The current tax state: 2008-09 $71.150 million

[drsd]

The NBA CBA FAQ states that the tax for the coming 2008-09 season is $71.150 million.
Link: The luxury tax
This is confirmed on other sites, including an ESPN reference.

I calculate the Magic's current 2008-09 payroll at around $67, and this is before the Magic save some coin by trading Bogans for Crittenton.
Link: Orlando Magic salaries without Pietrus and Augustine
That 67 is below last year's tax, as an example.

So, if true, the Magic are actually some $4 million under the tax. Why has there been so much tax talk if the Magic are nowhere near paying it???

Next year, there are no significant Magic FAs, and the luxury situation basically does not change for the Magic roster. And for the 2010/11 season, when the Magic will need to deal with Turkoglu, Battie and Cook come of the books at around a nearly $10 million combined clip (that is, the Magic could offer Turkoglu a near max deal and still be below the 2010/2011 luxury threshold).

It amazes how stable and solid the Magic contracts are in the coming years. Unless a disaster injury happens, GM Smith has established a long-term situation of stability that allows a MLE-type to be added every year through 2013.

[Shishnizzle]

I thought Turk could opt out after this coming season?

[Catledge]

Turk has a player option for 2009-10, which he will likely exercise if he has another season like the last one. So he'll be up for a new contract a year before Battie expires. Am I wrong about that?

[drsd]

Turk has a player option for 2009-10, which he will likely exercise if he has another season like the last one. So he'll be up for a new contract a year before Battie expires. Am I wrong about that?

You are correct that Hedo's option is in 2009/2010. As for whether he exercises it, and the circumstances that cause that, we will have to wait.

[magicfanatic23]

Turk has a player option for 2009-10, which he will likely exercise if he has another season like the last one. So he'll be up for a new contract a year before Battie expires. Am I wrong about that?

You are correct that Hedo's option is in 2009/2010. As for whether he exercises it, and the circumstances that cause that, we will have to wait.

If he has another all-star caliber year again this season, it is almost certain that he will opt out after next season. I would hope he would not but he can get more on the open market then what we are paying him right now.

[Howard Mass]

The Magic do have wiggle room under this year's tax but they need to use this and next's to re-sign Turkoglu.

It is a shame Dooling will not be back but it is part of the business.

[maginno]

It amazes how stable and solid the Magic contracts are in the coming years. Unless a disaster injury happens, GM Smith has established a long-term situation of stability that allows a MLE-type to be added every year through 2013.

Not getting your rationale here. This alleged "situation of stability" is based on players walking away and not knowing who is going to replace them? Thats defies the meaning of the word stability.

Second off if you signed Hedo to ten million dollars on the strength of expiring players you still have to replace those players if you want a compettitive team. So lets go ahead and crunch the numbers using your hoopshype figures. First off in 2011 you would be at 60 with hedo at ten million dollars and Pietrus BUT you would have a seven man team.

If you added two MLE type players over those two years then you'd stand at 70+ plus with a nine man team. Now you would have some draft picks but those would count (doesn't fran still count this year as well? fuzzy on that ) as well and then of course you still would want to round off at 12 players plus. By the time you factor in those salaries you are going to be right up against the tax level even assuming a 4 mill increase each year which is FAR from guaranteed.

At any rate I am pretty certain thereafter you can kiss your idea of adding Mle Type players through 2013 and this construct that Otis has such wonderful contracts they allow us to keep adding players and never hitting the tax out to 2013. You are simply imagining this unless you intend for us to compete with inferior talent which is hardly a plan.

[drsd]

Not getting your rationale here. This alleged "situation of stability" is based on players walking away and not knowing who is going to replace them? Thats defies the meaning of the word stability.

Stability in this economic sense is that the Magic are projected to be below the luxury tax for a number of years, whilst also having four projected starters locked into long-term deals. Nelson, Pietrus, Lewis, and Howard are all salary-known commodities for the next four-five years.

What about Hedo? Firstly, I think this is the last year that GM Smith gambles with Lewis and Turkoglu, but lets say Hedo opts and the Magic want to resign him. Let's also say the Magic offer a 11 million dollar starting salary (a number above what Hedo could get with other teams). Let's also assume that there are no trades for the next two years and the Magic have the same salary numbers to consider; otherwise this exercise would not be possible. Then what? The Magic would be at $69 million in payroll for 2010/2011. As the luxury threshold should be about 75 million, the Magic with ten roster players would have six million to cover them. And this six million is just about what the mid-level exception will be, conveniently.

But Hedo won't get 11, and the Magic will have traded away various players that will move these numbers. But still, the example of 2010/2011 shows how relatively simple it is for the Magic to stay under the luxury threshold.

[maginno]

Stability in this economic sense is that the Magic are projected to be below the luxury tax for a number of years, whilst also having four projected starters locked into long-term deals. Nelson, Pietrus, Lewis, and Howard are all salary-known commodities for the next four-five years.

Plenty teams have players locked up. Thats not the point. You projections don't work if you assume a standard twelve man team. the dollars vanish after 2011 not 2013.

there are no trades for the next two years and the Magic have the same salary numbers to consider; otherwise this exercise would not be possible.

Then the scenario is impossible. within two years using salaries we actually know about now there are only seven people on the team. thats my entire point and why your projections don't work

The Magic would be at $69 million in payroll for 2010/2011. As the luxury threshold should be about 75 million, the Magic with ten roster players would have six million to cover them.

What ten players? Your hoopshype figures don't factor in Pietrus and with 11 mill to Hedo they would be at the $60 million mark. If your contention is that we add two MLE like players in the next two years then the salary sits at about 70 million with 9 players. Factor in the cost of your first round picks and you are at or over the tax limit with 11 players. Even if you stay at ten by giving away a pick the next year the escalating nature of all the contracts will eat out the tax level increase after 2011. So again it is not amazingly structured so that we can sign an MLE like player through 2013 without hitting the tax level. FAR FROM IT. Your maths just does not add up.

But still, the example of 2010/2011 shows how relatively simple it is for the Magic to stay under the luxury threshold.

[/quote]

It shows nothing of the kind because no NBA team can continue to field a nine man roster. You are also assuming that we draft no one or that they will be so good that they will be able to fill the shoes of those going off the books.

[cwas2882]

Jesus fricktits. Hedo starting at 11 million? What are you guys, crazy? Hedo starting at 8 mil for 5 years with max raises is more than fair. Thats about what Maggette got and he's younger and a better scorer. You guys think teams are going to offer a 30 year old more than that? Seriously?

Also, you expect us to use the full MLE on one player each of the next two offseasons? That would mean that Pietrus didn't work out. It's more likely that we split it amongst a couple of players. MLE is to pring in an average starter, descent 6th man type players.

[maginno]

Hey I went with the numbers given me but it really doesn't matter. You are not going to restock a championship level team with partial MLEs. If you think that Jameer, Pietrus, Rashard and Hedo are so good that them with a bunch of scrubs can give you championship team you have my condolences. Me? I got to look at the rest of the league and contending teams in front of the magic. Facts are once you get up the the tax level the increase in existing salaries alone will keep you up against that tax. The idea that you are going to be able to keep upgrading the team without hitting the luxury tax all the way to 2013 is a fantasy.

The other fantasy is that Hedo will not opt out next year. For that to happen he will have to take a step backwards next year and then the salary cap is the least of your worries.

[cwas2882]

It would seem that Turk will opt out after this season and cook will not. I also have a question, have we picked up the option on Redick?

[maginno]

I may be wrong but my understanding was that the option does not kick in until next year.

[cwas2882]

Thats what I just said

[maginno]

I was referring to your question about Redick.

[drsd]

I was referring to your question about Redick.

The Magic have a team option for Redick in 2009/2010 at 2.8M . Then, in 2010/2011, the qualifying offer to retain Redick's restricted rights is 3.9M.