Every morning, we compile the links of the day and dump them here… highlighting the big storyline. Because there’s nothing quite as satisfying as a good morning dump.
Low-budget options will be the C’s norm for a while.
As one member of the organization cautioned last week, “We’ll be dealing with veteran minimum contracts this year and not much else. Next summer, we’ll be taking a bigger look at free agents.”
So much for those hoping for a colossal sign-and-trade deal for Josh Smith, who starts free agency today believing he can land a maximum contract somewhere. Rajon Rondo may be more disappointed than anyone that he probably won’t be teaming with his former Oak Hill Academy teammate.
Getting the salary structure in order is no simple chore. Sometimes it means showing great restraint, which is a little easier if you don’t want you team to be too good. The Celtics, who will be hard-capped if Keith Bogans is sent to Boston via sign-and-trade as part of the Nets deal, will likely desire to stay below the luxury-tax line next season. New repeater rates loom after this season, and the Celtics won’t be looking to add big dollars to their roster.
So despite the fact that Boston could have some valuable exceptions available (like the non-taxpayer mid-level or biannual), it might be better for the Celtics to simply sit on their hands, or at least err on the side of short-term additions.
I’ve been screaming this for a long time now, so I’m hoping that everyone starts to understand the severity of this situation. The Celtics are NOT going to pay a luxury tax on a team that is by no means a luxury. Especially not with the repeater tax set to hit after next season.
What’s the repeater tax?
In the 2014-15 season, any team that has paid the luxury tax over the prior three consecutive years will pay a higher rate than everyone else.
So let’s pretend a team is a nice, clean, $10,000,000 over the cap.
- Under the old system, which was in place until last season, the tax bill for that was $10,000,000… which is a dollar for dollar tax rate.
- This upcoming season, the tax bill will be $16.25 million. It’s an incremental tax rate that starts at $1.50 per dollar, but increases for every $5 million you’re over the cap.
- Next season, if you’re a “repeater” team, the tax for being $10,000,000 over the cap is $26.25 million.
The new CBA nearly triples the tax a team like the Celtics has become accustomed to paying. Unless you’re a bazillionaire like Prokhorov in Brooklyn (whose tax bill next season might be around $70 million, by the way), you’re not inclined to be paying taxes all that often in the NBA anymore.
So wrap your heads around the repeater tax, ladies and gentlemen. Starting next year, it will apply to any team that has paid the tax in three of the previous four seasons. So not only will the Celtics be on a non-tax budget this summer, they’ll probably be on one next summer too or else they’ll be hit with the repeater tax in 2014-15. From there, it will be a dance of tax paying for a few years and then stepping out again.
Also keep in mind that the tax line is likely going to be just under $72 million, and with good management, you can go over the cap to sign key guys but still avoid the tax. The Oklahoma City Thunder have done it pretty well. But that just means the days of signing big-name free-agents to massive contracts will be more limited than ever. Max contracts aren’t going to be handed out has freely as they were before.
That is, unless you’re 7-feet tall, AMIRITE BROOK LOPEZ???
Anyway, the entire goal of this CBA and its repeater taxes and other penalties for big-spending teams (like a sign-and-trade triggering a hard-cap) is to not allow major-market teams to stockpile big, bloated salaries and spend their way out of mistakes that small markets can’t afford to make. It does indeed level the playing field to a degree because even though these owners are super rich, they don’t want to throw their money away on a non-contender.
Wyc Grousbeck and the boys upstairs have been very willing to pay taxes on this team, just not when they suck. And after a long stretch of success, it’s time to suck and be cheap for a little while until enough lines in the ledger can be cleared to start piecing together another contender.
This is what rebuilding is. And under this CBA, it’s going to happen a lot more often than we’re used to. This is a new set of rules that is only just starting to kick in for this upcoming season and beyond. The landscape is changing dramatically.
So I’m sorry to everyone who’s asking, but there’s not going to be a pursuit of Dwight Howard, Al Jefferson, Josh Smith, or any other big name you might wish was in Green and White next season. They’re just not in the budget.
This was a big topic of discussion with Mike Gorman last night on Celtics Stuff Live. Please check out the show. It’s 2 and a half hours long, but Gorman is the first half hour of it.
The rest of the links:
Globe: Celtics honor final year of Pierce’s contract at $15.3 million (to facilitate Nets deal) | Saying goodbye to Paul Pierce | CSNNE: Did Doc quit on the Celtics | C’s release Williams for roster, cap flexibility | WEEI: Celtics waive Williams on eve of free agency | Report: C’s front-runners to sign Italian forward Gigi Datome | An audio look back on the Doc, Pierce, KG era