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TigerinATL
New Orleans Pelicans Fan
Member since Feb 2005
54808 posts

How will the next TV deal impact the Pels and going into the tax?
TL;DR - The next TV deal in 4 years could give teams an extra $69 million per year in revenue. That would seem to change some of the variables over the next few years in determining how acceptable it is to go into the tax.

This could be important for how soon the Pels go into the tax. The current national TV deal is worth about $2.6 Billion per year to the league. The expectations are that they can triple that and get $7-$8 Billion per year on a new deal that would start in the 2025-26 season, 4 years from now. LINK

Let's say it's $7 Billion and the CBA split stays 50/50. $7 - $2.6 = $4.4 Billion in new money. Teams get $2.2 Billion per year with the other $2.2 flowing into the salary cap. Let's further say there are 2 new expansion teams by then.

$2.2 Billion/32 Teams = $69 million in new money per team per year. Teams getting an extra $69 million on top of what they have now should help pay a lot of taxes. It is possible the next TV deal could impact local TV deals, but the Pels are only getting around $12-$14 per year now, so for small market teams this would be a huge wind fall.

A lot can happen in the world in 4 years, so maybe you don't want to spend $10s of millions in tax now expecting the next TV deal to cover your losses and then some. But if the projections are even halfway close to true, it feels like the Pels shouldn't fear the tax the closer they get to the new TV deal.

Side note, that would also mean $69 million flowing into the Salary Cap, so Zion on a Rose Rule max that starts in 23-24 might look like peanuts. Likewise a new deal for Ingram in 25-26 could look terrifying.
This post was edited on 6/8 at 11:10 pm


shel311
Nicholls St. Fan
McKinney, Texas
Member since Aug 2004
84924 posts
 Online 

re: How will the next TV deal impact the Pels and going into the tax?
quote:

Side note, that would also mean $69 million flowing into the Salary Cap, so Zion on a Rose Rule max that starts in 23-24 might look like peanuts. Likewise a new deal for Ingram in 25-26 could look terrifying.

So it ultimately doesn't really help at all for the tax then, right?

The additional money is going to go right into additional salary for the cap, essentially breaking even there, and leaving us with the same tax decisions as now, right?


TigerinATL
New Orleans Pelicans Fan
Member since Feb 2005
54808 posts

re: How will the next TV deal impact the Pels and going into the tax?
quote:

So it ultimately doesn't really help at all for the tax then, right? The additional money is going to go right into additional salary for the cap,


The 50/50 split means $2.2 million of that $4.4 million would go to the cap increasing the cap by $69 million but it doesn't go directly to the players. Teams would technically get 1/32nd of the full $4.4 million, or $138 million, of which they'd have more obligations in player salary with the increased cap. So teams would get $138 million but the cap would increase $69 million. I was trying to make it simple by just focusing on the $69 million figure, sorry if I made it more confusing.

The bottom line is that teams should have roughly $70 million in new money from the next TV deal, and they already got at least $30 million in new money from the last deal. So the Gayle Benson Pelicans would have roughly $100 million more per year to work with than the George Shinn Hornets did. That's why I'm saying it seems like they may not need to be as allergic to the tax as small market teams usually are.


GOP_Tiger
LSU Fan
Baton Rouge
Member since Jan 2005
8262 posts

re: How will the next TV deal impact the Pels and going into the tax?
It's a real argument for just paying Lonzo market price. Don't fear the repeater tax, because you can go into the tax this year and get out of it if you need to.



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shel311
Nicholls St. Fan
McKinney, Texas
Member since Aug 2004
84924 posts
 Online 

re: How will the next TV deal impact the Pels and going into the tax?
quote:

So teams would get $138 million but the cap would increase $69 million. I was trying to make it simple by just focusing on the $69 million figure, sorry if I made it more confusing.

The bottom line is that teams should have roughly $70 million in new money from the next TV deal,
Thanks, this does make sense now. Good stuff.


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htran90
New Orleans Saints Fan
BC
Member since Dec 2012
26881 posts

re: How will the next TV deal impact the Pels and going into the tax?
In reality, Zion could just sign a what...3 year deal and then go into the a 5 year super max on the new TV deal right?

someone would have to calculate the #s, but i think it'd actually be financially smarter to do so, assuming he risks injury.


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