2024 Off-Season: Teams That Need To Get Creative Tax-Wise

[basketballwacko2]

Celtics just endure the tax.

Cash flow is not an issue. One of the owners (the elder Grousbeck) is a very multi-billionaire. Further, the owners come from private equity backgrounds, so if they did run into cash flow issues they'd know how to do something about it. Their charitable activities also suggest they have plenty of cash.

All of the owners are billionaires and no one wants to pay tax if they are not in the running to make the finals.

[Fencer reregistered]

Celtics just endure the tax.

Cash flow is not an issue. One of the owners (the elder Grousbeck) is a very multi-billionaire. Further, the owners come from private equity backgrounds, so if they did run into cash flow issues they'd know how to do something about it. Their charitable activities also suggest they have plenty of cash.

All of the owners are billionaires and no one wants to pay tax if they are not in the running to make the finals.

The Celtics are in the running to make the Finals.

[basketballwacko2]

Celtics just endure the tax.

Cash flow is not an issue. One of the owners (the elder Grousbeck) is a very multi-billionaire. Further, the owners come from private equity backgrounds, so if they did run into cash flow issues they'd know how to do something about it. Their charitable activities also suggest they have plenty of cash.

All of the owners are billionaires and no one wants to pay tax if they are not in the running to make the finals.

The Celtics are in the running to make the Finals.

Sure but saying, "The owner is a Billionaire" is no reason to pay the tax, they are all billionaires.

[Fencer reregistered]

All of the owners are billionaires and no one wants to pay tax if they are not in the running to make the finals.

The Celtics are in the running to make the Finals.

Sure but saying, "The owner is a Billionaire" is no reason to pay the tax, they are all billionaires.

Yeah, I left out some steps from the argument. I thought they would be obvious. My bad.

-- Businesses are meant to return money to their owners in two main kinds of ways. Either they actually pay out cash from earnings, or their overall value goes up and owners sell some or all of their equity.

-- Value of sports teams is based on their potential to make money, and also on whatever premium owners want to pay for the coolness of owning part of a sports team. Winning teams do better than losing teams in both of those respects.

-- Except in a few cases, which are concentrated in particularly small markets, owners are generally willing to pay for genuinely championship-contending teams.

-- I infer from that that there's a consensus -- right or wrong as the case may be -- that it's good business to spend money in that way. I'm guessing that the consensus is indeed correct.

-- However, if ownership has a difficult-to-resolve cash flow crunch, such spending could be restricted anyway.

-- I argued that the Celtics are unlikely to have a difficult-to-resolve cash flow crunch.

[Mavrelous]

Warriors are in an interesting situation.

We're currently sitting about $3M over the tax line with 11 players under contract, before re-signing Klay. CP3 has $30M unguaranteed, and Looney also has $5M of his $8M unguaranteed. We don't have any picks this year to sign.

I think by far the most likely scenario is we release CP3, re-sign Klay to something in the $15-20M/year range, and fill out the rest of the roster with minimums to sneak under the tax line. But if we guarantee CP3's contract to make a bigger move, things get interesting.

Can the Warriors aggregate Paul with Looney or GP, Kids etc - and then resign Klay and go back over the second apron? Or does the new rule hard cap once a team aggregates in a trade? That seems extreme.

But maybe it’s “over the apron including cap holds can’t aggregate” or such..

Random.

If GS aggregates Paul with Looney after the last day of this regular season, they would then be hard capped at the 2nd apron. If they salary matched at anything over 100% of a package in any trade they would be hard capped at the first apron. Etc.

Trading over 100% hardcaps at 1st Apron?
Man that's tough...
DAL is right at tax, with 12 players on payroll, I though TPMLE is going to DJJ and THJ expiring for larger contract and they operate over the 1st Apron, but if trading up hardcaps then there is no way Mavs can get over the 1st Apron w/o giving up another rotation piece.
This really complicates roster building.

[Scoot McGroot]

Can the Warriors aggregate Paul with Looney or GP, Kids etc - and then resign Klay and go back over the second apron? Or does the new rule hard cap once a team aggregates in a trade? That seems extreme.

But maybe it’s “over the apron including cap holds can’t aggregate” or such..

Random.

If GS aggregates Paul with Looney after the last day of this regular season, they would then be hard capped at the 2nd apron. If they salary matched at anything over 100% of a package in any trade they would be hard capped at the first apron. Etc.

Trading over 100% hardcaps at 1st Apron?

Yup. Really seems like the league made a workaround to make it very difficult to just endlessly add salary.

Man that's tough...
DAL is right at tax, with 12 players on payroll, I though TPMLE is going to DJJ and THJ expiring for larger contract and they operate over the 1st Apron, but if trading up hardcaps then there is no way Mavs can get over the 1st Apron w/o giving up another rotation piece.
This really complicates roster building.

Yeah, the real main way to jump over the aprons is for a team to basically re sign their own expiring players with large raises. If they aggregate two players together to return a higher salary, then they hardcap themselves at the second apron. Etc. It’s not going to be easy to just kind of keep adding on like it used to be.

[basketballwacko2]

The Celtics are in the running to make the Finals.

Sure but saying, "The owner is a Billionaire" is no reason to pay the tax, they are all billionaires.

Yeah, I left out some steps from the argument. I thought they would be obvious. My bad.

-- Businesses are meant to return money to their owners in two main kinds of ways. Either they actually pay out cash from earnings, or their overall value goes up and owners sell some or all of their equity.

-- Value of sports teams is based on their potential to make money, and also on whatever premium owners want to pay for the coolness of owning part of a sports team. Winning teams do better than losing teams in both of those respects.

-- Except in a few cases, which are concentrated in particularly small markets, owners are generally willing to pay for genuinely championship-contending teams.

-- I infer from that that there's a consensus -- right or wrong as the case may be -- that it's good business to spend money in that way. I'm guessing that the consensus is indeed correct.

-- However, if ownership has a difficult-to-resolve cash flow crunch, such spending could be restricted anyway.

-- I argued that the Celtics are unlikely to have a difficult-to-resolve cash flow crunch.

I agree with you that the Celtics won't trade Brown because of Luxury Tax and may be willing to go deeper in the tax to win.

[NYG]

So let's focus on Portland... what's their best shot at saving money?

[NYG]

Ayton for John Collins

John Collins $26,580,000
Jerami Grant $29,793,104
Anfernee Simons $25,892,857
Malcolm Brogdon $22,500,000
Robert Williams III $12,428,571
Matisse Thybulle $11,025,000
Scoot Henderson $10,259,160
Shaedon Sharpe $6,614,160
Kris Murray $2,990,040
Delano Banton $2,196,970
Jabari Walker $2,019,699
Toumani Camara $1,891,857
Duop Reath $1,891,857
Rayan Rupert $1,891,857
5th Overall Pick $8,328,120
14th Overall Pick $4,499,640

Eric Bledsoe Dead Cap $1,300,000
Didi Louzada Dead Cap $268,032

Total Salary $172,370,924
Cap Space -$30,370,924
Tax Space $229,076
1st Apron Space $7,229,076
2nd Apron Space $17,729,076

[Scoot McGroot]

So let's focus on Portland... what's their best shot at saving money?

The ability to use the non-taxpayer MLE and such as "TPE's" begins with this new league year. It'll be close, but I think RW3 would fit into that range, and Thybulle definitely should. I also imagine that 2 of their non-guaranteed guys will be released, as they'll simply need the roster spots to bring in their 2 1st round draft picks and a possible free agent signing to change the roster a bit. That clears around $4m. Could see a possible draft pick trade of the GS pick for a future 1st to push that salary allay out a bit? Otherwise, just salary imbalanced trades where Portland cuts a little bit in each trade.

Lots of options.

[Bentley1225]

I would expect Brogdon, Little & Reid to get dumped by their respective teams or dealt for smaller deals:

Brogdon to Raps for Boucher
Little + Cash + 2031 Suns 2nd to Pistons for 2031 Pistons 2nd (31-55 protected 2nd)
Reid to Wiz for 2024 1st from either OKC or LAC (Washington gets 2nd least favorable of Houston, Utah, OKC, LAC 1sts)

[NYG]

So let's focus on Portland... what's their best shot at saving money?

The ability to use the non-taxpayer MLE and such as "TPE's" begins with this new league year. It'll be close, but I think RW3 would fit into that range, and Thybulle definitely should. I also imagine that 2 of their non-guaranteed guys will be released, as they'll simply need the roster spots to bring in their 2 1st round draft picks and a possible free agent signing to change the roster a bit. That clears around $4m. Could see a possible draft pick trade of the GS pick for a future 1st to push that salary allay out a bit? Otherwise, just salary imbalanced trades where Portland cuts a little bit in each trade.

Lots of options.

Cutting Jabari Walker and Dalano Banton then trading Robert Williams III for Nick Richards and JT Thor gets them outright below the tax with a 15-man roster.

[ChettheJet]

Bulls aren't in great shape, but hands not tied

Lavine 2 more max years plus an option
Vucevic 2 more years
White 2 more low cost years
Dosunmu signed 2 more cheap years
Terry one more year picked up then TO
Phillips 2 more years TO


Ball a $21M option he takes back or not
Caruso non fully guaranteed they're paying him
Carter one more year then PO
Craig low PO
Taylor next year not guaranteed
Bitim just converted to full contract ? maybe guaranteed


DeRozan UFA
Drummond UFA
Williams RFA

1. resign Williams
2. what can they get S&T for DeRozan gotta move on
3. can they trade Lavine
4. can the trade Vucevic
5. what can they get for Caruso
6. does Drummond want to return
7. does Craig come back


questions after those
can Lonzo Ball ball
do Bitim, Phillips and Terry show enough the rest of the season to join Dosunmu, Carter and Craig as the bench next year
if they do trade just who do they get back

[NYG]

So let's focus on Portland... what's their best shot at saving money?

The ability to use the non-taxpayer MLE and such as "TPE's" begins with this new league year. It'll be close, but I think RW3 would fit into that range, and Thybulle definitely should. I also imagine that 2 of their non-guaranteed guys will be released, as they'll simply need the roster spots to bring in their 2 1st round draft picks and a possible free agent signing to change the roster a bit. That clears around $4m. Could see a possible draft pick trade of the GS pick for a future 1st to push that salary allay out a bit? Otherwise, just salary imbalanced trades where Portland cuts a little bit in each trade.

Lots of options.

Can Tax MLE and Cap Exceptions be used in trade?

[JRoy]

So let's focus on Portland... what's their best shot at saving money?

The ability to use the non-taxpayer MLE and such as "TPE's" begins with this new league year. It'll be close, but I think RW3 would fit into that range, and Thybulle definitely should. I also imagine that 2 of their non-guaranteed guys will be released, as they'll simply need the roster spots to bring in their 2 1st round draft picks and a possible free agent signing to change the roster a bit. That clears around $4m. Could see a possible draft pick trade of the GS pick for a future 1st to push that salary allay out a bit? Otherwise, just salary imbalanced trades where Portland cuts a little bit in each trade.

Lots of options.

Cutting Jabari Walker and Dalano Banton then trading Robert Williams III for Nick Richards and JT Thor gets them outright below the tax with a 15-man roster.

POR is unlikely to cut Walker.

[Scoot McGroot]

So let's focus on Portland... what's their best shot at saving money?

The ability to use the non-taxpayer MLE and such as "TPE's" begins with this new league year. It'll be close, but I think RW3 would fit into that range, and Thybulle definitely should. I also imagine that 2 of their non-guaranteed guys will be released, as they'll simply need the roster spots to bring in their 2 1st round draft picks and a possible free agent signing to change the roster a bit. That clears around $4m. Could see a possible draft pick trade of the GS pick for a future 1st to push that salary allay out a bit? Otherwise, just salary imbalanced trades where Portland cuts a little bit in each trade.

Lots of options.

Can Tax MLE and Cap Exceptions be used in trade?

Beginning with the 2024-25 Salary Cap Year, teams will be permitted to use the Non-Taxpayer Mid- Level Salary Exception, Mid-Level Salary Exception for Room Teams, or Bi- annual Exception to acquire one or more players by trade or waiver claim.

But remember, using these in trade will also hard cap teams at different salary levels. Use the non taxpayer MLE, and their hard capped at the first apron, use the room exception in trade then they’re locked out of other MLE’s, etc. I believe the taxpayer MLE is locked out of this, though.