poison pill - trade allocation versus luxury tax allocation?

[Village Idiot]

I am a Blazers fan messing around with Ben Simmons trades and have a question regarding luxury tax calculation.

Let's operate with this example where Portland has incoming:

Ben Simmons - incoming trade value of $25,720,983 ((8.31+29.25+31.59+33.93)/4)
Jrue Holiday $26,131,111
Khem Burch $3,000,000

total for trade purposes - $56,688,070

Outgoing salaries (other considerations such as picks are irrelevant here) -

CJ McCollum $27,556,959
Hassan Whiteside $27,093,019
Anfernee Simons $2,149,560

sum: $56,799,538

with Portland being hard capped this trade appears to be legal since they send out more than they receive.

The question then becomes what is the impact on Portland's salary and luxury tax.

The difference between incoming value in incoming salary is $19,554,497 which is the delta between the incoming trade value of $25,720,983 and his actual salary of $8,113,930 plus the minor difference in salaries.

According to Sham sports, Portland is $11,133,321 above the luxury tax threshold.

The question then is which number is used for salary cap and luxury tax calculations? Simmons actual salary of $8,113,930 or the incoming trade value of $25,720,983.

If it is the former the Blazers would save themselves a $19 million luxury tax payment and has a major bearing on how much sweetner could be added to grease the wheels on a deal like this.

[DBoys]

My comments ...
1 The math might be legal from Portland's end, but that doesn't guarantee this trade is possible. (We don't even know what it is, of course, because we don't know who goes where - but just saying.) ALL teams must satisfy the trade rules.
2 "Legal" doesn't mean all the teams in the deal are getting enough value to motivate them to swap. So there's that.
3 Simmons salary would be his cap hit after such a trade.

[Village Idiot]

My comments ...
1 The math might be legal from Portland's end, but that doesn't guarantee this trade is possible. (We don't even know what it is, of course, because we don't know who goes where - but just saying.) ALL teams must satisfy the trade rules.
2 "Legal" doesn't mean all the teams in the deal are getting enough value to motivate them to swap. So there's that.
3 Simmons salary would be his cap hit after such a trade.

1. I did the trade in excel since none of the trade checkers account for the poison pill and/or allow to include McCollum yet. It works, just barely, as far as I can tell provided the numbers at Shamsports are correct. That was not the question though.
2. Not relevant to the question. I might put it out on the t+t board but first wanted to understand the whole picture.
3. That was the question. Thanks for answering it. Wondering what you based your answer on? Any additional clarification would be appreciated.

[DBoys]

1 I mention the rest of the trade because I suspect that PHI end of things would prove to be very illegal, if we saw the rest.
2 Technically you are correct, point taken. But you were the one who started the discussion of "reasons why" in the first place.
3 NBA CBA.

[Smitty731]

The math is also off on Simmons. As well as his extension is for 5 years, not three.

[Village Idiot]

The math is also off on Simmons. As well as his extension is for 5 years, not three.

Thanks Smitty. Using your numbers and an average salary of $29,385,655 makes it more challenging.

I see you have Portland as not being hard capped which was an assumption I had been making. That makes it a bit easier.

1 I mention the rest of the trade because I suspect that PHI end of things would prove to be very illegal, if we saw the rest.
2 Technically you are correct, point taken. But you were the one who started the discussion of "reasons why" in the first place.
3 NBA CBA.

I'll have to take your word for it. Appreciate it. In any case very interesting to know that if Portland could swing a deal like this it could mean massive luxury tax savings. The devil is very much in the details.

Thanks guys. I'll mess around some more with excel then. Half the fun

[Village Idiot]

I mention the rest of the trade because I suspect that PHI end of things would prove to be very illegal, if we saw the rest.

Here's an updated proposal with the 5 year extension numbers for Simmons. Appreciate any comments on the legality or value.

Philadelphia trades:

Incoming salary value for Simmons

Ben Simmons $8,113,930
Al Horford $28,000,000
Matisse Tybulle $2,582,160
Mike Scott $4,767,000

Sum: ($43,463,090 x 1.25) + 100,000 = permitted incoming salaries $54,328,862.50


Philadelphia receives:

CJ McCollum $27,556,000.00
Aaron Gordon $19,863,636.00

Sum $47,419,636.00

Philadelphia receives $3,956,546 more than it sends out but stays below the luxury tax threshold

New Orleans trades:

Jrue Holiday $26,231,111

can receive $32,888,888.75 in salary

New Orleans receives:

Al Horford $28,000,000
Matisse Tybulle $2,582,160
1st from Portland - protections 2020-22 lottery . converts to first to available 2nds thereafter

sum: $30,582,160

Orlando trades:

Aaron Gordon $19,863,636
DJ Augustin $7,500,000
Khem Birch $3,000,000

sum: $30,363,636 can receive up to $38,054,545 in salary

Orlando receives:

Hassan Whiteside $27,093,019.00
Anfernee Simons $2,149,550.00
Nassir Little $2,105,520.00
Mike Scott $4,767,000

$36,115,089.00

Portland trades:

CJ McCollum $27,556,000
Hassan Whiteside $27,093,019
Anfernee Simons $2,149,550
Nassir Little $2,105,520
1st to New Orleans - protections 2020-22 lottery. Converts to first to available 2nds thereafter

sum: $58,904,089 can receive up to $73,730,111.25

Portland receives:

Ben Simmons $29,385,655
Jrue Holiday $26,231,111
Khem Birch $3,000,000
DJ Augustin $7,500,000

$66,116,766

Despite Portland taking on $7.2 million more in trade value, Simmon's actual salary is $8,113,930, the annualized salaries Portland ends up with is $14,059,048 lower than current. According to Smitty they are currently $ 12,383,320 above the tax line so this gets the Blazers off the hook for $20 million in luxury tax payments in addition to salary savings.

[Mamba4Goat]

I have a similar-ish question I've been wondering. Could GS cleared space below the lux tax (say they dumped WCS or Looney for no incoming salary) could they take a guy like Levert into their TPE even though his "incoming" PPP salary exceeds the hard cap while his real salary doesn't and the TPE is large enough to be able to absorb the PPP salary?