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Message
NBA looking to change Luxury Tax
Posted on 2/27/23 at 10:23 am
Posted on 2/27/23 at 10:23 am
Shams update on CBA negotiations which they say are close and hoping to complete in March.
LINK /
There are more issues they are discussing from the article including:
- Load management
- Diamond Sports (Bally's)
- Talks about getting rid of One and Done
- Increasing extension amounts so players will want them.
- Cap smoothing
quote:
Among the most critical issues, the NBA and NBPA are negotiating new luxury-tax tiers and rates to increase the lower tier and make it more viable for teams to spend money into the tax. As salaries continue to increase across the league, increasing the lower tax bracket tier allows the tax tiers to match up with the money being spent
...Currently, for between $0 and $4,999,999 over the cap, the tax rate is $1.50 for every dollar over the cap. For teams between $5,000,000 and $9,999,999 over the cap, the tax rate is $1.75 for every dollar over the cap. The NBA and NBPA are attempting to identify where the tax bracket tiers should be set — while maintaining the punitive state of the upper tax levels.
??Since everything about these dividing lines is completely up for negotiation in a new CBA, the two sides can redo them to make a small dip into the tax more manageable and then step up the charges for those franchises willing to dive head first into the tax. Increasing each of the thresholds that make up the luxury tax (often called “bands”) that lead to steeper tax payments also makes sense with a league that has much higher revenues and thus a much higher salary cap than they did in previous agreements.
LINK /
There are more issues they are discussing from the article including:
- Load management
- Diamond Sports (Bally's)
- Talks about getting rid of One and Done
- Increasing extension amounts so players will want them.
- Cap smoothing
5
Posted on 2/27/23 at 10:27 am to TigerinATL
The extra cost of dipping a little into the luxury tax isn't really what scares small market owners away. Its losing out on receiving the huge payments non-tax teams get from tax-paying teams.
Posted on 2/27/23 at 10:28 am to TigerinATL
That would be good for us.
Make bracket 1 much less prohibitive and the highest bracket EXTREMELY prohibitive.
Also maybe no repeater penalty for bracket 1?
Make bracket 1 much less prohibitive and the highest bracket EXTREMELY prohibitive.
Also maybe no repeater penalty for bracket 1?
Posted on 2/27/23 at 10:50 am to TigerinATL
quote:
Talks about getting rid of One and Done
Go straight to the league or stay for a minimum of two years
Posted on 2/27/23 at 11:04 am to CP3forMVP
quote:
Go straight to the league or stay for a minimum of two years
Wouldn't be a bad idea: it would make g league ignite more viable and NIL in college okay.
They need to allow an amnesty clause with these contracts though.
Posted on 2/27/23 at 11:15 am to CP3forMVP
quote:
quote:
Talks about getting rid of One and Done
Go straight to the league or stay for a minimum of two years
I thought about something but there is probably a downside.
What if any player that stays 4 years gets to become an unrestricted free agent? Doesn't have to go into the draft, can just sign with whichever team he wants. If he is good, they will bid for him.
What am I missing as a downside? Will this keep more players in college?
Posted on 2/27/23 at 11:23 am to TigerinATL
quote:Dame and Jerami Grant didn't play the 1st game back after the All Star break for REST
- Load management
Posted on 2/27/23 at 11:25 am to TigerinATL
teams like the Golden State, the two LA and NY teams, they don't care about the tax costs. It makes no difference to them if they have to pay $10M or $30M.
If they make the lower tier less of a penalty then those teams are going to live in them and it will make it easier for them to build winning teams. This seems like something that is going to help the small market team, but i think it just helps the big market teams more than anything. This just sounds like a way for the big market teams to not be penalized as much.
They can keep the system the way it is but allow teams that have drafted a player and signed them to a max extension for it to not fully count against the cap. This is how it would be beneficial to most small market teams. Zion, Giannis, Jokic/Murray/MPJ, Morant, Garland/Mobley, Fox, Lillard. And it would benefit teams like Philly/Phx/Miami/Boston as well for drafting good players.
You look at the two NY and LA teams and all of their good players are FA's. Let them pay the tax. They don't care about that. Keep it a punishment though that still helps the small market teams. This would help keep big name players on their small market teams, and really do nothing to change how the big market teams operate b/c they don't care about the tax anyway. Don't bail them out. Teams like the Lakers, Clippers and before they traded everyone Brooklyn deserve all the penalties thrown at them for buying their team. A team like Golden State should not be penalized for drafting 3 hall of famers and keeping them for 10+ years. Same with Boston and Philly.
If they make the lower tier less of a penalty then those teams are going to live in them and it will make it easier for them to build winning teams. This seems like something that is going to help the small market team, but i think it just helps the big market teams more than anything. This just sounds like a way for the big market teams to not be penalized as much.
They can keep the system the way it is but allow teams that have drafted a player and signed them to a max extension for it to not fully count against the cap. This is how it would be beneficial to most small market teams. Zion, Giannis, Jokic/Murray/MPJ, Morant, Garland/Mobley, Fox, Lillard. And it would benefit teams like Philly/Phx/Miami/Boston as well for drafting good players.
You look at the two NY and LA teams and all of their good players are FA's. Let them pay the tax. They don't care about that. Keep it a punishment though that still helps the small market teams. This would help keep big name players on their small market teams, and really do nothing to change how the big market teams operate b/c they don't care about the tax anyway. Don't bail them out. Teams like the Lakers, Clippers and before they traded everyone Brooklyn deserve all the penalties thrown at them for buying their team. A team like Golden State should not be penalized for drafting 3 hall of famers and keeping them for 10+ years. Same with Boston and Philly.
Posted on 2/27/23 at 11:55 am to TeddyPadillac
quote:
teams like the Golden State, the two LA and NY teams, they don't care about the tax costs. It makes no difference to them if they have to pay $10M or $30M.
If they make the lower tier less of a penalty then those teams are going to live in them and it will make it easier for them to build winning teams. This seems like something that is going to help the small market team, but i think it just helps the big market teams more than anything. This just sounds like a way for the big market teams to not be penalized as much.
There are many more teams right up against the tax (without going over) than teams just a little bit above the tax. That goes back to my point about teams not wanting to miss out on getting that big check for not being a tax team.
For the 2022 season, there were 9 teams in the tax. The lowest, Brooklyn, was over $7M above the tax line. Denver was next at over $8M. The rest were much higher.
In comparison, there were 11 teams within $5M of the luxury tax line without going over.
A change in the tiers would help small markets a lot more than it would hurt. It would also be nice if you could dip into the luxury tax (say within $5M) and still get to collect from the luxury tax pot, minus however much you are over the line.
This post was edited on 2/27/23 at 11:57 am
Posted on 2/27/23 at 12:00 pm to TeddyPadillac
quote:
If they make the lower tier less of a penalty then those teams are going to live in them and it will make it easier for them to build winning teams. This seems like something that is going to help the small market team, but i think it just helps the big market teams more than anything.
Lakers are $17 million over the tax line this year
Clippers are $40 million over
Warriors are $47 million over
Those teams are not going to live in the "lower tiers". Currently the 1st tier is $0-$4.99 million. Raise that first tier to say $10 million and maybe lower the rate from 1.5x to 1x and you'll have teams like the Pels and Grizzlies feeling a lot more comfortable going into it, and the big market teams will still be well above it unless it's a year where they are transitioning from out of the tax to into the tax.
This post was edited on 2/27/23 at 12:02 pm
Posted on 2/27/23 at 12:05 pm to TigerinATL
quote:It would help, but not sure how much.
Currently the 1st tier is $0-$4.99 million. Raise that first tier to say $10 million and maybe lower the rate from 1.5x to 1.25x and you'll have teams like the Pels and Grizzlies feeling a lot more comfortable going into it
Say, you're at $4mil over, 1.5x vs 1.25x is a difference of $1mil total. So yes, it IS a difference. But as someone pointed out, the big issue is missing out on the revenue share going back to you for not going into the tax, which is something like $17 mil a year lately.
So, rough match obviously, you're looking at "losing" $23mil total, but under your proposal, you lose $22mil. So a savings and a difference, no question. But enough to entice teams like the Pels and Grizzlies to dip into the tax? Not sure.
Don't get me wrong, I get where you gotta save at some point. Like the Warriors a few years ago, they added someone like Oubre and the total cost was something like $74mil for 1 season of Oubre. And also if you're a losing team not going anywhere, yea you're just wasting money by going into the tax. But generally speaking, if you're not going to spend up a little on your team, then why do you own the team?
This post was edited on 2/27/23 at 12:06 pm
Posted on 2/27/23 at 12:52 pm to shel311
quote:
It would help, but not sure how much.
Say, you're at $4mil over, 1.5x vs 1.25x is a difference of $1mil total. So yes, it IS a difference. But as someone pointed out, the big issue is missing out on the revenue share going back to you for not going into the tax, which is something like $17 mil a year lately.
So, rough match obviously, you're looking at "losing" $23mil total, but under your proposal, you lose $22mil. So a savings and a difference, no question. But enough to entice teams like the Pels and Grizzlies to dip into the tax? Not sure.
Don't get me wrong, I get where you gotta save at some point. Like the Warriors a few years ago, they added someone like Oubre and the total cost was something like $74mil for 1 season of Oubre. And also if you're a losing team not going anywhere, yea you're just wasting money by going into the tax. But generally speaking, if you're not going to spend up a little on your team, then why do you own the team?
Easy just make the first tier still award 100% of the revenue stream, second tier 50%, 3rd tier zilch.
It essentially plays the same role as today for the giga tax teams and allows the small market a more competitive structure.
This post was edited on 2/27/23 at 12:53 pm
Posted on 2/27/23 at 1:02 pm to 50_Tiger
quote:That hurts the Pels more than it helps.
Easy just make the first tier still award 100% of the revenue stream, second tier 50%, 3rd tier zilch.
Since we've never once paid the tax, and we'll obviously be a team that usually does not pay the tax, that is less of the pot to divy up and be sent to us every single season.
So it would end up costing us more money.
Posted on 2/27/23 at 4:00 pm to htran90
Amnesty pretty much happens every CBA.
Owners want it to get the cap room back, players want it so they can get a full buyout then pick their next team.
Owners want it to get the cap room back, players want it so they can get a full buyout then pick their next team.
Posted on 2/27/23 at 4:02 pm to teke184
I'm all the way against amnesty
Don't like teams/owners getting bail outs for their frick ups.
Probably could also argue, it'll make owners even more reckless with the deals they hand out.
Don't like teams/owners getting bail outs for their frick ups.
Probably could also argue, it'll make owners even more reckless with the deals they hand out.
Posted on 2/27/23 at 4:19 pm to shel311
I’m not seeing too many potential amnesty contracts as of this second.
Main one I see is Duncan Robinson, as the other long term big money deals appear to be for guys who are worth it or could get something in trade.
MAYBE the Wizards cut Beal if his production drops off and he refuses to accept a trade.
Main one I see is Duncan Robinson, as the other long term big money deals appear to be for guys who are worth it or could get something in trade.
MAYBE the Wizards cut Beal if his production drops off and he refuses to accept a trade.
Posted on 2/27/23 at 4:22 pm to teke184
quote:When I read this and before seeing your 2nd line, Duncan Robinson was the 1st that came to mind.
I’m not seeing too many potential amnesty contracts as of this second.
Though I guess the most obvious answer is Ben Simmons.
Posted on 2/27/23 at 4:37 pm to SaintEB
quote:
What if any player that stays 4 years gets to become an unrestricted free agent? Doesn't have to go into the draft, can just sign with whichever team he wants. If he is good, they will bid for him.
I really like this one. How about replace the 4 years with a college degree? Or either or..
Posted on 2/27/23 at 7:15 pm to Mickey Goldmill
I got an idea to fix the luxury tax - get rid of it. It’s stupid. Hard salary cap
Posted on 2/27/23 at 7:48 pm to SaintEB
quote:it probably would keep more players in college, but the NBA doesn’t care about that at all, so very doubtful anything like that would happen.
What am I missing as a downside? Will this keep more players in college?
the NBA wants the best players to be in the league as soon as possible
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