RealGM

Maybe I've been playing to much NBA Live but shouldn't we have a Mid Level Exception to offer a player?

Yea but it would put us in the luxury tax, unless we used a small part of it.

How much is the luxury tax? Is it a set amount or a percentage?

A little over 68 million.

Indy2thaWindy wrote:A little over 68 million.

The luxury tax is set at $70.3 million, and the Pacers already have $68.5 million committed for next year. If we sign Magnum Rolle, it would jump to right at $69 million committed, meaning we could only spend $1.3 million in salary before paying a dollar for dollar penalty via the luxury tax. That would also mean that we wouldn't get any of the luxury tax distribution payments at the end of the year, which would mean a $5.5 million guy (starting MLE salary) would really cost the Pacers around $12.7 million in salary, luxury tax, and lost distribution payments.

We simply aren't going to do that.

Thank you! I had no idea how that worked.

If we signed Magnum we wouldnt have any roster spots left anyways...

Just a side note... Is it possible to win a championship without being over it?

Is it possible to win a championship without being over the luxury tax?

Yes. It is. The Spurs in '07. The Heat in '06. The Spurs in '05. The Pistons in '04. Etc.

In fact, those teams were quite a bit below the luxury tax. Spurs in '05 were damn near under the salary cap.

It's possible. One of the things you'll see is that each of those teams either had a great player on a rookie contract, or had a HUGE team first attitude.

The teams that used to be waaaayyy over the luxury tax threshold a few years ago were actually some of the worst teams in the league. Ex: Knicks. Got stuck paying guys like Malik Rose and Jerome James the big $$$$$$$.

My bad. I got the numbers confused. I thought our payroll was the lux for some reason.

The tax gets you on a double whammy! Big Bucks no Whammy! When you go over you pay the dollar for dollar tax if you're $3 million over it costs you $3 million in tax, plus you lose most of your share of the tax collected. Here is the way I understand it: if $90 million is collected they divide that by the number of NBA teams 30, which means each team gets $3 million, but if you are over the tax threashold you don't get it! So if 15 teams are over $45 million goes back into the pot, and is divided by 30 again meaning each team gets $1.5 million, which is then paid out to every team. So even if you are over you get a piece of it.

So in my senario if the Pacers sign a guy for $5.5 million and that puts us $5 million over we pay $5.0 million in tax, plus the guys paycheck, and we lose $3 millon in pay out, meaning the MLE player costs the team $13.5 million.

basketballwacko2 wrote:The tax gets you on a double whammy! Big Bucks no Whammy! When you go over you pay the dollar for dollar tax if you're $3 million over it costs you $3 million in tax, plus you lose most of your share of the tax collected. Here is the way I understand it: if $90 million is collected they divide that by the number of NBA teams 30, which means each team gets $3 million, but if you are over the tax threashold you don't get it! So if 15 teams are over $45 million goes back into the pot, and is divided by 30 again meaning each team gets $1.5 million, which is then paid out to every team. So even if you are over you get a piece of it.

So in my senario if the Pacers sign a guy for $5.5 million and that puts us $5 million over we pay $5.0 million in tax, plus the guys paycheck, and we lose $3 millon in pay out, meaning the MLE player costs the team $13.5 million.

Thanks! Ive always wondered how that works!!!

colts2004 wrote:

basketballwacko2 wrote:The tax gets you on a double whammy! Big Bucks no Whammy! When you go over you pay the dollar for dollar tax if you're $3 million over it costs you $3 million in tax, plus you lose most of your share of the tax collected. Here is the way I understand it: if $90 million is collected they divide that by the number of NBA teams 30, which means each team gets $3 million, but if you are over the tax threashold you don't get it! So if 15 teams are over $45 million goes back into the pot, and is divided by 30 again meaning each team gets $1.5 million, which is then paid out to every team. So even if you are over you get a piece of it.

So in my senario if the Pacers sign a guy for $5.5 million and that puts us $5 million over we pay $5.0 million in tax, plus the guys paycheck, and we lose $3 millon in pay out, meaning the MLE player costs the team $13.5 million.

Thanks! Ive always wondered how that works!!!

Thanks but Scoot is the Expert! I just know a little.

School is in session. Start throwing some of this verbatim around and you could pose as an agent or something.