Fire Sale

[fienX420]

With the cap and luxury tax thresh-hold significantly declining for 2010-11, I think we may have no choice but to look to trade Murphy, Dunleavy, Ford, Tinsley, and/or Foster for expiring contracts. Pretty much anybody a team is willing to take (so probably not Tinlsey), we will have to lose for little in return. Maybe the Simons can buck up for one more year and wait till these deals expire, but the cost is going to be significant. If we are forced to shed salary, I think our ability to compete for the playoffs this season and next is going to be significantly compromised. And without maintaining ties to these players with the chance to bring them back at much cheaper salaries as long-term rotation veterans (particularly Murphy and Dunleavy), I think our ability to compete in the future will also be compromised (unless some serious star-level production emerges from Rush, Hibbert, and Hansbrough).

[basketballwacko2]

I would not call it a fire sale the main thing we need is to move Jamaal. Dunleavy isn't going anywhere until he is healthy and playing again, so deadline Feb 2010 maybe, I could see TJ Trade to make room for Jack but where and for what, Foster has value, I'm still thinking a deal with the Rockets could be done for McGrady. Jamaal, TJ and Foster for McGrady and Brooks, I'd give them a protected #1 if they'd kick in Landry!

[granger05]

I don't know that any of those names would really constitute a "FIRE SALE" in my mind. No matter what the cap is I'm sure they can be had and that's been the case for the last year. Dunleavy is hurt, and Ford has injury concerns. Tinsley is whatever he is. That pretty much leaves Murphy as the most likely to go. I like Murphy fine, but I think his offensive effectiveness is offset by his defensive liabilities so I don't think jettisoning him necessarily sets back the franchise.

[8305]

I agree the problem appears to be looming. But if I read it correctly, luxury tax isn't calculated until the end of the year. I think that would mean we have a 1 1/2 years to address the problem. Alot can happen in that time.

Hansbrough and McRoberts play has been encouraging. If one or both evolve into competent players Foster could become expendable and he's a pretty movable player. TJ could also elect out of his contract next summer eliminating the problem. I think if luxury tax is avoided this year the problem could be managed without that much problem next summer.

[granger05]

I doubt Ford opts out, but who knows. If none of the big dogs end up switching teams then maybe guys like TJ can suddenly capitalize on all that cap space. Maybe he doesn't get a deal worth any more than 8.5 mil, but he gets locked into a nice chunk of change for a few more years. I guess it's not impossible.

[fienX420]

I think we take a huge step backwards if we lose Murphy or Dunleavy without bringing back something significant. I guess the best hope is that the Simons tough it out until our big contracts expire, at which point, some responsible financial planning can commence.

[mizzoupacers]

Like the rest of you, I've read that the luxury tax threshold is supposedly going to be lower next year than it is this year...but I'm not sure I understand the logic behind that projection. Because revenues are expected to fall? They fell this last year, and the luxury tax threshold did not go down.

Until someone explains it better, I'm assuming that the projection for next year's luxury threshold is only speculation that may or may not come true.

It's not hard to see why the Pacers would be worried about next year, though--of the guys currently signed, only Diener's contract expires next summer, and a lot of the other contracts will increase a year from now. Why can't Stern bring back the amnesty rule like he did a few years ago? Sure would be nice to get a mulligan on Tinsley.

[cdash]

Guys, just because the lowering of the salary cap/luxury tax is new news to us, it doesn't mean that TPTB aren't prepared for it. It is a virtual certainty that we will pay the tax next year. Bird has a plan, he is sticking to it. He isn't going to gut the roster to get under the tax. In the long run, that wouldn't help us.

If you really want an expert take on it, ask count. He is extremely knowledgeable of the salary cap/lux tax.

[DWCP2]

I don't see the firesale occuring till this time next year. The thing to keep in mind is that because the luxury tax is 69.92 million this year and a team has 72 million in salaries doesn't mean that they pay the tax at the start of the season, they have until the trade deadline in February to clear 3 million.

[fienX420]

Who says that giving away a veteran for financial relief isn't part of 'the plan?'

[fienX420]

Again, the issue is that the luxury tax thresh-hold will only be $61 to $65 million for 2010-11, and we are likely to be over by a good chunk... a good chunk that will be hard to shed... and a good chunk that would likely be an important veteran. And in addition to paying the tax, you don't receive a part of the reallocation of tax proceeds. And, I'd have to imagine, that by showing you are willing to pay the tax, you may be less eligible to receive hand-outs from the NBA given to lower revenue teams. It's a one year hurt (for us) - but it's a big hurt.

[Scoot McGroot]

With the cap and luxury tax thresh-hold significantly declining for 2010-11, I think we may have no choice but to look to trade Murphy, Dunleavy, Ford, Tinsley, and/or Foster for expiring contracts. Pretty much anybody a team is willing to take (so probably not Tinlsey), we will have to lose for little in return. Maybe the Simons can buck up for one more year and wait till these deals expire, but the cost is going to be significant. If we are forced to shed salary, I think our ability to compete for the playoffs this season and next is going to be significantly compromised. And without maintaining ties to these players with the chance to bring them back at much cheaper salaries as long-term rotation veterans (particularly Murphy and Dunleavy), I think our ability to compete in the future will also be compromised (unless some serious star-level production emerges from Rush, Hibbert, and Hansbrough).

Who the hell do you think is going to eat our contracts and give us expiring contracts going into the summer of 2010? The so called "summer bonanza" of LeBron, Wade, and Bosh? So many other teams are fighting to get cap space that summer, and the other teams don't have expirings or TPE's to use. Do you really think a team would try and sell it's fanbase on giving up on LeBron for Mike Dunleavy? Or Troy Murphy? Or Jeff Foster? You know the answer to that is no.

[fienX420]

Regardless of the amount of cap space, plenty of teams are not in the running for the big time free agents. And such a potential move might not come until next summer. Teams will have saved up cap space, but not landed a big fish, and may be willing to absorb some extra salary at that point. Personally, I don't want to see us dump any of our players (with the possible exception of TJ). But I'm not sure we have that option. I'm really not sure what happens if dumping some salary doesn't happen and we take a huge financial loss. Obviously, worse case scenarios include the team being sold or moved. And that's something I really don't want to see. If our hand is forced by financial necessity, I'm pretty sure we could move Murphy and/or Foster and a 1st round pick or two for essentially nothing in return - even in the 'Summer of LeBron.'

Here's hoping for miracles, like Tinsley somehow not counting on the cap... hasn't played in requisite amount of time for medical reimbursement/exception, etc... can psychological reasons count? "Our doctors say he is unfit to play." Or more likely, let's hope the Simons can take an even bigger kick in the nuts for one season with the promise of a way lower payroll going into the future.

[basketballwacko2]

Guys, just because the lowering of the salary cap/luxury tax is new news to us, it doesn't mean that TPTB aren't prepared for it. It is a virtual certainty that we will pay the tax next year. Bird has a plan, he is sticking to it. He isn't going to gut the roster to get under the tax. In the long run, that wouldn't help us.

If you really want an expert take on it, ask count. He is extremely knowledgeable of the salary cap/lux tax.

I can't see the Pacers paying Luxury Tax. If we do let's say we're $5 million over. Lux tax is $5 million and we lose out of the rebate whick could be $2 to $3 million it costs us $8 million to be over. We have to be under the tax level unless we're going to the finals!

[fienX420]

That's the kind of thinking that would lead us to pay people off with draft picks to take our valuable veterans. We are definitely going to be over the luxury tax.

[Scoot McGroot]

Regardless of the amount of cap space, plenty of teams are not in the running for the big time free agents. And such a potential move might not come until next summer. Teams will have saved up cap space, but not landed a big fish, and may be willing to absorb some extra salary at that point. Personally, I don't want to see us dump any of our players (with the possible exception of TJ). But I'm not sure we have that option. I'm really not sure what happens if dumping some salary doesn't happen and we take a huge financial loss. Obviously, worse case scenarios include the team being sold or moved. And that's something I really don't want to see. If our hand is forced by financial necessity, I'm pretty sure we could move Murphy and/or Foster and a 1st round pick or two for essentially nothing in return - even in the 'Summer of LeBron.'

Here's hoping for miracles, like Tinsley somehow not counting on the cap... hasn't played in requisite amount of time for medical reimbursement/exception, etc... can psychological reasons count? "Our doctors say he is unfit to play." Or more likely, let's hope the Simons can take an even bigger kick in the nuts for one season with the promise of a way lower payroll going into the future.

Obviously, 99% of teams aren't getting LeBron, Wade, or Bosh to switch teams, but I'm sure that with almost all of the other teams facing luxury tax issues, teams can probably do a lot better in absorbing contracts with their cap space in a trade than Dunleavy, Murphy, and Foster. The 3 have some value, but not a whole lot.


Basically, you want to move Dunleavy, Murphy, or Foster for expirings to get under the cap? You're looking at using up either a 1st rounder or two just to move one contract, or Rush or Hansbrough.


You interested? I highly doubt management is. We've paid the luxury tax before. Hell, we weren't even competing for a championship those 2 or 3 years. We were just barely making the playoffs. If we have to, and it's an unavoidable fact, we're going to just have to suck it up and lose out.




Plus, if 20 teams are paying the luxury tax, that means that we're not too hosed. In redistribution of the luxury tax money, the total luxury tax that the league receives is divided up in 30 shares, and only the teams under the luxury tax receive their 1/30th share. So, say something like $150 million is collected (which could be with one or two heavy tax payers like Dallas, and then a whole bunch of small taxpayers) and only 10 teams were under the luxury tax, those 10 teams would each get $5 million in the original distribution of luxury tax payments. The remaining $100 million is then split into 30 shares again, and spread out amongst the league again. Thus, the Pacers could still get $3.3 million in luxury tax repayments, thus possibly making up a good portion of what they've paid in.


Obviously, if there are more than 10 teams able to squeak in under the luxury tax level next year, then these numbers all shrink. However, it's not the worst thing on Earth for Indy. Obviously not optimal, but if we have to live with it, then we can live with it.

[cdash]

Who says that giving away a veteran for financial relief isn't part of 'the plan?'

Thomas Paine.

[Boneman2]

we don't need to get screwed if we decide to trade anybody. Murphy and Foster both have decent value, especially to a contender before the deadline. Dunleavy on the other hand still has value, but it's not high enough, so we just wait.

I can't fathom the notion of trading away a future first in order to trade Foster, Murphy, Dunleavy or Ford. Let alone give up Rush or Hansbrough. What a silly statement.

[Scoot McGroot]

I can't fathom the notion of trading away a future first in order to trade Foster, Murphy, Dunleavy or Ford. Let alone give up Rush or Hansbrough. What a silly statement.

Not silly at all. Realistic. Wanna know why?


Not only are you looking at trading a guy for his value where normally, Foster, Murphy, and possibly Dunleavy could have some to solid value, but you're trying to convince another team to take on their salary, AND pay luxury tax on their salary due to a steeply declining luxury tax. Foster at $6 million? Not too bad. Foster at $12 million? Seriously, that's WAY too expensive. Murphy for over $20 million after the luxury tax? No way.


This isn't straight talent we're looking at. This is a completely economic issue that needs to be examined. We're going to have to pay with assets that convinces another team to pay up to $20 million for one year of Troy Murphy. And that would probably take a solid young player or a 1st round pick.

[fienX420]

Hey, I've said I don't want to dump a contract. I'm also in favor of paying the tax for one year. But do I think that's what we're going to do? I have no idea. Would I pay an extra $10 million to keep a player I like in Foster or Murphy in a year where we aren't a contender? Probably not. Even if you're a billionaire, that is a lot of money. Are the Simons OK with paying it? I hope so.