Salary Cap Management - 2015 and beyond

#1
I know this stuff is scattered through a number of threads, and everyone is worrying about what is happening this year and our luxury tax possibility and stretch provisions, etc.

I think we need to take a second and examine where this team is actually at from a Cap perspective. (From HoopsHype)



Even if we have to pay a small luxury tax this season, we are in a great position for next year. We can do a number of things, including re-sign Gay, sign a big FA, trade this year for more salary over the next couple years (this is probably the most realistic).

I don't see us using the stretch provision at all to possibly add cap salary number to the next two-three seasons.
 
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#2
Nice post. I think it's key to note that this year's tax line is $76.829 million. (see here http://www.nba.com/2014/news/07/09/salary-cap-increases/)

Should also note that those numbers differ from Sham's current chart, which I generally trust the most on these issues (http://data.shamsports.com/content/pages/data/salaries/kings.jsp). One thing I notice first is Cousins salary, which I think Sham correctly has higher because his salary is based on a percentage of this season's cap, which likely went up more than the page above predicted.

While the tax is based on end of year salaries, which means they'd still have time to make moves during the season to get under the line if signing Casspi or some subsequent trade takes them over it, my reading of the stretch provision is that you need to use it by the end of August for it to "stretch" that next season's salary, so they may have to decide whether to stretch Terry or Ellington sooner rather than later. (http://www.cbafaq.com/salarycap.htm#Q65) With that in mind, I could see them using it now to keep options open trade wise for the rest of 2014-15, given that the added salary cap hit over the next two seasons would be relatively small.

Paying the tax wouldn't be the end of the world, of course. But as I think Capt has pointed out before, you raise the risk of later facing the more stringent "repeater" tax penalties, which could kick in if/when they want/need to pay the tax in a couple years when the team is actually contending.
 
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#4
I am reposting to this thread as its more relevant
Here is my math
13 players incl Acy per ShamSports 75,852,705
Less Outlaw and Acy (3,915,243)
Ellington 2,771,000
Casspi 943,000
Moreland 507,000
So I get 14 Players 76,158,462 Under the 76.8 Mil Limit

So if they want Twill vs Ellington , then yeah you have to stretch
I suppose that would get you Plus 950k for Twill Less 1,847,000 cap saved on the stretch
so maybe they want to be at 75,261,462 to have a safety margin of 1.5 mil on a future trade?

These numbers are close to Sactown Royalty
So they would have 13 players and 2.5 mil under linit
Or if Twill gets signed the maybe 1.5 mil under

Either way Im good with this roster and flexability until hopefully the next big trade comes along no later than Feb?
For hopefully a 10-15 mil impact player
 
#5
They only have to stretch if they don't want to pay a minuscule amount of Tax (in your scenario). I think stretching is a bad idea and I think that ownership is willing to eat a small amount (as a percentage) this year in tax to have more flexibility next 2-3 years. Hell they BEGGED Rudy to resign his 19MM deal.
 
#6
They only have to stretch if they don't want to pay a minuscule amount of Tax (in your scenario). I think stretching is a bad idea and I think that ownership is willing to eat a small amount (as a percentage) this year in tax to have more flexibility next 2-3 years. Hell they BEGGED Rudy to resign his 19MM deal.
Maybe, but maybe not.. The small amount of cap inflexibility might be less than the inflexibility that comes with the "repeater tax."
 
#9
They only have to stretch if they don't want to pay a minuscule amount of Tax (in your scenario). I think stretching is a bad idea and I think that ownership is willing to eat a small amount (as a percentage) this year in tax to have more flexibility next 2-3 years. Hell they BEGGED Rudy to resign his 19MM deal.
Non-taxpaying teams also get their share of "tax" money, so it would be bigger than a few hundred K, more like $3-4 million.
 
#10
Every time I look at that chart, I get very excited about the possibilities of next year, then remind myself that to tone it down by simply looking at JT and Landry's combined contract $$$ and suddenly, I'm back at ground level of hope and expectations.
 
#11
Non-taxpaying teams also get their share of "tax" money, so it would be bigger than a few hundred K, more like $3-4 million.
Yup, not just thousands to be had. Last season there was ~$150M paid in lux tax paid by 5 teams. That means 25 teams get paid out from it. According to cbafaq:
  • Up to 50% of the tax money may be given to non-taxpaying teams. Note that there is no requirement that any of the tax money be distributed to teams in this manner.
  • Any tax money not distributed to teams will be used for "league purposes." In other words, at least 50% of the tax revenue will be used for league purposes each season.
So it looks like at max, 3M this year was/will be paid out. 3-4 is a good guess next year.
 
#12
Vivek said he will never be a luxury tax accepter when he took over the team. So that is not going to calculate into their thought process. It was thought that it was one of the reason why the other owners liked him so much, he was not going to cut into their piece of the pie.
 
#13
Vivek said he will never be a luxury tax accepter when he took over the team. So that is not going to calculate into their thought process. It was thought that it was one of the reason why the other owners liked him so much, he was not going to cut into their piece of the pie.
There was never a direct quote, since all the meetings were behind closed doors, but I believe claim was about refusal to take revenue sharing money, not LT.
 

Capt. Factorial

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Staff member
#14
There was never a direct quote, since all the meetings were behind closed doors, but I believe claim was about refusal to take revenue sharing money, not LT.
Yeah, but that can't be right because the revenue sharing system is really complex. Basically you put 50% of your revenues in, then get back out whatever the calculation says. There's no way we're putting in 50% and taking back nothing. That's suicide.