How would you go about minimizing the Lux Tax? (Mrgd)

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This thread is dedicated to the assumption that Washington does not want to pay the lux tax in 09/10 and going forward... That is the basic assumption. IT IS NOT UP FOR DEBATE IN THIS THREAD (I will put up a thread elsewhere so you can bitch/debate the matter, viewtopic.php?f=35&t=909127 ). So skip all the posts saying the ownership will eat the costs, as fans we don't care...

It can be expected that to reduce said tax, Washington will have to trade some assets. 1) What do you think are Washington's tradeable assets, and 2) in what order would you rank them (with what Washington values the most (ie wants to keep the most) being first and working down). 3) Reasons why you rank them this way, would be appreciated. 4) How high up the list do you think the team would have to move to get under the lux tax.

1) Gil Arenas - Youngish (27 - should just be hitting his prime) Franchise level guard if healthy, would be a cast iron bitch to trade given his contract and injury status. Also a longer term contract that will keep him in place while the youngsters develop, hopefully making a contending team somewhere around 2011-2012
2) Caron Butler - Good player, on a good contract. Less value to the Wizards than Gil, because a) he less talented, and b) he's only under contract to the 10/11 season, and may leave at that point.
3) Prospects (Mcgee, Blatche, Crittendon, Young, Pecherov) - These are the players from who will hopefully develop to work alongside Gil for a contending team...
4) Picks (#5 2009, future 1sts) - Giving away 1sts is almost always a bad idea; they are your silver lining against injury riddled seasons like the last one. The 09 5th pick should a) provide a useful player, and b) have enough time to develop to contribute significantly in the 2011-2012 timeframe...
5) Haywood - He's been a good center, but who knows if he fully recovers from injury in 09/10, and next year he is an FA. Will someone overpay him? He's also 30 this year. By 2011-12, he may be falling off.
6) Jamison - Most productive player last year (scoring). However, he's 33 this year, on a large and long contract, and isn't good defensively.
7) Expirings (Thomas, James, Mcguire) - These players are essentially null value on the court (and some have locker room black marks), as assets they are only valuable as expiring contracts.

My assessment of these assets is that 6) and 7) have no significant trade value (particularly in terms of salary in the 09/10 season). I thinks WAS would have to trade an asset from those I rank between 1 and 5 to achieve lux tax reduction. Trading higher value assets (2) might allow them to further set up for a run in the 2011-2012 timeframe.

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All right, this is the companion thread, to
viewtopic.php?f=35&t=909126
How would you go about minimizing the Lux Tax?

This is where you can debate my assumption that the Wizards would like to avoid paying the tax.

As far as justifying my assumption:

Yes, I have heard several people state that WAS is wiling to pay the lux tax as Pollin is getting old and wants to win before he dies. Why don't I believe this. Well, I have heard many franchises say they are willing to pay the lux tax for winning. Very few have followed through in any significant way. Those that have, have had certain characteristics that do not appear to apply in WAS.
1) Really Big Market, too the point where they don't care about the tax - NYK, LAL
2) Really Crazy Rich Owner, again too the point where they don't care about the tax - Paul Allen (Blazers back in the day), Cuban. Abe Pollin isn't in that league of rich. Also both the examples came back to earth (in terms of willingness to pay the tax) fairly quickly, when they didn't see a serious championship shot. WAS doesn't have that window until they get something to provide Dwight/Lebron level impact, IMO of course.
3) Had non-basketball commercial interests in a particular player that made economic sense. Recent examples are Cleveland, where keeping Lebron provides so much secondary merchandising income that it's worth going over the lux tax to keep him happy, and Houston, where Yao will never be traded, due to his merchandising (and other impact) from the Chinese market.
Given none of these apply, WAS may talk about eating the tax, but that's all I think it is. IMO they will be looking for a way to reduce their financial burden in 09/10 and beyond.

[nate33]

The best way the Wizards could shave salary would be to package the #5 with either Stevenson, James or Etan and trade down to a lower pick. Something like Stevenson + #5 to Toronto for the #9 could work if Toronto wants to move up to draft Harden. The Wizards would save $3.8M and $4.1M over the next two seasons by unloading Stevenson, and they'd save another $800K a year by picking four slots lower. Factor the luxtax savings, and it would save Abe $19M over two years. Similar deals can be worked out with Portland, Detroit or Dallas (involving Stackhouse) though the pick would end up being much lower.

They could also trade the #5 plus a crappy contract for a decent veteran with a similar salary. If they maximize the 125% exemption, they could save about $4-5M a year, mostly by not having to pay the #5 pick.

Another option would be to simply give Crittenton away to an under the cap team. Hopefully, they could attach somebody like Pecherov to him and save a bit more salary, either that or get back a future 2nd round pick.

Another, less desirable option would be to use Blatche as incentive to dump a bad contract (Etan, Stevenson or James). Attach Blatche to Etan or Stevenson and send him to an under-the-cap team for pure cap room. Either that or trade Blatche for a future first rounder.

Finally, if Jamison could be traded for an expiring contract, particularly one that's a bit cheaper, then it's worth consideration. Cleveland seems to be the best option (assuming they lose to Orlando). They have Wallace's EC as filler. Cleveland would have to throw in a bit more (or absorb a bad contract) because the Wizards wouldn't trade Jamison straight up for Wallace.

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So. Nate33 would rank only 4 options (with #1 being the least desirable for WAS)

1) Trade Jamison
2) Trade Blatche
3) Give away Crittendon and Pecherov as a pair
4) Move the #5

I'm not quite sure if I have summarized correctly - I'm not quite sure you think Trading Jamison is your least palatable option. Also, could you clarify if you think Pecherov is not a positive on his own - from his stats he's decently productive, and he's not being paid a lot. Why do you see a need to attach him to Crittendon to move him?

[nate33]

So. Nate33 would rank only 4 options (with #1 being the least desirable for WAS)

1) Trade Jamison
2) Trade Blatche
3) Give away Crittendon and Pecherov as a pair
4) Move the #5

I'm not quite sure if I have summarized correctly - I'm not quite sure you think Trading Jamison is your least palatable option. Also, could you clarify if you think Pecherov is not a positive on his own - from his stats he's decently productive, and he's not being paid a lot. Why do you see a need to attach him to Crittendon to move him?

You have the order right. Though when you say "move the #5", I'm not talking about trading completely out of the draft. I'd prefer to trade to the lower half of the lottery. The guys available at #5 (Hill, DeRozan, Hardin) won't help the team in the short or intermediate term (well, except Hardin). There are guys available later in the lottery who interest us just as much (Curry, Evans, Blair) so the trade down isn't viewed as a serious sacrifice. I'd be much more hesitant to trade out of the lottery completely.

The main thing about trading the pick is that it's an easy way to shed salary. Any team can absorb the pick without needing raw cap space to make the trade. So even if Toronto wasn't willing to use their raw cap space, a similar trade can be made with other teams where we swap expiring contracts, utilize the 125% Exemption to it's full extent, and then swap picks. Something like Etan + James + Pecherov + #5 for Hughes + #8 saves us $2.5M (doubled because of the luxtax) while landing us a competent starting SG. New York sacrifices no 2010 cap space to move up 3 spots. This is the kind of deal that makes sense if we think the guy we want will still be on the board at #8.

As far a Pecherov goes, the guy has played 3 seasons and still can't get off the bench. His per minute numbers are interesting enough that another team might be willing to try him out, but it's not like anybody is knocking on our door begging for us to trade him. So, yeah, we might be able to unload him without attaching him to Crittenton. The hard part is convince one of the few under-the-cap teams to do it.

[verbal8]

I think trading Jamison is probably the most likely effective way to lower the salary/luxury tax. I think finding a way to dump Etan/Mike James is the next most likely scenario.

With the pick if they could trade down and get a pick next year, that could work both basketball-wise and financially.

[hands11]

Interesting topic but I think the reason it hasn't had it's own thread is because this isn't the main goal.

The main goal is fielding the best team for next year while secondly balancing what is best for the future. Since Abe is allowing EG to go over the cap this year ( we still don't know how much he will allow ) getting under the cap this year isn't the primary concern. Plus, depending on who the team gets sold to, we may not even have to worry about the cap for a year or so after that. I know it's a foreign concept to us as Wiz fans but the cap(s) doesn't have to be a major concern. At least not in the short term.

There are two main windows to do get or move players to do this balancing act.

1 - Draft Day
2 - Trade some players during the season
3 - Wait till the end of the season when Etan $7,350,000, Mike James 6,466,600 come off the books
That's 14M right there.
* Dixon $998,398 is coming off the books this year.

The cap for this year isn't likely to go down much. Maybe 1M so put it at 70M
http://www.cleveland.com/cavs/index.ssf ... ankru.html

That puts up in the 10M in tax range plus what we loose by not getting money from teams that are over. Not great but lots of top teams were in this boat this year. The real projected hit comes in 2010/11 - Looks like that FA market isn't going to be a nice as some has hoped. A lot of those players will take the larger contracts to stay home as the cap tightens.

But lots of good team have been over the cap in the past.
http://members.cox.net/lmcoon/salarycap.htm

See 2007/08 - Knicks ($19.7), Mavs ($19.6), Cavs ($14.0), Nuggets ($13.6), Heat ($8.3), Celtics ($8.2), Lakers ($5.1), Suns ($3.9)

http://nba.fanhouse.com/2009/02/16/how- ... nba-teams/

Three of the 4 conference finalist in the 08/09 season are on this list.

Wiz 2010/11 Salaries are at 53,881,676 Lux Cap yet to be determined but lets say 65M

In a tighter market, Haywood may only get 8M and DMAC gets 1.5M That puts us at 64M ish plus draft picks if we keep any of the picks. That isn't bad.

( Note - By the end of this next season 2009/10, we will be evaluating how this roster is filled and looking at our star players. If it is going to happen, the package of CB or AJ or both will be put on the table to get one star - Wade, etc who has more then either individually. This is big year for CB.

So while the cap is always something to watch, it isn't the most important thing if your looking to build a winner first and foremost.

My dream....we find a way to get Rasheed for a year or two. Detroit is done.
http://sports.espn.go.com/nba/news/stor ... ions09/nba

This article has him projected to go to Philly or Boston. If we are lucky, EG finds a way to bring him home on the cheap selling him on a title run under Flip. He is exactly what this team is missing. He is a experienced starting PF who is tough and has range who have been to the top and wants to get back there again before it is over. Just the kind of guy we need to battle the best in the league in the finals. He would fit nicely with Haywood and he could teach AB and McGee a thing or two about being a star NBA player in the post.

Haywood/AB/McGee
R Wallace/DSong/AB
AJ/DMAC
CB/NY
GA/Crit

That team could do some damage.

DS - retires because of injury or if he recovers, he could be useful as that extra SG 3 shooter.
Etan moved somehow
James - not sure how we get rid of him.
OP
Draft pick.

Maybe some how all this is put together and made into something.

Then turn maybe CB and AJ into Wade in 2010/11

Haywood/McGee
R Wallace/DSong
AB/DMAC
Wade/NY
GA/Crit

Other nice reference. Important dates
http://members.cox.net/lmcoon/salarycap.htm#Q98

[tlifeset]

Let's be honest here ... everyone's ideas have merit ... but the real problem is that nobody is looking for a salary dump with the current economic impact on the NBA. Compound that with the fact that everybody is trying to clear cap space for the 2010 FA class, and it makes your salary dump ideas near impossible.

I think somebody brought it up in one of their posts, but the team I would be targeting would be the Cleveland Cavaliers. They are desperate, have no tradeable assets except ECs and have to make a move this offseason as it is their last shot to retain Lebron. People are saying that Ben Wallace might retire with a buy out, so perhaps it's something as simple as Jamison for Wallace (haven't checked salaries, but they're probably close).

Another idea I was cooking up in my head, but I haven't really thought about the salary implications is a three way deal between Memphis, NYK and the Wiz. The principals of the deal would be NYK trading up to the #2 spot to get Rubio, Memphis getting the NYK pick, WASH pick and Jamison and David Lee coming over to Washington in an S&T. Obviously, Lee would come at a price tag far less than Jamison but give you the defense and energy that your front court needs. Memphis can absorb the Jamison contract because they're under the cap. Plus, it's pretty clear that Rubio won't come to Memphis. And they get two picks in the top 10. NYK gets their euro Nash for Dantoni's run-n-gun offense.

Thoughts?

[tlifeset]

Looking at that deal now ... WASH could probably get one of Memphis' young players in the deal (Darrell Arthur) as well? Or maybe another pick?