2017-18 Detroit Pistons Luxury Tax/Cap

[coordinator0]

With all of the rumors flying around about the Pistons wanting to cut costs to avoid the luxury tax I thought I would share the numbers the Pistons are working with so everybody has a good idea of where they stand. These are from my own sheet which was compiled using data from Basketball Insiders (Eric Pincus) and The Vertical (Bobby Marks). Here are the 2017-18 cap hits:

Andre Drummond = $23,775,506
Tobias Harris = $16,000,000
Reggie Jackson = $16,000,000
Jon Leuer = $10,497,319
Kentavious Caldwell-Pope = $9,195,797 (cap hold)
Boban Marjanovic = $7,000,000
Aron Baynes = $6,500,000 (player option)
Ish Smith = $6,000,000
Reggie Bullock = $5,639,111 (cap hold)
Josh Smith = $5,331,729 (dead money)
Marcus Morris = $5,000,000
Stanley Johnson = $3,097,800
Henry Ellenson = $1,780,800
Beno Udrih = $1,471,382 (cap hold)
Darrun Hilliard = $1,471,382 (non-guaranteed until 7-1-17)
Michael Gbinije = $1,312,611 ($500,000 guaranteed until 7-15-17)
2017 1st Round Pick

Total = $120,073,437
Cap Space = -$17,073,437 (estimated $102 million salary cap)
Luxury Tax Room = $1,926,563 (estimated $122 million luxury tax line)

So, it's not great. The new CBA actually hurt Detroit a bit here since the minimum salaries were raised. That affected the contracts of Hilliard and Gbinije while also raising the cap hold for Udrih. The cap hold for the 2017 1st round pick, which isn't factored in here, is also going to be a bit bigger than it was in the past.

Now let's assume Baynes opts out and the Pistons renounce their rights to Bullock. Neither of which are unreasonable or unlikely. That puts them at a hair over $14 million in room before the luxury tax is hit. With Caldwell-Pope already counting over $9 million against the cap the rest of first year of his new deal should fit in that extra space. However, like I said before that's still not counting the cap hold for the 2017 1st round pick.

The rights for Udrih are also probably going to be renounced. If needed he can be brought back later on another minimum contract so his rights aren't all that important. Hilliard can be waived before July with no guaranteed money hit and at this point I'm expecting it to happen. Darrun has shown nothing to suggest he's worth keeping on the roster and any extra bit of wiggle room helps.

With all that said it's looking like Detroit can stay under the luxury tax next season even if no moves are made by the deadline. It's going to be really, really tight though. How to say under and have a full roster is going to be a tricky situation without a trade or two that lowers the overall cap hit in 2017 .

[bstein14]

There is no reason for Gores to be paying the Tax for a team that isn't able to get out of the first round... If we were in the position of Boston or Toronto knocking on the door of making the Finals I would be upset with the team making moves to avoid the tax but right now I can't blame the team for looking to cut costs. Pope is looking more and more like a 4 year $100 million contract with so many teams having capspace.

[Snakebites]

There is no reason for Gores to be paying the Tax for a team that isn't able to get out of the first round... If we were in the position of Boston or Toronto knocking on the door of making the Finals I would be upset with the team making moves to avoid the tax but right now I can't blame the team for looking to cut costs. Pope is looking more and more like a 4 year $100 million contract with so many teams having capspace.

This. Its easy for us to say as fans that we don't want to take a step back, but we've got a team with no narrow shot at a championship at all and it just doesn't make sense for us to pay the tax to keep a team that's hit or miss to play .500 ball together.

[coordinator0]

Van Gundy and Bower have to be in a really tough spot if Gores wants them to cut costs (which Ellis and/or Beard are reporting that's NOT the case). Caldwell-Pope is the best player on the team right now, but he's also about to be the next biggest investment after Drummond.

Also, if it gets to the point where Kentavious accepts an offer sheet there's a very good chance Detroit will be in the luxury tax if they match it. Another team would more than likely structure it so the biggest cap hit is in 2017 while pushing the Pistons over the luxury line.

[Han Solo]

Moving downtown likely kills any "blow it up" scenario right now.

[DBC10]

I will bet the house that KCP is going to get offers from the Nets and Sixers.

That's basically guaranteed at this point. Look to the Nets to restructure that contract so they try to deter us from matching.

[Pharaoh]

I will bet the house that KCP is going to get offers from the Nets and Sixers.

That's basically guaranteed at this point. Look to the Nets to restructure that contract so they try to deter us from matching.

IMO Philly is the one that will offer the MAX.

Joel/Okafor
Saric/Simmons/Okafor
Simmons/Covington
KCP/Rookie
TJM/Someone else

IF we lose KCP then that's a disaster IMO.

RJ for Jeff Green & DJ might be y he way to go

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[ImHeisenberg]

So, basically we're under the tax line as long as we don't sign anybody of note. Sounds like we're on a terrific path. Another romping campaign to the 8th seed sweeper.

[princeofpalace]

we need to get out from under reggie and drummond

[DBC10]

I will bet the house that KCP is going to get offers from the Nets and Sixers.

That's basically guaranteed at this point. Look to the Nets to restructure that contract so they try to deter us from matching.

IMO Philly is the one that will offer the MAX.

Joel/Okafor
Saric/Simmons/Okafor
Simmons/Covington
KCP/Rookie
TJM/Someone else

IF we lose KCP then that's a disaster IMO.

RJ for Jeff Green & DJ might be y he way to go

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It would be. We would literally have no starting caliber SG, which would probably mean a significant retool since we neither Bullock or SJ are starting.

If we keep RJ and let KCP go, it'd be the end of this team for a while. It almost have to mean RJ has to go too and we'd go on a mini-rebuild since we wouldn't have talent to be competitive.

[Joe Berry]

This a non issue. Gores has said he would pay tax. And the Pistons got the whole offseason up until the 2018 deadline to avoid lux tax if (this team stays as mediocre as it is right now) necessary.
Not keeping our best player - KCP - no matter how much he will earn this offseason is not a solution to this problem.

[coordinator0]

This a non issue. Gores has said he would pay tax. And the Pistons got the whole offseason up until the 2018 deadline to avoid lux tax if (this team stays as mediocre as it is right now) necessary.
Not keeping our best player - KCP - no matter how much he will earn this offseason is not a solution to this problem.

For what it's worth I 100% agree with this. Caldwell-Pope is going to be a Piston come October regardless of the offer sheets he gets. I still think the Pistons will re-sign him before that though. That way his new deal can be structured in a way that's favorable to them.

Was just getting the numbers out there so everybody has an idea of what the situation is rather than only having a vague idea. This is the quote from a few months ago with Gores talking about the luxury tax:

http://www.freep.com/story/sports/nba/pistons/2016/08/07/detroit-pistons-owner-tom-gores/88360018/

Gores: “Look, if we weren’t building a core, there’s really no point in paying the luxury tax. Because we are building a core, would I do it? Yeah, absolutely. This is a tremendous team. If you go down the line, player by player, and especially our young folks, these are real players. You look at KCP as a very diverse player. He keeps working at his game and you look at his improvement and just like anybody else, he will improve in other areas. Part of Stan’s coaching philosophy obviously is defense. So you say go into the luxury tax for nothing, then that would be silly because then we’re putting the franchise behind. But given that we have such a good core, if that’s what it took, and we feel we’ve made such progress this year, I wouldn’t hesitate to do it because we want to keep getting better.”

On the other hand I really don't think Tom's commitment to paying the tax is set in stone. He didn't quite say that it's going to be paid regardless. There's a lot of leeway (and rightfully so on his part) in that statement and the part in bold could certainly be a sticking point.

[coordinator0]

Now that the Pistons are sitting with the 12th pick (assuming they don't move up) the numbers are a little bit clearer:

Andre Drummond = $23,775,506
Tobias Harris = $16,000,000
Reggie Jackson = $16,000,000
Jon Leuer = $10,497,319
Kentavious Caldwell-Pope = $9,195,797 (cap hold)
Boban Marjanovic = $7,000,000
Aron Baynes = $6,500,000 (player option)
Ish Smith = $6,000,000
Reggie Bullock = $5,639,111 (cap hold)
Josh Smith = $5,331,729 (dead money)
Marcus Morris = $5,000,000
Stanley Johnson = $3,097,800
2017 #12 Pick = $2,399,400 (full 120% of rookie scale)
Henry Ellenson = $1,780,800
Beno Udrih = $1,471,382 (cap hold)
Darrun Hilliard = $1,471,382 (non-guaranteed until 7-1-17)
Michael Gbinije = $1,312,611 ($500,000 guaranteed until 7-15-17)

Total = $122,472,837
Cap Space = -$21,472,837 (estimated $101 million salary cap)
Luxury Tax Room = -$1,472,837 (estimated $121 million luxury tax line)

With the new estimates for the salary cap and luxury tax line being $1 million lower than previously reported that's not great for Detroit. If you subtract the cap holds for Caldwell-Pope, Bullock, and Udrih that leaves the Pistons with $14,833,453 in room before they hit the estimated luxury tax line. Also assuming Baynes opts out that number increases to $21,333,453. If re-signing Caldwell-Pope is the plan then Detroit would have to stay under that number for the first year of his deal. But there's a catch. In this scenario that only leaves the team with 13 players. So Kentavious and one or two other players need to fit into that $21,333,453 for the team to stay out of the tax.

All of that is before trades of course, which would obviously change things. Cutting Hilliard and Gbinije would open up some immediate cap space but they would have to be replaced anyways so it wouldn't really do much in terms of the luxury tax.

[The Penguin]

Use Morris to move up in the draft and get Fox or Smith

Salary dump Reggie & Leuer

Baynes opts out, renounce Bullock & Udrih


Drummond ($23.8) / Boban ($7)
Tobias ($16) / Gibson ($10-$11 mil) / Ellenson ($1.8)
Stanley ($3) / PJ Tucker ($10-$11 mil)
KCP ($9.2) / Hilliard ($1.5) / Gbinije ($1.3)
Ish ($6) / Rookie ($2.5) (Fox or Smith)


Gives us about $20 mil of cap room to play with before resigning KCP.

Sign: PJ Tucker (Bulldog of a player, excellent defender, won't put up with garbage in the locker room) & Taj Gibson (another hard nosed guy who won't put up with anything, can get in Dre's ear and hopefully turn him around)

We still need some shooters, but that should give Stanley some room to grow, makes us 9 deep assuming we get solid contributions from the rookie PG and puts 2 vets with "Detroit Attitude" on the team .

[LaSheed]

If Hilliard is our backup SG we are doomed

[mercury]

First, we should all give coordinator +1 for the extra research. Props to one of our forum vets.
What Gores said in August could be completely different now after watching his "core" fall apart.
KCP is an anomaly... sure you should sign you're valuable RFAs... but without knowing what the league perception of his value is this could be a risky near max deal.... It's not like he's turning heads with his consistency & production... Will his big ass contract be tradeable later?... You can bet his agent will be pursuing trade restrictions. Certainly worth exploring S&T deals before removing all doubt about our future wiggle room.

[sc8581]

I'd sure like to talk Baynes into opting in and signing a big extension while trading Dre for a big piece, SF or PG probably.

[coordinator0]

I'm not 100% sure that the value for the 12th pick is correct. The page on Coon's FAQ with information for the rookie scale contracts might not have been updated yet. If that's the case the 120% value would be even higher, thus giving Detroit a bit less potential room under the tax line to work with. Everything else should be good though.

[Pharaoh]

Now that the Pistons are sitting with the 12th pick (assuming they don't move up) the numbers are a little bit clearer:

Andre Drummond = $23,775,506
Tobias Harris = $16,000,000
Reggie Jackson = $16,000,000
Jon Leuer = $10,497,319
Kentavious Caldwell-Pope = $9,195,797 (cap hold)
Boban Marjanovic = $7,000,000
Aron Baynes = $6,500,000 (player option)
Ish Smith = $6,000,000
Reggie Bullock = $5,639,111 (cap hold)
Josh Smith = $5,331,729 (dead money)
Marcus Morris = $5,000,000
Stanley Johnson = $3,097,800
2017 #12 Pick = $2,399,400 (full 120% of rookie scale)
Henry Ellenson = $1,780,800
Beno Udrih = $1,471,382 (cap hold)
Darrun Hilliard = $1,471,382 (non-guaranteed until 7-1-17)
Michael Gbinije = $1,312,611 ($500,000 guaranteed until 7-15-17)

Total = $122,472,837
Cap Space = -$21,472,837 (estimated $101 million salary cap)
Luxury Tax Room = -$1,472,837 (estimated $121 million luxury tax line)

With the new estimates for the salary cap and luxury tax line being $1 million lower than previously reported that's not great for Detroit. If you subtract the cap holds for Caldwell-Pope, Bullock, and Udrih that leaves the Pistons with $14,833,453 in room before they hit the estimated luxury tax line. Also assuming Baynes opts out that number increases to $21,333,453. If re-signing Caldwell-Pope is the plan then Detroit would have to stay under that number for the first year of his deal. But there's a catch. In this scenario that only leaves the team with 13 players. So Kentavious and one or two other players need to fit into that $21,333,453 for the team to stay out of the tax.

All of that is before trades of course, which would obviously change things. Cutting Hilliard and Gbinije would open up some immediate cap space but they would have to be replaced anyways so it wouldn't really do much in terms of the luxury tax.

Awesome work mate.

Assuming:

we dumped Hilliard for a minimum wage rookie

Baynes opts put
Beno is let go

Bullock is signed to a 1 year deal worth $5 mil

We sign Ray again for the minimum

Leaves us paying:

Dre, Bobo, #12
Jon, King, Mook, Smith
SJ, Harris
KCP, Bull, Benji
RJ, Ish, Ray

What's the tax situation look like before paying KCP then?

14 players on the real roster...not obligated to have 15

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[coordinator0]

Awesome work mate.

Assuming:

we dumped Hilliard for a minimum wage rookie

Baynes opts put
Beno is let go

Bullock is signed to a 1 year deal worth $5 mil

We sign Ray again for the minimum

Leaves us paying:

Dre, Bobo, #12
Jon, King, Mook, Smith
SJ, Harris
KCP, Bull, Benji
RJ, Ish, Ray

What's the tax situation look like before paying KCP then?

14 players on the real roster...not obligated to have 15

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Before paying Caldwell-Pope the Pistons would be looking at just over $16 million before they hit the tax line if my minimum numbers for McCallum and ___ rookie are correct. Detroit is going to have a really hard time giving Bullock any kind of money and staying under the tax line. That's why I'm betting on the 12th pick being a shooting guard.