What dictates Payroll?

Ruhiel · Post #1 » by **Ruhiel** » Wed Apr 20, 2011 12:46 am

How come the Lakers have such a high payroll ($90M)? Is it revenue based?

The reason I ask is because Hawks are a few pieces away and may lose Smith/Crawford...

HoopsGuru25 · Post #2 » by **HoopsGuru25** » Wed Apr 20, 2011 12:48 am

The Lakers pay the luxury tax....the Hawks don't.

evildallas · Post #3 » by **evildallas** » Wed Apr 20, 2011 2:38 am

Ruhiel wrote:How come the Lakers have such a high payroll ($90M)? Is it revenue based?

The reason I ask is because Hawks are a few pieces away and may lose Smith/Crawford...

To exceed the cap, it's a complicated process of using the MLE exception, Larry Bird rights, making large trade and trading expiring contracts for longer term contracts.

The MLE allows teams to spend about 5.8M more than the cap and you get it each year, so you can add those up (Artest was full MLE while Blake and Barnes add up to one MLE). Bird rights allows you to spend as much as needed exceeding the cap to resign a player. The amount is determined by league rules and previous salary. Large trades only have to match within 125% of salary amount which means if the deal includes a player like Shaq who was making 20M they could get back 25M in salary and be in compliance.

It takes years to build up a salary like that and a willingness to do so. The ASG operates the other way making absolutely sure they stay under the tax threshold by letting salaries expire and taking back the lower end or even on all trades and not spending the MLE.

Ruhiel · Post #4 » by **Ruhiel** » Wed Apr 20, 2011 4:45 am

evildallas wrote:
Ruhiel wrote:How come the Lakers have such a high payroll ($90M)? Is it revenue based?

The reason I ask is because Hawks are a few pieces away and may lose Smith/Crawford...

To exceed the cap, it's a complicated process of using the MLE exception, Larry Bird rights, making large trade and trading expiring contracts for longer term contracts.

The MLE allows teams to spend about 5.8M more than the cap and you get it each year, so you can add those up (Artest was full MLE while Blake and Barnes add up to one MLE). Bird rights allows you to spend as much as needed exceeding the cap to resign a player. The amount is determined by league rules and previous salary. Large trades only have to match within 125% of salary amount which means if the deal includes a player like Shaq who was making 20M they could get back 25M in salary and be in compliance.

It takes years to build up a salary like that and a willingness to do so. The ASG operates the other way making absolutely sure they stay under the tax threshold by letting salaries expire and taking back the lower end or even on all trades and not spending the MLE.

thanks, hopefully Hawks adjust and win the next game(s)