If you follow The Association with much interest then you know — or you’re beginning to understand, anyway — that the new collective bargaining agreement was a game changer. The new luxury tax rates and rules, while still technically part of a “soft cap,” will operate effectively like the hard salary cap that the NFL and NHL have. Beginning next season, every dollar over the luxury tax line will be taxed at $1.50 (previously dollar for dollar). If a team is $5 Million or more over the line, the tax becomes $1.75 per dollar. After $10 Million it becomes $2.50 and after $15 Million it becomes $3.25. Oh, and if a team finds itself in the “repeater tax” zone (if they’ve been tax payers for 4 of the past 5 seasons) they’ll pay an additional dollar on all of those rates. Some basic math will show that a team well above the tax line hoping to re-sign a veteran star player might end up paying $40 or $50 Million per year to do that, instead of the $15 Million or so that the player is actually paid.
I listened to David Stern speak last month in Minneapolis and he was essentially bragging about the owners’ lockout accomplishment of increasing revenue sharing AND “talent sharing.” (Stern was speaking to the Timberwolves’ fan base, mind you. I suspect his lawyerly instincts would have him singing a different tune if standing before a Knicks or Lakers-friendly crowd.) He cited examples like Tyson Chandler leaving Dallas, Jeremy Lin leaving New York, Omer Asik leaving Chicago and James Harden leaving Oklahoma City as evidence that the league’s goal of spreading around talent is already being accomplished. Bill Simmons took on the NBA’s fiscal phenomenon in his column yesterday, focusing on the league’s best bargain contracts. The overarching theme is that getting great contracts is beginning to matter almost as much as getting great players. If teams want to contend for championships–particularly if they’re one of the 29 teams that does not have LeBron James on its roster–they need to keep their finances in proper order.
So with that background, and with decisions like “whether to match Nikola Pekovic’s upcoming offer sheet” coming up sooner than later, I thought it a good idea to revisit the Wolves payroll.