Suspensions and cap/tax numbers

[FGump]

What cap/tax adjustments are made with regards to suspensions?

a. Coon says cap is reduced by 50% of the suspended salary if it's a league suspension. Where in the CBA can I find the specifics that outline such an adjustment?

b. is there a similar reduction for tax purposes, or is that be calculated differently?

[Dunkenstein]

I asked a team exec a similar question about Arenas's suspension and its effect on the Wizards' team salary and the luxury tax. Here's what he wrote me:

"Arenas' cap number will not change for trade purposes nor for Team Salary
purposes. Suspensions do not have an impact on either.

"However, league office suspensions do have an impact on taxable salary for
determinations of over/under the tax and Team Payments of tax obligations.
If you assume that the Wizards will not make the playoffs, then the games
missed due to suspension for the remainder of the Regular Season would be 50 I believe. It would result in a reduction in Taxable Salary by $3,680,018."

Larry wrote in his blog for the NY Times that "When calculating the Wizards’ tax bill, the accountants will subtract 1/220th of Arenas’s annual salary for each missed game. If Arenas’s suspension lasts the remainder of the season, the Wizards will save about $3.68 million on their tax bill."

http://offthedribble.blogs.nytimes.com/ ... o-wizards/

Hope this is of some help answering your query.

[FGump]

Thanks much.

[lakerfan10770]

I was wondering where the 1/220th number comes from. I see on Larry's site (#95) where he mentions that 1/90th of a players salary is reduced for every game suspended, but I didn't see any mention of the 1/220th amount. I am trying to calculate two things, Arenas actual salary for 2009/2010 season and the Wizards salary cap number as it pertains to the lux tax (although this number has pretty much already been calculated).

[lakerfan10770]

Ok, so I did a little math using the 1/90th and 1/220th calculations and here is what I came up with:

Gilbert Arenas was suspended 50 games and thus will make $7,196,480 this season, which means he lost $8,995,600 in salary. Calculation = ($16,192,080/90) * 50 = $8,995,600

Washington can deduct $3,680,018 of Arenas' salary from their salary cap for Luxury Tax purposes. Calculation = ($16,192,080/220) * 50 = $3,680,018.


Javaris Crittenton was suspended for 38 games and thus will make $853,909, which means he lost $624,011 in salary. Calculation = ($1,477,920/90) * 38 = $624,011

Washington can deduct $255,277 of Crittenton's salary from their salary cap for Luxury Tax purposes. Calculation = ($1,477,920/220) * 38 = $255,277.

Let me know if this seems right, thanks.

[Dunkenstein]

I was wondering where the 1/220th number comes from. I see on Larry's site (#95) where he mentions that 1/90th of a players salary is reduced for every game suspended, but I didn't see any mention of the 1/220th amount. I am trying to calculate two things, Arenas actual salary for 2009/2010 season and the Wizards salary cap number as it pertains to the lux tax (although this number has pretty much already been calculated).

According to an email I just got from Larry: "I was told that the per-game deduction for a suspension is 1/110 of the annual salary. Since 50% of it isn't taxed in a league suspension, that leaves 1/220."

110 games is the maximum number of games a player can play: 82 regular season games plus 28 playoff games.

[lakerfan10770]

I was wondering where the 1/220th number comes from. I see on Larry's site (#95) where he mentions that 1/90th of a players salary is reduced for every game suspended, but I didn't see any mention of the 1/220th amount. I am trying to calculate two things, Arenas actual salary for 2009/2010 season and the Wizards salary cap number as it pertains to the lux tax (although this number has pretty much already been calculated).

According to an email I just got from Larry: "I was told that the per-game deduction for a suspension is 1/110 of the annual salary. Since 50% of it isn't taxed in a league suspension, that leaves 1/220."

110 games is the maximum number of games a player can play: 82 regular season games plus 28 playoff games.

Cool, thanks. It seemed like a pretty random number to use. It does reduce the amount of savings that a team could get from a suspended player, which totally seems like something the league would do.

BTW, It's not a lot of money, but I was going through the transactions list and it seems that 3 other teams (HOU, PHO, DEN) should get some lux tax savings, Trevor Ariza was suspended 1 game, JR Smith was suspended 7 games & Jason Richardson 2 games.

[Dunkenstein]

Don't forget Rashard Lewis's 10 game suspension at the beginning of the season.

[FGump]

The 110-game pro-rating is straight from the CBA, and then it further says to take 50% of the prorated amount, making it 1/220th for EVERY game missed (including playoffs). I finally found the exact chapter and verse in the CBA after we had the exchange above, and I'd give it to you but unfortunately I don't have time to look for it again right now.

Dunk, the 110 is not derived by the formula you gave, inasmuch as it also includes preseason games if I recall the wording correctly.

Also, there may be a minimum number of games being suspended (5, maybe?????) before the tax reduction is applied. Check the wording when you find it.

[lakerfan10770]

Don't forget Rashard Lewis's 10 game suspension at the beginning of the season.

Oh yeah, forgot about that one. I was going through NBA.com's transactions list, which is not always complete. And IIRC, Rashard's suspension was announced early last summer, which would not have made the current list they have posted.

[Dunkenstein]

Art V1, Sect 1 states "In addition to any other rights a Team or the NBA may have by contract (including but not limited to the rights set forth in paragraphs 9 and 16 of the Uniform Player Contract) or by law, when a player fails or refuses, without proper and reasonable cause or excuse, to render the services required by a Player Contract or this Agreement, or when a player is, for proper cause, suspended by his Team or the NBA in accordance with the terms of such Contract or this Agreement, the Current Base Compensation payable to the player for the year of the Contract during which such refusal or failure and/or suspension occurs may be reduced (or, in the case of a suspension, shall be reduced) by 1/110th of the player’s Base Compensation for each missed Exhibition, Regular Season or Playoff game."

It does not, however, say what formula is used to derive the 110. So until proven otherwise, I'm sticking with my theory.

[daddyfivestar]

So if Washington miraculously made the playoffs, they'd get even more tax savings by being able to count those as missed games for Gil and Critt?