johnston797

Free free to incorporate away.

The Warriors like, or even love, Gilbert as a player. So, for complete clarity, the post should have read: So if they are ambivilent about Arenas given lux tax implications, they will just make the offer but skip the sales job.

H2O

Fantastic post, well researched and thought out.

A quick question about the Knicks if you know it. The Knicks are owned by Cablevision, which also retains the rights to MSG network, and the NY Rangers. When you say the Knicks lost money last year, you are not factoring in the cable royalties they save by having free broadcast rights, correct? Because last I heard the Knicks are still wildly profitable due to this unique structure.

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Isiah Thomas is a genius.

Dan Rosenbaum

"Profits" really should be in quotes, because there are a lot of tie-ins (like those that you mention) that I think are not counted in revenue in these calculations. (I plan to put a note to that effect at the bottom of the post when I get there.)

Also, things like the expansion team fees are not included, and I think some of the revenue for NBA licensing ($2.1 billion in gross sales of NBA merchandise last year) may not be included. [I would love to hear what anyone knows about that.] It looks like to me what Forbes reports as revenue is only that which is counted in BRI calculations. And BRI leaves out (I think) some fairly sizable chunks of revenue (such as those mentioned above) for these teams.

That said, I think these "profits" are still useful, since it is the change in "profits" from year to year that is most interesting. And these other sources of income are likely to not change a lot from year to year, so the story for the change in profits is likely to be about right.

killbuckner

I really think that the Arenas thing is somewhat simplified. While the Warriors can't shed enough salary to fit Arenas under the salary cap, they certainly would be able to shed enough salary to avoid paying the Luxury tax (at least this year). I just think you are trying to hold too many variables constand when trying to predict a teams actions.

That said- I don't think that Arenas would sign for the MLE making the conversation moot.

Sicky Dimpkins

Changing Stackhouse's contract to save cap space?

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English not drafted, hopes for tryout.

Dan Rosenbaum

I think that Stackhouse could exercise his player option, thereby becoming a free agent with no obligations to any team. Then he could re-sign with the Wizards for whatever amount he chooses to.

I think the section of Larry Coon's FAQ that you cited refers to long-term contracts without player options.

Sicky Dimpkins

20+ 21+ 85= thin ice for any team acting on that cavalier(IMO) interpretation. I also think it applies to cutting J and paying him "off cap/tax" later.


The sense this hack has of the "general prohibition" against circumvention is that it is as wide as the -the league- wants it to be and that even if it's not specifically against the CBA it can be shot down and maybe penalized. The player/coach position was eliminated for a similar reason.

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English not drafted, hopes for tryout.

Dan Rosenbaum

Fair enough, Sicky, you might be right. But I think everything that we have discussed has been about "renegotiations." Renogiations are defined as "a Contract amendment that provides for changes in Salary and/or Incentive Compensation."

This is different than a player option, which allows a player to switch teams. According to your interpretation, if Stackhouse exercised his player option, found out after two months of trying that no team other than Washington was willing to offer him the minimum, then he would be barred from signing with Washington for anything less than $6.9 million.

In other words, rather than sign a five year contract for $30 million with the Wizards, he would be forced to sign a minimum contract with another team. If no other team was willing to sign him to a minimum contract, then he would be out of the NBA, even if Washington still was willing to pay him $30 million over five years.

If this was a "renegotiation," I would agree with you, but since it is a player option (not every long-term contract includes a player option), I think that you are mistaken here. It seems unfairly harsh, since your interpretation could potentially put Stackhouse out of the NBA, whereas there would be no such danger with a renegotiation, since a renegotiation never results in a player being without a team.

hcsilla

Fantastic analysis.Very,very good post NCBullsFan.
It's no wonder that you are a professor. Can I ask how old are you? I'm just curious.

I remember (do you?) that we had a small debate last summer on realgm.com about Donyell Marshall's future in UTA.
You said that UTA will excersize their team option on his contract and will let him to go if Marshall won't take a significant pay-cut.
I have disagree.

You were not only right but also UTA made the right decision.
They got Harpring who is younger and was at least as productive as Marshall was and they saved at least 5 mil. this year.
I always thought that luxury tax (and it's "consequences") is a very important factor in GM's decisions (it's not a big discovery) but I underestimated its importance.

For example weren't also YOU a bit surprised when ORL "dumped" Don Reid's 1mil./1year contract and they gave a future 1st rounder (Ok, they got a 2nd rounder as well, big deal)for it which can turn out to a high lottery pick?

Or the newest example MIL traded Sam Cassell for 4 mil. immediate cap relief. I seriously think that the cap relief was MIL's main goal in that trade and I don't really buy Ernie Grunfeld's comments like "Joe Smith is a great addition, he is very talented" etc. Come on, we are talking about Joe Smith.....

Finally a question:

I'm a Suns fan and it was a pleasant surprise that Suns made a profit about 20 mil.
How is that possible that small markets with high team pay-roll and with 1st round-exit (as UTA and PHO) make a nice profit while SA which is a bigger market (at least I think it is) and won a ring makes 20 mil. less profit?

e

NCBullsFan,
Fantastic job in progress.
I've got a few small observations & recommendations on your 2003 guide...

1. Portland
There is a joke just dying to happen in your comment regarding 'Sheed & his option.

2. New York
Last I remember reading, NY's option on Ward includes a $2MM buyout (read this near the Feb trading deadline). I'm not sure, per CBA, if this type of buyout affects a team's cap figure.

10 & 12. These will have to be revised due to the Cassell trade. I was surprised myself to learn Peeler has a team option on his contract. It looks like Mil will shave $4MM off their cap, explaining the talent lopsidedness of the deal.
Also, I was under the impression that Brandon's salary would count against the cap until he comes off the books in January/February, causing a 2003-04 cap hit of roughly 50% of his salary. Of course, I have nothing to base this impression off of, just wanted to share it.
Personally, I think Minnesota's being a cocktease with all this talk of a Brandon deal. If they dealt him for a big contract, they could have to make a huge profitability vs KG decision next year. If Taylor is feeling Cubanesque, he may try someway to swing a deal for a guy like Rasheed ('04 ending) in an effort to convince KG they can win in Min.

13. Does atlanta have a capable gm? just wondering, as I don't think I've heard what they've done post-babcock. Waiting another 2 years for their big boys to come off contract could be their best approach.

17. I'm a Bulls fan too, and some info on the possibilities with Williams injury in mind would be very interesting.
a. An injury exception? Can they trade it away for a guy like Turkoglu, which would (if unused) basically save Sacto 3MM or more? Or how about Mo Pete?
b. Voided contract.. does it come off the cap number immediately?
c. Does this reduce the Bulls interest in moving Jalen Rose's 06-07 salary?

19. Wrong Barry, try J Barry as an FA

21. Just a comment... man I love how the Rose trade basically screwed the Pacers salary wise. I would love to see J'O jump ship.. *dream*

22. Any word on Hill's situation and how it could affect ORL's payroll over the next year or 2? Should they be preparing with 1 year deals for a lot of dough in next year's offseason? Maybe for 'Sheed?
Or maybe they accellerate it and pursue a 'Sheed for Hill deal, if the NBA would grant cap relief for Hill this year.

24. I like your MIA overview, makes a lot of sense.

25. The clippers, oh so fun.
I think it will be interesting if any team or Clip RFA considers offers. The best bet for an RFA to leave would probably be A. Miller at a $6MM+ salary. He stunk it up in LA and to the best of my knowledge, Sterling hasn't paid anyone over $5MM.
Brand would be smart to take the qualifying offer, probably Odom too. Maggette would have to consider $5MMish offer sheet if it came around, I'm not sure how afraid he'd be of Clip match.
They can't lose all these guys, due to minimum team salary, so I agree with your assessment that most if not all of them will be '03-04 Clips.

26. Jerry Stackhouse took opportunity on Washington's depleted front office. Nice robbery, Jerry. 2 years for 18MM so I hear. Not that bad for the Wizards tho, as they keep a marquee-ish name and they arent that threatened by the luxury tax in my quick calculations.

27. Very interesting thoughts on San Antonio.
About the long term aspects..From what I've heard, Malik Rose has a team option around year 4 of his 7Y $42MM deal. That could save a 2Max Contract Spurs from luxury taxes, if Parker is signed to a reasonable Jason Williams type extension rather than a Bibby sized one.

28 & 29. I'm interested in the section that you reference as "I will discuss this in more detail below." I guess that is why this is still a draft!

Great work, very impressed. Thanks for sharing your thoughts with us!

Storyteller

Excellent work, NCBullsFan!

Exactly the type of post I aspire to write some day.

BTW, a very small point, but one I'm familiar with as a Blazers' fan:

I'm 99% positive that Boumtje-Boumtje signed a 2 year deal last summer. (Am I nitpicking or what? )

Seriously, I say this just FYI. Your info. updated my own Excel spreadsheet on so many players, I felt I had to say something - for my ego's sake if nothing else......

Dan Rosenbaum

Thanks guys for your kind words and comments! I have tried to incorporate them in my original post, which I think TBF is going to circulate today.

So Cal Blazer Fan, tell folks in the Blazers' forum about this post. I suspect there are many that would enjoy reading it, even though my discussion of the Blazers is a bit short. Also, I will probably get ripped for not mentioning Payton as a possibility for Portland, but I think that Portland might be trying to cut costs this summer, and adding Payton probably would not fit in well with those plans.

e, there wasn't anything I really disagreed with in your detailed comments. Thanks!

hcsilla, I turned 33 on the day Jay Williams crashed his motorcyle. If you want to know more about me, here is what you get when you google "Dan T. Rosenbaum." The first site is my web-site, and many of the remainder are references to papers that I have written on tax and welfare programs. (I haven't updated my web-site in awhile, since it does not even include anything to do with the NBA.)

http://www.google.com/search?hl=en&i....+rosenbaum%22

jreywind