Lux Tax at $69.9mm. League says prepare for $61mm next year

[paulpressey25]

I think when you take a look at the money being paid to inferior players this summer,

You are falling back on the opposite side of your Gadzuric argument with Kirby from a few years back. We can't base what we pay our guys on what the "stupid money" is paying for other players. And the Bargs and CV contracts are in my opinion, stupid money.

Again, I'm not taking strong objection to Bogut's contract. But I'm also not going to give Hammond a high-five here on that deal just yet. Hammond paid a premium last summer for the right to not have to worry about this particular issue and rather focus on other areas of the team.

I might praise Hammond on this one next summer if Bogut finally delivers his 75 game 15/12/2 season.

[Nebula1]

Here's what I have:

Michael Redd $17,040,000
Andrew Bogut $10,000,000
Dan Gadzuric $6,749,260
Luke Ridnour $6,500,000
Amir Johnson $4,216,667
Bruce Bowen $4,100,000
Kurt Thomas $3,800,000
Charlie Bell $3,602,960
Joe Alexander $2,583,360
Francisco Elson $1,700,000
Malik Allen $1,300,000
Salim $884,881
Luc $736,420

Which adds to $63,213,548

-2.44244 for Salim and Bowen = $60,771,108 (assuming that Salim is 50% guaranteed)

+ Jennings at 120% (2,168,520) = $62,939,628

+ Meeks at 457,588 = $63,397,216

Most of these figures are through shamsports, Jennings I calculated with this link:
http://www.hoopsworld.com/Story.asp?story_id=9301

Meeks according to this: http://www.insidehoops.com/minimum-nba-salary.shtml

This roster is not very good. I hope Hammond can get the rebuild done quickly. Look at all those guys who have to come off: Michael Redd, Dan Gadzuric, Luke Ridnour, Bruce Bowen, Charlie Bell, Francisco Elson, Malik Allen, and Salim Stoudamire. That's half the team.

[europa]

I'm not falling onto the other side, Press. I had no problems with Bogut's contract last summer and I like it even more now when I see the money being paid to lesser players. Hammond gets a lot of praise from me for locking up Bogut when he did.

[Nebula1]

I'm not falling onto the other side, Press. I had no problems with Bogut's contract last summer and I like it even more now when I see the money being paid to lesser players. Hammond gets a lot of praise from me for locking up Bogut when he did.

He does have injury history... I like the deal too, but it's not like it's a homerun. What if he goes down again taking some dumb charge? Plus he can't score. Again, I like the deal, but if Bargnani turns into a Dirk, then I think it's debatable. I think Andrea sucks personally, but if he gets there, then it's debatable who got a better deal.

[GrandAdmiralDan]

fam is saying Jennings' salary will be $2.1M but several other reports are saying it will be $1.8M.

$1.807 mil is 100% of rookie scale.
1st round picks (especially lottery picks) have signed for 120% of scale (the maximum they can sign for) about 99% of the time since the advent of the rookie scale in the 1995 CBA.
That is why the number to use is $2.16852 mil

If it's the latter and Meeks gets $400,000

Minimum salary for Meeks is $457,588. It's possible we could give him more than that if we decided to use part of the MLE on him like we did when we signed Mbah A Moute, but it cannot be less than that.

How many days until we read that Hammond couldn't afford Sessions because the Luxury Tax number was lower than he expected?

3

The good news is Sessions' contract is looking like it could come in a lot lower than many of us anticipated. I could see his salary next season being around $4M. The market has almost entirely dried up for him. That's going to help Hammond quite a bit if it does unfold that way.

Agreed. Although I hesitate to speak too soon on that and jinx it. All it takes is one team to screw that up.
Lord knows we need SOMETHING to actually work out in our favor for once.

Look at the bright side - while we won't be able to field the roster we want, at least we didn't send RJ to Cleveland. That would have churned my stomach!

Amir Johnson $4,216,667

I can offer at least a small amount of good news here. Amir's number is lower than that.
Sham mistakenly applied his entire TK to 09-10 cap number when it was actually split between 08-09 and 09-10 as far as the cap number.

Amir's actual number where the salary cap and luxury tax is concerned is $3.941667 mil

Yeps. I'd assume Meeks will negotiate a bigger salary than the minimum

I definitely wouldn't assume that, given the Bucks financial situation and that the norm for 2nd round picks is to sign a 2 year minimum salary contract.

But, it is indeed possible that we choose to give him a larger 1st year salary in exchange for a 3rd NG'd year at the minimum salary, using the MLE like we did with Mbah A Moute.

and I think only half of Bowen's trade kick amount is guaranteed, but that's peanuts.

The trade kicker is paid in full when the trade occurs. It his base salary that is partially NG'd. His TK was $300k. $200k got applied to the 08-09 cap number and $100k got applied to the 09-10 cap number. That doesn't change. So it's $4.1 mil if Bowen isn't waived by July 31st, and $2.1 mil if he is waived by then.

[emunney]

I adjusted my figures on the previous page in accordance with GAD's info. Looks like 6,797,784 under the lux threshold

[MartyConlonOnTheRun]

Sign Sessions for 4.7 and Ersan for 2 and call it a day.

[paul]

Sign Sessions for 4.7 and Ersan for 2 and call it a day.

We still have mad expirings (about $23m?), we aren't done imo and I don't think we'll be calling it a day after those two moves.

[MartyConlonOnTheRun]

Yea, I have the feeling they still want Childress, but I really don't think this is the year to contend. I would rather wait until Jan. Access the situation, see who needs a vet that is expiring. If no offers, wait until the end of the year and save the cash.

[GrandAdmiralDan]

For whatever reason I had not checked my email in a number of hours, so I was unaware I had a pretty important email containing an official NBA memo for release this morning.

There is quite a lot of interesting data in there.

But one thing that we REALLY need to factor in when looking at what we are doing this offseason is not only what the lux tax threshold is for 09-10, but what it could be for 10-11.

We've talked about this before. Even back earlier in the season when people were dooming and glooming about the 09-10 threshold being between $65 mil to $68 mil, I said at that time that kind of drop wouldn't yet be possible because of the buffer system the CBA uses, so 10-11 was the more worrisome year.

But the NBA's current projections for the 10-11 lux tax threshold is $65 mil, factoring in a 2.5% drop in BRI from 08-09 to 09-10

There actually was NOT a drop in BRI for 08-09 ($3.608 billion) as compared to 07-08 ($3.519 billion), despite all of the economic conditions, so one or more significant TV contracts must have run out for the NBA to forecast that kind of drop.

Also, the amount of the players salaries held in escrow was for the first time not sufficient to cover the overage of salaries & benefits, which also drags the salary cap and lux tax numbers down for 10-11. Of the 9% of salary held in escrow in the 07-08 season, amounting to $184.9 mil, $163.4 mil was used to cover the overage leaving $21.5 mil that was returned to the players. For 09-10, the escrow amount of $194 mil wasn't even sufficient to cover the $219.8 mil overage, so not only was there a larger than normal overage, but there was actually a $25.8 mil shortfall. That might not seem like a big deal relative to all of the other large numbers at play here, but trust me, it is. The overage amount itself already impacts the next salary cap and lux tax thresholds, and a shortfall amount further compounds that.

The NBA also is taking an overly cautious and borderline insane approach and issuing an additional warning to teams that it would be prudent not to plan to the 10-11 projection of $53.6 mil salary cap and $65 mil lux tax, but rather to plan for a $50.4 mil salary cap and $61.2 mil lux tax, just in case.
That's going too far, IMO. Yes, things could get that bad. But we'd probably be to the point of 20%+ unemployment and lines for soup and bread handouts Great Depression style for the climate to be right for that kind of drop. I mean, what if we end up having a nuclear war with Iran and North Korea, simultaneously? Should teams be preparing for that contingency too? At a certain point contingency planning is not productive.

Personally, I think the NBA ratcheted up the doom and gloom in that memo because they didn't feel like teams were appropriately adjusting their fiscal discipline so far this offseason.

But we should for the time being use that $65 mil figure for the 10-11 lux tax threshold and keep that in mind when looking at any moves made this offseason, in addition to the 09-10 lux tax threshold.

[paulpressey25]

I'm bringing this info over from KIAM's thread.

In a memo announcing next season's salary cap and luxury-tax threshold, sent out shortly before the league's annual July moratorium on signings and trades was lifted at 12:01 a.m. Wednesday, NBA teams also received tentative projections from the league warning that the cap is estimated to drop to somewhere between $50.4 million and $53.6 million for the 2010-11 season.

The official league memorandum, obtained by ESPN.com, forecasts a dip in basketball-related income in the 2009-10 season of 2.5 percent to 5 percent, which threatens to take the 2010-11 cap down some $5 million to $8 million from last season's $58.7 million salary cap.

A significant drop for the luxury-tax threshold is also projected going into the summer of 2010. If basketball-related income drops by 2.5 percent in 2009-10, league officials are projecting a 2010-11 salary cap of $53.6 million and a luxury-tax line of $65 million. If BRI, as it is referred to in the NBA, decreases by five percent, teams would be looking at a $50.4 million salary cap and a luxury-tax line of $61.2 million in 2010-11.

http://sports.espn.go.com/nba/news/story?id=4312837

I know we already have a topic about this years Tax line and Cap, but I figured this deserved a thread of its own since its a potentially big story. If you just want to lump it in with the other story and thread though go ahead.

[GrandAdmiralDan]

Yeah, that thread wasn't there when I started typing my prior post. Oops

I also was unaware of that ESPN article, but it should have occurred to me that Marc Stein would be getting that memo as well.

Stein highlighted the taxpaying teams data, but that was already closely estimated anyway (a fairly easy calculation) so it didn't even seem like news to me otherwise I would have mentioned it

I do think it is strange that he didn't mention the actual BRI numbers like I did. The fact that it actually increased in 09-10 as compared to 08-09 is quite significant.

[paulpressey25]

But one thing that we REALLY need to factor in when looking at what we are doing this offseason is not only what the lux tax threshold is for 09-10, but what it could be for 10-11.

I know you are in agreement here, but this is where Hammond screwed the pooch last year. This situation was fairly well known as of last October and we had a simple solution to it. Trade Michael Redd for an expiring as soon as possible. Have the team move on without him. That single move, or lack of it will cause the Bucks more headaches than they obviously planned for. I mean all this team has been doing the past five-months is trying to dig out from that mistake. Trading Redd solved ALL of these problems we are now making countless moves to try and correct. Ok, my Hammond rant is over for now.

Going to the comments by Nowak and others, this situation has major implications.

a) IMO we can't afford Childress at the type of contract we've been talking about (5/$31). He'll have to settle for something less.
b) We'll have to see if the market for RFA's right now really shuts down which could benefit the Ramon situation.
c) Michael Redd's contract still needs to moved asap if there is some way to cut a year off it.

[Chapter29]

Yes. Most definitely just move Redd to relieve yourself of his salary.

Who cares what we get in return because that cap space will win us some serious games.

It's not like Redd is our best player or anything and we have a line of top end talent just waiting and begging to come to Milwaukee.

[GrandAdmiralDan]

I know you are in agreement here, but this is where Hammond screwed the pooch last year. This situation was fairly well known as of last October and we had a simple solution to it. Trade Michael Redd for an expiring as soon as possible. Have the team move on without him. That single move, or lack of it will cause the Bucks more headaches than they obviously planned for. I mean all this team has been doing the past five-months is trying to dig out from that mistake. Trading Redd solved ALL of these problems we are now making countless moves to try and correct. Ok, my Hammond rant is over for now.

That's because Hammond made a foolish gamble that it was safe to hold onto Redd and see if he could possibly squeeze more value out of him in a trade, rather than just being glad we were able to get rid of him via the available offers.

Going to the comments by Nowak and others, this situation has major implications.

a) IMO we can't afford Childress at the type of contract we've been talking about (5/$31). He'll have to settle for something less.

We CAN afford it currently because we have enough salary coming off the books anyway after this season to account for Sessions, Ersan, another 1st round pick, another 2nd round pick, Childress, and even another MLE FA and still stay under that $65 mil threshold. After this offseason, the next of our current players that would need to be paid would be Mbah A Moute, but that's not really a concern because Redd and Gadzuric are off the books then.

It's comes down once again to whether or not spending that kind of money on Childress is prudent as compared with maintaining more flexibility to do other things instead.
Just one example would be that idea that was mentioned in the thread on Boozer. You cannot do something like trade expiring contracts in a Boozer extension-and-trade and then also bring in Childress in addition to Sessions and Ersan. So anything like that would have to be back off the table, in part due to having to plan for a $65 mil threshold for 10-11.

b) We'll have to see if the market for RFA's right now really shuts down which could benefit the Ramon situation.

Possibly. But the offseason so far certainly hasn't reflected a new adherence to fiscal discipline.
Maybe the RFA market will be affected, but given the rest of the offseason I would not yet make that assumption.

[LUKE23]

Until we do anything with Salim/Bowen/Thomas, we're at $65,464,656 for 15 players, by my calculations. Bowen for Childress adds $1.1M, so we'd be at $66,564,656. Ersan at $2M puts us at $68,564,656. Sessions anywhere between $4M-$5.8M puts us between $72,564,656 and $74,364,656.

So we'll need to clear anywhere between $2.6M and $4.4M, roughly if we do Bowen for Childress, and $1.5M and $3.3M if we don't do Bowen for Childress. Either way, decent shape, but should have done RJ for Wally.

[tyland]

Based on the projections for next season, does this increase other teams desire to trade for Ridnour and his expiring contract? Personally I think it would.

[worthlessBucks]

Based on the projections for next season, does this increase other teams desire to trade for Ridnour and his expiring contract? Personally I think it would.

Now examine why that would be. These teams have long term liabilities and would prefer to get under the luxury tax in the short term by dumping said long term junk contracts. Teams will peddle 2 year crap for our 1 year version.

[LUKE23]

Based on the projections for next season, does this increase other teams desire to trade for Ridnour and his expiring contract? Personally I think it would.

That would assume they are moving a non-expiring deal to get Ridnour's contract. I would hope that Hammond would not add salary for next year to shave minimal salary (the most we can shave in a Ridnour deal is like $1.3M with a team over the cap, which is nearly everyone right now). If Ridnour is traded, it had better be for an expiring that makes less in 2009-10. If Hammond can't even get that, then wow the Mo trade was a failure.

[tyland]

Based on the projections for next season, does this increase other teams desire to trade for Ridnour and his expiring contract? Personally I think it would.

That would assume they are moving a non-expiring deal to get Ridnour's contract. I would hope that Hammond would not add salary for next year to shave minimal salary (the most we can shave in a Ridnour deal is like $1.3M with a team over the cap, which is nearly everyone right now). If Ridnour is traded, it had better be for an expiring that makes less in 2009-10. If Hammond can't even get that, then wow the Mo trade was a failure.

I agree entirely. I am hoping we can trade for a non-guaranteed deal that will help else immediately (re-sign Sessions, sign Ersan and maybe Childress) and help out the other team at the end of the season. With the likelyhood that other teams are looking to further slash money, I think Ridnour will become more appealing for teams looking to have a steady (albeit mediocre) PG off the bench that is a one-year loan.