MLE counting against the cap, and such

[Garf]

1. http://www.cbafaq.com/salarycap.htm#Q26, first sentence:

If a team is below the cap, then its Disabled Player, Bi-Annual, Mid-Level (either the Taxpayer or Non-Taxpayer Mid-Level, whichever applies to the team) and/or trade exceptions are added to their team salary, and the league treats the team as though they are over the cap.

Could anybody describe an example where a team is below the cap, yet a Taxpayer? I don't understand how this is possible.


2. Trying to convert Q21 and Q26 to a single formula. Are the following statements correct?

A: If all active salaries plus waived salaries plus BAE plus DPE plus trade exceptions plus 5M > taxline + apron => you have either 3.09 or what fits under taxline + apron (whichever is greater).

Plus, B: If all active salaries plus waived salaries plus BAE plus DPE plus trade exceptions plus MLE already spent > taxline => you have 3.09M.

C: Otherwise, you have 5M.

(By condition B, I mean a situation in which e.g. you have already spent 2.5M of MLE and that puts everything together at 71M. Although the full 5M would fit under the apron, the sheer fact that you're already above the taxline makes you a Taxpayer and thus limits your MLE to "mini". Correct?)

(This also includes the possibility that you can give away the 5M MLE or the BAE and still become a Taxpayer later, as long as you're below the apron. Correct?)

Thanks in advance

[Garf]

3. (Spin-off of 1?) Is a team with 50M in salaries and a 30M trade exception a Taxpayer?

4. Is a team with unused MLE where everything else adds up to 68M a Taxpayer? Does mini MLE apply?

[Garf]

5. I think I have already found one mistake in my reasoning: I should count the entire exceptions against the cap when deciding if a team is below the cap, but I should only count the used parts of the exceptions when deciding the total salary, correct?

[answerthink]

1. The FAQ wording paraphrases the wording of the CBA. To satisfy your request for an example though, off the top of my head at 4:45 in the morning, several could be produced which rely upon the fact that the team salary calculation used to determine whether a team is below the salary cap is different than that used to determine for which MLE a team is eligible. See Q14 for more details.

2. Your scenarios are not as accurate nor as all-encompassing as is described in the answer to Q26. I would suggest you think about things in the way the FAQ describes.

3.

Is a team with 50M in salaries and a 30M trade exception a Taxpayer?

I am not sure what you mean by “Taxpayer” but such a team wouldn’t owe any luxury tax, and its team salary used to determine for which MLE it would be eligible would not include the trade exception.

4. Two-part question:

Is a team with unused MLE where everything else adds up to 68M a Taxpayer?

I am not sure what you mean by “Taxpayer” but such a team wouldn’t owe any luxury tax.

Does mini MLE apply?

Only the Non-Taxpayer MLE would be available to such a team, but if in using the Non-Taxpayer MLE the team does not exceed the constraints of the Taxpayer MLE, then the team can later exceed the apron and it will be deemed to have used the Taxpayer MLE.

5. If a team has used part of an exception to acquire a player, then the salary of the acquired player is added to team salary. The unused portion of an exception is added to team salary if applicable.

Good night. Good luck. And go Heat.

[Garf]

3.

Is a team with 50M in salaries and a 30M trade exception a Taxpayer?

I am not sure what you mean by “Taxpayer” but such a team wouldn’t owe any luxury tax, and its team salary used to determine for which MLE it would be eligible would not include the trade exception.

First off, big thanks for spending your time fighting the limitations of my brain at 4:45am

I'm still lost, and I think it revolves around the seemingly simple question 3 above.

From the start though:

Q15 says team payroll is basically active salaries plus waived salaries.

Q1 strongly suggests being under/over the cap is decided by the team payroll. So far so good.

Q14 says:
The following are included in team salary:
A cap hold for the combined amount of any Mid-Level, Bi-Annual, Disabled Player and trade exceptions available to the team, if the team is under the salary cap.

Q26 confirms:
If a team is already over the cap, then the exceptions are not added to their team salary.

Q21 provides the luxury tax definition:
The luxury tax [...] is paid by high spending teams -- those with a team salary exceeding a predetermined tax level.

So to my understanding, our team has a payroll of 50M, yet a team salary of 80M (because the team is under the cap, thus the unused trade exception adds to the team salary), and thus owes luxury tax.

So I still need to find out where I'm wrong

[DBoys]

So to my understanding, our team has a payroll of 50M, yet a team salary of 80M (because the team is under the cap, thus the unused trade exception adds to the team salary), and thus owes luxury tax.

So I still need to find out where I'm wrong

Team Salary is somewhat of a theoretical number that includes both the payroll you are already paying, plus exceptions that will allow you to increase that payroll if you wish. You pay tax on actual payroll*, not on Team Salary, because until and unless you use those exceptions, you haven't actually increased your spending.

Being under/over the cap is determined by Team Salary, not by actual payroll.


* A team's actual "payroll" consists of the total of the full year contracts paid to players who are on that team at the end of the season, even if they acquired some of them in trade and didn't actually pay that whole amount. There can also be a few minor adjustments, such as the pay for waived player salaries, plus a few other minor possibilities. But it's essentially paid salary, not exceptions as well, that determines the amount of a team's tax bill (if any).

[answerthink]

Let’s take things a bit slowly in case it helps…

The NBA has a soft salary cap. A team’s “team salary” may not exceed the salary cap unless it is using an exception. “Team salary” is defined, in summary form, at the top of Q14.

Some of the things that are included in “team salary” are only included at certain times or in certain cases. For example, the Disabled Player, Bi-Annual, Mid-Level (either the Taxpayer or Non-Taxpayer Mid-Level, whichever the team is eligible to use) and trade exceptions are only included if, when excluding them, the team would be under the salary cap and, when including them, the team would be over the salary cap.

This is where things start to get a bit confusing.

“Team salary” is defined differently for a few specific purposes:

For determining whether a team is eligible for the Bi-Annual, Non-Taxpayer Mid-Level, and Taxpayer Mid-Level exceptions, and for Sign-and-Trade transactions, they use a team salary calculation that is described in the middle of Q14.

For determining the amount of tax a team owes, they use a team salary calculation that is described in Q21. In this definition, although it is not specifically mentioned in the FAQ, cap holds and exceptions are always excluded.

For determining whether a team has met its minimum team salary requirements, they use a team salary calculation that is described in Q15. The FAQ refers to this calculation as “team payroll.”

So… when you have a question, the best thing to do is to determine what you’re truly asking. That should tell you which definition of “team salary” to use. And that, in turn, should help you get your answer.

[Garf]

Thanks guys!

I'm not going to pretend I understand it all now, but here's the simplification I'm going to apply until somebody shows me how very wrong it is:

• - All active and waived salaries add up to the payroll.
• - This payroll decides if the team owes luxury tax and which MLE applies.
• - All unused exceptions are added to this payroll to decide if the team has cap space to sign FA's.

In practice, it looks like this:
https://docs.google.com/spreadsheet/pub ... T1E#gid=29