Livingston – $959,111 Kyle Weaver – $870,968 Chucky Atkins (waived) – $760,000 Total = $36,641,459 for ten players. To that total, add the cap holds of $3,336,800 for Harden and $933,500 for both Mullens and Ibaka, take away all the cap holds linked to above (which at the start of the offseason also included cap holds for unwanted players such as Desmond Mason and Mickael Gelabale) and the Thunder would have had themselves a total team salary of $41,845,259. Against a salary cap of $57,700,000, that would have meant cap room of $15,854,741. And that’s pretty […]
Here’s a longer list of things that were not included in the original Creative Financing post, either because I forgot to include them, or (in one instance) because the sweet prince who called our hotline with the information had not yet come forward. Remember; all calls are anonymous and you could receive a cash reward for information. (Wait, no you couldn’t. That’s the slogan they use on Crimewatch. Ignore that.) – As a part of the new scheme of turning this website’s salary information from a static exhibit into a working reconstruction of life in First World War France, there now exists a page that lists all remaining salary cap exceptions for every NBA team. Of note on this list is the curious case of Channing Frye, the former Blazers and Knicks forward whose transformation from the next Dirk Nowitzki to the next Malik Allen is almost complete. The Suns signed Frye last month to a two-year, $4,139,200 contract; not coincidentally, that is the same amount as the full value of the Bi-Annual Exception. However, the Suns didn’t actually use their Bi-Annual Exception to sign him. Knowing that they wouldn’t be using the full MLE to sign somebody due to their payroll concerns, the Suns cleverly (and creatively) used an equivalent chunk of their Mid-Level Exception instead. As the name would suggest, you get to use the Bi-Annual Exception a maximum of once every two years, so if the Suns used it this year, they wouldn’t get it next year. But if they roll it over, they do. It’s pretty shrewd, when you think about it. (Teams that should have done this but didn’t include Washington – who used their BAE on Fabricio Oberto, and who won’t use their MLE – and Chicago – who used their BAE on […]
If you Google the term “creative financing otis smith”, you’ll find quite a few hits. It’s long been a favoured phrase for Orlando Magic general manager Otis Smith, and his most famous usage of the phrase came in the run-up to the 2007 offseason. Smith used the term “creative financing” to describe how the Magic were going to handle having maximum cap room, juggling signing other team’s free agents with retaining Darko Milicic. It was a fairly generic term that said something without really saying anything. And it only gained its resonance after Smith used all his money to give Rashard Lewis a massive, massive contract You’ll also, slightly depressingly, find this website fourth in those search results. There’s a reason for that. “Creative financing” is something that I’ve harped on about for a while. The financial side of the NBA gives me a jolly; watching and learning how the NBA teams manage (or mismanage) their salary cap space, the luxury tax threshold and all their exceptions gets me going in ways that it really shouldn’t. I don’t know why it’s fun, I only know that it is. I think you agree. Therefore, there follows a list of some of the better examples of creative financing in the NBA today, some of the ways in which executives and cap experts have manipulated the system, staved off the shackles of oppression, and beaten the terrorists. – The Bulls set a precedent by signing four players to descending deals at the same time. At one point, the contracts of all four of Kirk Hinrich, Andres Nocioni, Smiling Joe and Sulking Ben had contracts that shrunk on a year-by-year basis. The idea of this was to maintain future salary flexibility to allow them to retain Ben Gordon, Luol Deng and Tyrus Thomas […]
If your team didn’t agree to an extension with its starlet young player this past offseason – such as is the case with the Atlanta duo of Josh Childress and Josh Smith, the Chicago duo of Luol Deng and Ben Gordon, amongst others – then you’ve probably experienced a modicum of conversation as to whether that player will take the one-year qualifying offer this offseason rather than the security of a long-term deal, leaving the distinct possibility that your team will lose a key player and important asset, for nothing in return. Talk of this possibility happening is particularly widespread in the case of Gordon, who hasn’t done much to deny it. Let me try and set your mind at rest – it’s really not that likely. Or rather, it should be really unlikely. It might happen, but history suggests that it shouldn’t. This is a list of all the rookie scale players to have accepted the fifth-year qualifying offer in recent times, and how that went for them. Melvin Ely Season before free agency: 9.8 points, 4.9 rebounds, 51% shooting Season spent on Qualifying Offer: 3.0 points, 1.8 rebounds, 36% shooting Season after that: 3.9 points, 2.8 rebounds, 47% shooting Melvin Ely has had one year of average NBA production in seven attempts. That one season was, conveniently, the final one of his rookie contract. Never justifying his draft position, that one year gave Ely the chance to make a bit of money, especially given that it was probably his only other chance at a multi-year contract. (Ely was 28 at the time, after joining the league at age 24. Ely took Charlotte’s one year QO of $3,308,615 (which may or may not have been the only contract that they offered) in preference to taking Phoenix’s multi-year offer, […]
On Saturday afternoon, I went to a non-league football match. Football is a sport that we have in this country, which involves people kicking a ball with their foot (hence the name). It’s a tremendous sport of flair, innovation and foul language, which unites the whole entire world in its single-minded appreciation of how wonderful the beautiful game is. (There is an American variant out there called “soccer”, but it is marred by terrible broadcasting, stupid gimmicks, and a bad standard of play. It is not recommended.) The game was between Tonbridge Angels and Oxford United, an F.A. Trophy first round match. Oxford United were at home, which meant for us Angels fans a day trip out to a 12,000 seater stadium. For those unaware, Oxford United were good, back in the day. Then they went bankrupt. A man named Kassam saved them, bailed out the finances, and built them a new stadium. But it hasn’t done the team much good, and they have since fallen out of the Football League (and also fallen out with Kassam, although they are stuck with the stadium named after him). They’re also now flat broke again. Despite the team not befitting the stadium that houses them, the importance of the event and size of the stadium made it a highly entertaining day out for us visitors. The official attendance for the game was 1547, and if you don’t know what having 1547 people in a stadium that seats 12,000 looks like, then either watch the Florida Marlins at home, or look at the picture below: Of the 1547 people to attend, about 220 were Tonbridge Angels fans who had travelled a hell of a long way to support their team. These 220 people gave great voice, and showed the world (or at least, […]
Why aren’t NBA players loyal to their teams, such as how the fans are, and such as how the fans think that they should be? Ask Fred Jones. Jonesy signed with Toronto for three years and $9.9 million in July 2006, as a part of the Raptors’ cap room spending that season. The third year of the contract was a player option year, for $3.5 million. Upon being traded in February of this year to Portland in exchange for Juan Dixon, Jones agreed to forego his player option year as a part of the trade, a decision that, once made, cannot be recanted. Jones explained his acceptance to do this as such: “From seeing the team, knowing some of the players and knowing the direction they’re headed, I was more than happy to be a part of it”. Bless him. How sweet. Such gallantry and chivalry will serve him well in future life. Apparently, though, they aren’t good traits in this here NBA game. For it was barely four months later that Portland traded him once again, this time to New York as a part of the multi-player Zach Randolph deal. Still currently in New York, Jones is faced with the very real possibility of being waived by the Knicks, due to their present roster spots crunch and their desire to keep both Jared Jordan and Demetris Nichols. Jones was only included in the deal for his expiring contract, as was Dan Dickau – Dickau has already been waived, which doesn’t bode well for Jones. And if Jones does wind up getting waived, training camps have begun and most teams have full rosters. Barring a stroke of luck, the earliest return Fred would be looking at would be in early 2008. The irony is that Jones’ contract would not have […]
For those amongst you who, like me, have a strange fascination with transactions, both those finalized and those possible, this is a bad time of year for you. This is late August, the draft is long since gone, and most of the juicy bits of free agency have passed us by. Of the remaining free agents, only a select few are good enough to be starters in this league – Ruben Patterson to name……one – and merely the journeymen remain. This is the NBA’s equivalent of what it’s like to try and completely scrape clean an almost-empty pot of jam – you can try and try and try to clean every last morsel out of the jar, and occasionally strike it lucky with a decent-sized chunk. But most of the residual jam offers up stubborn resistance, and is not even worth your time – even if there was a practical way of getting it off there, you wouldn’t garner anything useful from it anyway. Additionally, when writing these new player profiles for the site, I have had a very tough time trying to keep them interesting. How, for example, do you make the profile of JamesOn Curry read wildly different to that of Jannero Pargo or Salim Stoudamire, when they are similar players? It’s a quandary that has cropped up all too often. Too many players are too alike too many other players, and too many players conform to stereotypes. So, let’s look at those stereotypes and give them broad definitions based around the pioneer – the trendsetter, if you will – of that particular stereotype. Every team needs their role players, after all. 1 – The Jerome Williams: The athletic forward whose main skill is the fact that they are an athletic forward. They’re too small to play […]
Consider what recent fortunes have been like for the Boston Celtics and Milwaukee Bucks. Last year, both of these teams pulled the incredibly-unsubtle-tank-job routine, rivalled only in blatantness by that of the Minnesota Timberwolves. So obvious was it that then-Celtic Ryan Gomes essentially admitted to the tank job in an interview, saying, and I quote: “I probably (would have played), but since we were in the hunt for a high draft pick, of course things are different,” Gomes said. “I understand that. Hopefully things get better. Now that we clinched at least having the second-most balls in the lottery, the last three games we’ll see what happens. We’ll see if we can go out and finish some games.” Say what you really feel, Ry. Both teams put most of their eggs in one basket, trying their best to lose out, hoping for one of the top two spots in this year’s draft, and thus a chance at Greg Oden or Kevin Durant. But both were the victims of bad karma, and failed to move up, ending up with the fifth and sixth picks respectively. From there, Boston has gone on to trade for two All-Stars, one of whom is arguably the most talented player of his generation still in the back end of his prime. They are left with plenty of work to do, yet they have become instantly vaulted towards the top of the Eastern Conference and into title contention. Whereas Milwaukee is mired in the middle of a soap opera. Enough has been said about Boston and what they’ve done, but Milwaukee and GM Larry Harris seem to have been overlooked somewhat. After a poor 2004-05 season in which they finished with a disappointing 30-52 record, the Bucks beat long odds to win the lottery, and also had maximum […]
