Luxury tax...for Celtics luxury or not big deal

[DavorFanCroatia]

Hay, guys

Can someone tell me how rich are exactly Celtics owners?
How many money Celtics earns?
Will paying luxury tax will be something Celtics ownership will do gladly to have stable, year in year out contender?

thanks

[Fencer reregistered]

They're not terribly rich, but they can afford sensible luxury taxes.

Do recall that being over the luxury tax limit, besides costing the owners a lot of money, also has basketball consequences.

[cloverleaf]

Paying even a sizable luxury tax for a championship is a bargain.

Paying a big luxury tax for years without actually winning would be costly.

[Elrod is Back]

The issue with the luxury tax for the Cs is fairly important going forward. It is not like the Big Three era when the Cs went into luxury tax zone with a veteran team where the deals would expire in a couple of years. Paying luxury taxes for a few years of contention was no big deal. The problems the Cs face are threefold.

First, the taxes are higher in the new CBA.

Second, there is a "repeater" tax, so that if one pays the luxury tax three times in a period covering four years, the amount owed escalates considerably.

http://www.cbafaq.com/salarycap.htm (see questions 18 and 20)

In combination, the new CBA accomplishes a de facto hard cap, where teams have to really think twice about keeping rotation players at $10-15 million per year. This is why Marcus Smart presents a possible dilemma, and why it is unlikely that both Smart and Rozier will remain on the team in two years.

(From a fan's perspective, I think this sucks. Player turnover in the hard capped NFL has contributed to making the NFL considerably less interesting, unless you are lucky enough to be a Patriots or Packers of Steelers fan. It makes it harder to keep really great teams together and hence damages the quality of play. But that is an aside.)

Third, and specific to the Cs, Ainge has three max contract players now, two of whom are in their mid-20s, and two more possibly on the way in Brown and Tatum. The math gets insane when you start having four max guys, or five max or close-to-max guys. And there may be a couple of more lottery picks on the way in the next two or three drafts.

The trick for Ainge is to make this work. It is possible but there will be difficult choices. In the near-term two issues loom.

First, ideally the Cs stay out of the luxury tax in 2018-19 season, if only to delay the dreaded the repeater taxes by one season. It is possible, but if the LAL pick conveys, it means no MLE free agent in the summer of 2018. It also means there are limits to what Marcus can get paid, thought the Cs should be able to afford him. The luxury tax line for the 18-19 season is expected to be around $123 million.

http://www.basketballinsiders.com/boston-celtics-team-salary/

Second, in the best possible world, Horford opts out after the 18-19 season and negotiates a longer term deal that starts at $15-18 million per year, if he doesn't leave altogether. (I like Horford and want him to stay personally.) Then, especially if Kyrie takes a slight discount from the max total, the Cs might be able to stay out of the luxury tax in 19-20, because the tax line could go up to around $131 million.

https://www.whatsthecap.com/nba/salary-cap/

But by 2019 or 2020 at the latest the Cs will almost certainly enter luxury tax hell and remain there for the visible future, perhaps the entire decade. Unless Brown and Tatum both bomb and the coming lottery picks do not pan out as well, or Hayward and Irving sign elsewhere when they become free agents, and/or Danny avoids using the MLE indefinitely.

In my dream world we keep this core together and the 2020s is a magnificent decade to be a Cs fan.

One other note: the value of having first round picks is increasingly clear, as this can be quality cheap labor if successful draft picks are made. https://basketball.realgm.com/nba/draft/future_drafts/detailed

Finally, I think the Cs owners will pay the luxury tax for a contender, but this is not an especially wealthy group of owners who seem willing to take losses so they can be the heroes of New England. This adds to Danny's strategizing.

[Smitty731]

snip

The one thing to be clear on with the hard cap is that it only comes into play if a team does certain things:

1. Receives a player in a Sign and Trade
2. Uses to Bi-Annual Exception
3. Uses the Non-Taxpayer Mid-Level Exception in an amount greater than or equal to the Taxpayer Mid-Level Exception

[Captain_Caveman]

The new rules are extremely prohibitive for repeat offenders who are deep into the tax.

So yeah, there are some smaller system rules and tax penalties you incur if you are barely over the tax for a year or two, but the bigger issue is going DEEP into the tax, especially for longer than a year. This was a sneaky major factor in the Kyrie trade and subsequent dumping of Avery, IMO.

[Fencer reregistered]

snip

The one thing to be clear on with the hard cap is that it only comes into play if a team does certain things:

1. Receives a player in a Sign and Trade
2. Uses to Bi-Annual Exception
3. Uses the Non-Taxpayer Mid-Level Exception in an amount greater than or equal to the Taxpayer Mid-Level Exception

Or to reverse that -- if you want to have your salary level be particularly high, the above is a list of things that you must not do.

[sully00]

The owners have plenty of money more importantly they have plenty of investors so the risk spread out. The key is that if they are going to be tax payers they better be winners. The Celtics don't own their building so while they are extremely valuable franchise they have no property behind it.

Right now the team is 3rd in the NBA in attendance paying the tax isn't an issue, the rules that follow is the only concern. I feel like Wyc understands the finances of the NBA about as well as anyone and has spent some serious coin on some bad contracts to facilitate the building title contending teams.