poison pill - trade allocation versus luxury tax allocation?
Posted: Fri Jan 3, 2020 1:54 pm
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.
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.