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Red's Army

Your Morning Dump… Where the C’s are on a serious budget

John - Red's Army (@RedsArmy_John) July 1, 2013 Celtics News, The Morning Dump 12 Comments

WYC EMPTY POCKETS

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.

Herald: Austerity now Ainge’s game

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.

ESPN Boston:  C’s likely to be spectators in free agency show

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

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  • chuckmckenney

    Embrace the tanking. It’s futile to fight it.

    • eddysamson

      Ya this is where I’m at. We’re pretty much forced to with the recent moves, though.

    • RedsLoveChild

      2014 Draft is too enticing.

      Tank for 1 year + root for Net injuries {D-Will, JJ} = Lightning quick rebuild

  • PB

    no tanking. I would much rather find a way to get JSmith and be competitive. They might not be a Heat caliber team but they would be fun to watch, and ultimately a team that plays stifling D -which Smith would help with- can win a title (see any pistons championship ever).

  • Frank Aziza

    We are going to suck for ten years.

  • Chris Laterza

    From Yahoo’s Ball don’t lie blog

    “Teams don’t rebuild with this sort of payroll, though. The Celtics will still be way over the cap next season, and the team enter the 2014 offseason right at the salary cap level due to Wallace’s massive deal (three years, and $33 million after 2012-13), with restricted free agent Avery Bradley ready to hit a market that will have scads of teams working with cap space, and several roster spots left to fill. Real cap relief, the hallmark for any rebuilding team, won’t really set in until the 2015 offseason. And that’s when Rajon Rondo, sick of it all, could flee as a free agent. By the way, Gerald Wallace will still be on the books (two full years after the Chicago Bulls basically ignored him on offense during Brooklyn’s first round loss earlier this year) for over $10.1 million.”

    So instead of keeping KG and PP for 2 years then letting them retire and getting 25 million in cap space we decided to make a division rival the #3 favorite odds wise to win a championship and we hamstrung our cap space anyways?

    • Suarez

      I found the Ball Don’t Lie piece to be pretty shortsighted. It fails to recognize why rebuilding teams covet cap space.

      At this point in the rebuilding process, the Celtics do not need cap space. Other than saving a little more money, it doesn’t really help. The most important thing right now is avoiding the luxury and repeater penalties, as is so well explained by John in the article above.

      In order for cap space to be useful, you have to build some semblance of a competitive team.

      Get a few good young pieces, then get cap space and use it to pick up some free agents or swing a deal. Then, go over the cap to resign the young guys long term. That’s just one scenario. With Rondo, Green and all the draft picks for the next four years, there are going to be many avenues to choose from while rebuilding.

      Wallace’s contract does suck. But it could actually become an asset in two years when he enters his expiring year.

  • eddysamson

    I noticed you said theres not going to be a pursuit of Smith. Well…I’ve read a few sources today say he’s meeting with the Celtics and they are, in fact, pursuing him.

    • Suarez

      The only thing I read was a tweet by Alex Kennedy that said he was visiting with the Pistons and that the Celtics were “expected” to pursue him. That sounds pretty speculative.

  • KGino

    There you go. Let go of KG and PP and now we’re in tank mode. So happy we traded them! :/

    Future draft picks are nice, but they certainly aren’t guarantees.

  • forever_green

    If theres a need to be cheap, you shouldn’t own the Celtics, I’m afraid we’re entering the 90’s again.

  • Chris Laterza