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| Expendable All-Star Luol Deng launches a jump shot. Sylvester Stallone not pictured. (flickr) |
Under the new Collective Bargaining Agreement, teams around the league seem to be tightening their belts. Even the best, most profitable teams in the league – Miami amnestied Mike Miller, the Lakers amnestied Metta World Peace, Oklahoma City let Kevin Martin walk in free agency, etc. It’s basically everyone but Brooklyn.
Teams are generally more afraid of the luxury tax than they ever have been before. For one, the tax is more punitive starting this upcoming season – what used to be a dollar-for-dollar tax is now a $1.50-per-dollar tax at a minimum, and can escalate to as high as $3.75-per-dollar, depending on how far above the tax a team is. More importantly, perhaps, is the “repeater” tax rate that will go into effect for the 2014-2015 season. If a team has paid the tax in each of the last three seasons, the minimum tax rate jumps from $1.50-per-dollar to $2.50-per-dollar and the maximum tax rate jumps from $3.75-per-dollar to $4.75 per-dollar.
In layman’s terms – a team $20 million over the tax line in 2013 would have paid a $20 million tax. A team $20 million over the tax line in 2014 would pay a tax of $45 million. In 2015, if they had paid the tax in each of the previous three seasons (and thus qualified for the “repeater” tax rate), they would pay a tax of (gulp) $65 million.
