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Revenue Sharing & Luxury Tax

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Post#1 Revenue Sharing & Luxury Tax
Tue Aug 14, 2012 4:23 pm by Ephus

Am I correct that the cap on revenue sharing at 30% of profits is based off of a determination of profits after determination of the luxury tax? For example, Larry Coon has an e-mail today stating that the Lakers are expected to make a revenue sharing payment of $49.8 million this year. Does that mean that the Lakers are expected to make a post-tax profit of $166 million this year, and a bottom line profit of $116 million?
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Post#2 Re: Revenue Sharing & Luxury Tax
Tue Aug 14, 2012 9:13 pm by DBoys

Ephus wrote:Am I correct that the cap on revenue sharing at 30% of profits is based off of a determination of profits after determination of the luxury tax? For example, Larry Coon has an e-mail today stating that the Lakers are expected to make a revenue sharing payment of $49.8 million this year. Does that mean that the Lakers are expected to make a post-tax profit of $166 million this year, and a bottom line profit of $116 million?


The email you're referencing was presumably one from Coon to Henry Abbott, mentioned in this article: http://espn.go.com/blog/truehoop/post/_ ... super-team

The reference there was not about this year, but rather about 2013-14. But yes, profit for purposes of revenue sharing would presumably be determined after all expenses (including luxury tax), which would mean under the assumptions Coon made, the Lakers would make a post-tax profit of $166 million for the year in question, with a bottom line of $116 million in net profit for the Buss family for that season.
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Post#3 Re: Revenue Sharing & Luxury Tax
Wed Aug 15, 2012 12:55 am by Dunkenstein

Unfortunately for the Buss family, Jerry has sold off a number of pieces of the Lakers over the years, so I doubt the Busses will even see $50M of that projected net profit.
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Post#4 Re: Revenue Sharing & Luxury Tax
Sun Aug 19, 2012 6:23 pm by Ephus

In a twitter exchange with me, Larry Coon stated that luxury tax payments do not reduce team profits for purposes of determining revenue sharing payments.
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