There follows a projection of all team's projected luxury tax payments for the upcoming season.
2009/10 Season:
- L.A. Lakers = $21,421,066
- Dallas Mavericks = $17,891,715
- Boston Celtics = $14,582,720
- New York Knicks = $13,510,463
- Cleveland Cavaliers = $12,740,694
- Utah Jazz = $12,628,526
- Orlando Magic = $11,068,795
- San Antonio Spurs = $10,160,736
- Washington Wizards = $8,731,745
- Phoenix Suns = $5,622,091
- Denver Nuggets = $5,383,687
- Miami Heat = $3,937,105
- Houston Rockets = $3,354,694
- New Orleans Hornets = $3,331,809
Total: $144,365,846
In the 2008/09 season, $87,352,665 was paid in luxury tax (see the breakdown above). 23 teams did not pay it, and 7 teams did. Each non-taxpaying team was therefore eligible for a rebate of $2,911,756 - one thirtieth of the overall tax kitty - and the league kept the remaining undistributed $20,382,277 - seven thirtieths of the overall tax kitty, i.e. the shares of the taxpaying teams that won't get it - for themselves.
This year, as you can see from all the tax that's projected to be paid, that rebate's going to be a lot higher. If the $144,365,846 figure above is all paid as tax, that will mean each non-taxpaying team is eligible for a significant rebate of $4,812,195. And no matter how rich you are, $5 million is quite a lot of money. That rebate, plus the rebate teams get from the escrow system, can go some ways to offsetting a team's salary commitment.
For example, last year, the New Orleans Hornets had a payroll of $66,858,141; to offset that, they gained a $2,911,756 luxury tax rebate, as well as a $6,467,847 escrow rebate (the players got none of their escrow back due to league wide salaries being so far in excess of the designated BRI percentage for them, so it was returned to the owners). That combined $9,379,603 made for a tidy 14% refund on their player salary expenses, and lessened their overall salary commitment to $57,478,528.
The escrow amount is not something a lot of people know about. Basically, if the league does bad then the players have to give back up to 9% of their pay... Which was what happened last year and will happen again this year.....
So what this means, if Detroit has team salary of $62 mil they'll get about $5.58 back in escrow and about $4.82 back in a luxury tax payment.... This means they get back a huge refund of about $10.4 million...
So even with a lot of empty seats the team may not do as bad financially this season as what many people (including myself) thought.
Also, being in the Tax territory is going to cost teams even more this year in missing out on that $4.8 million, so you might see a team like Phoenix, Houston, or New Orleans make a trade in which the give away a lot of talent / picks to get under the tax.... Almost makes me wish we would have waited and not signed CV and see what we could have gotten from a team looking to shed salary and save $10+ million this season.
