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Hey DickieHurtz,

For the record, I started my thread after the post "Hi, welcome to the team. By the way, you're cut!" was submitted. HOWEVER, since I merely saw a headline announcing the Bulls trade for Barkley with no reference to their waiving him, I began my thread. Was I supposed to know that the other post - which btw made NO reference to Barkley - was on the same topic??? All I was trying to do was bring this issue to fans who may not have heard yet, is that so wrong?

MikeDC: Please refrain from personal attacks on others.
 

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Originally posted by <b>ChiBullsFan</b>!
Hey DickieHurtz,

For the record, I started my thread after the post "Hi, welcome to the team. By the way, you're cut!" was submitted. HOWEVER, since I merely saw a headline announcing the Bulls trade for Barkley with no reference to their waiving him, I began my thread. Was I supposed to know that the other post - which btw made NO reference to Barkley - was on the same topic??? All I was trying to do was bring this issue to fans who may not have heard yet, is that so wrong?

MikeDC: Please refrain from personal attacks on others.

You know, just an issue of maturity here... kind of a shame. I was just telling TBF in a PM how the Bulls board was highly intelligent and how I didn't really want to write a Bulls editorial because practically every post is a well thought out article. To see immature horseplay like this is sad.

Ahem, all my commentary aside, please consider the harrassment guidelines of Basketballboards.net (it's a little link at the bottom of the page). Thanks.
 

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Originally posted by <b>HJHJR</b>!
The Chicago Bulls today acquired guard Erick Barkley and an undisclosed amount of cash from the San Antonio Spurs in exchange for future considerations.

Subsequently, the Bulls have waived Barkley.

A 6-1, 185-pound guard, Barkley played two seasons with the Portland Trail Blazers, averaging 2.9 ppg and 1.5 apg. The Spurs acquired Barkley with guard Steve Kerr and a 2003 second-round pick from the Trail Blazers in exchange for Antonio Daniels, Amal McCaskill and Charles Smith on August 5, 2002.

Of course it's possible the cash the Bulls received will offset Barkley's salary. S.A. had 18 players on their roster at the beginning of the day. Those "future considerations" the Bulls owe the Spurs will somehow never get delivered. But Krause isn't doing this just because he's a nice guy. There's a quid pro quo in this deal somewhere.
Whats interesting to me is how does a deal like this get born? SA just starts calling up GMs who might bite? Was Krause the first GM because of the Bulls situation? Does he have a better than average relationship with them? Does this type of deal get done in a phone call? And I guess we might as well ask what would it have hurt for the Bulls to at least take a look at the guy before cutting him?
 

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Yeah there's gotta be something fishy about it.

For now, I think Denver, Minnesota, or Orlando might be interested in picking him up for the minimum.
 

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The Barkley Trade Probably was Purely Financial

Originally posted by <b>ScottMay</b>!
NCBullsFan, what does this all mean?
ScottMay:

I hope this post answers a lot of questions about why the Bulls pulled off this trade if they were going to immediately waive Barkley.

According to the latest reports, it looks like the marginal tax rate over the first $3M or so over the luxury tax threshold is greater than 100% due to the disbursement rules. The marginal tax rate over this range is likely to between 350% and 400%.

San Antonio is likely to be barely above the luxury tax threshold, so Barkley was likely to cost them his salary of about $800K plus a marginal tax of about $3M for a total of about $3.8M.

Since the Bulls are below the luxury tax threshold, adding Barkley would only cost them $800K, so if the Spurs offered the Bulls say $2.3M, both the Bulls and Spurs would likely be better off by about $1.5M.

However, in order to make this trade, a team like the Bulls would have to have a trade exception or be below the salary cap. (Note that the Clippers are right at the salary cap now and probably could not pull off this trade.) The teams most likely to take advantage of this opportunity are teams safely below the luxury tax threshold who would have the most to gain.

According to RealGM, the Bulls, Pistons, and Wizards are the only teams safely below the luxury tax threshold with trade exceptions, so there were not a lot of teams who could have profited from this deal the way the Bulls did.

(I think we had a trade exception from the Rose trade. I think the Rose trade was manipulated so that both the Pacers and Bulls ended up with small trade exceptions.)

Also, I have heard that it is extremely unlikely that Jordan and Unseld understand salary cap/luxury tax issues well enough to pursue such a deal with San Antonio (or be convinced by San Antonio that they should have been), so the Bulls and Pistons probably were the best two options for this trade.

I suspect that this deal was primarily financial and that the "future considerations" probably don't amount to much, except for good will.

Remember the Bulls are the most profitable team in the NBA and we would never expect Krause and Irwin Mandel (his CBA expert) to miss a beat on figuring out how to take advantage of the coming of the luxury tax. According to my latest projections, between 00/01 and 03/04, I project the Bulls to earn more than $200M in profits, which represents almost a quarter of the profits for the entire league. (Don't think for a minute that Reinsdorf will ever get rid of Krause.)

One last note. Ironically, I sent Mr. Mandel a spreadsheet just last week (I do not regularly communicate with him), which showed among other things, that San Antonio was just above the luxury tax threshold and could benefit greatly from a deal, such as this one involving Barkley. He courteously told me that he would pass on looking at the spreadsheet, but then a couple of days later, the Bulls probably made a cool million or more using information that was available on that spreadsheet.

I take Mr. Mandel at his word and believe that he never looked at the spreadsheet, but the timing of these events still makes me chuckle.
 

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Wow thanks NC Bullsfan great explanation of the deal and why it was done- there is certaintly one thing we can say about krause he is going to have this organization in the best financial position in the league- how do you see him taking advantage of the bulls great financial situation- getting free agents in the future and just rewarding our young talent we have now(jwill,curry,chandler)?
 

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The Wizards as far as I can tell are close to Luxury Tax land because of dead salary on the books so I doubt they could have been involved.
 

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Originally posted by <b>BCH</b>!
The Wizards as far as I can tell are close to Luxury Tax land because of dead salary on the books so I doubt they could have been involved.
Nobody that is not affiliated with the league can know these things for sure, but counting "dead salary," I have the Wizards at more than $5M below the projected luxury tax threshold, so it appears to me that they could have taken advantage of this opportunity.
 

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Re: The Barkley Trade Probably was Purely Financial

NC,

Good stuff.... A couple of comments\questions.

Originally posted by <b>NCBullsFan</b>!

I think we had a trade exception from the Rose trade. I think the Rose trade was manipulated so that both the Pacers and Bulls ended up with small trade exceptions.
It was reported that we used the trade exception from the Rose deal. AND I don't think it's possible that 2 trade exceptions can be created from one trade. Only the team that takes back less $$$ gets one, right?


Originally posted by <b>NCBullsFan</b>!
Also, I have heard that it is extremely unlikely that Jordan and Unseld understand salary cap/luxury tax issues well enough to pursue such a deal with San Antonio (or be convinced by San Antonio that they should have been), so the Bulls and Pistons probably were the best two options for this trade.
Assuming the Spurs pursued the deal, I think even Wes could comprehend giving up a trade exception and gaining, say, $1.7M for acquiring and waiving a player making $0.7M.

If not, you (or I ;) ) should consult for them.

Originally posted by <b>NCBullsFan</b>!
I suspect that this deal was primarily financial and that the "future considerations" probably don't amount to much, except for good will.
I hope this does not bite the Bulls in the Azz and stop a future trade from going through just for 500k or $1M..

Originally posted by <b>NCBullsFan</b>!
Remember the Bulls are the most profitable team in the NBA and we would never expect Krause and Irwin Mandel (his CBA expert) to miss a beat on figuring out how to take advantage of the coming of the luxury tax. According to my latest projections, between 00/01 and 03/04, I project the Bulls to earn more than $200M in profits, which represents almost a quarter of the profits for the entire league.
What is the total rev and total cost that you project for the Bulls this year? How high could the payroll be at the break-even point?

Originally posted by <b>NCBullsFan</b>!
Don't think for a minute that Reinsdorf will ever get rid of Krause.
Ironically, the season ticket holders were the ones most responsible for keeping Krause. The Bulls product was terrible and boring for 3 years and the team still nearly sold every seat. I think Krause is pretty safe now with all of his good moves over the last 1.5 years.
 

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Re: Re: The Barkley Trade Probably was Purely Financial

Originally posted by <b>johnston797</b>!
NC,

Good stuff.... A couple of comments\questions.

It was reported that we used the trade exception from the Rose deal. AND I don't think it's possible that 2 trade exceptions can be created from one trade. Only the team that takes back less $$$ gets one, right?

Assuming the Spurs pursued the deal, I think even Wes could comprehend giving up a trade exception and gaining, say, $1.7M for acquiring and waiving a player making $0.7M.

What is the total rev and total cost that you project for the Bulls this year? How high could the payroll be at the break-even point?
J797 and Basg: Good questions. I did not read the Daily Herald Article before my post, and so I update the salaries in my original post.

I think the Pacers and Bulls broke the trade up into two separate trades, generating two trade exceptions. That is usually not possible with most trades.

Yes, you are right about Wes, but perhaps the Bulls pursued this deal. If I was working for the Bulls, I would have been pursuing deals like this one. The Bulls trade exception was quite small, so I doubt if it would have been useful in later trades. Remember trade exceptions cannot be combined with other players to make a trade possible. The mysterious Iavaroni (and FJ, I think) corrected me this summer on my earlier mistaken impression that trade exceptions could be used in this way.

If the Bulls are able to keep their revenue growing (at the same rate as the rest of the leauge) from what it was in 00/01, then I project that their "break-even point" net team salary (after luxury tax/escrow penalties and disbursements) would be $80M-$90M after 03/04.

Given the possibility that after 03/04 the luxury tax may not still be in effect, the Bulls may have the leeway to re-sign Curry, Chandler, and JWill to max deals (if they are that good) and still be profitable. They would probably be the only team in the league (except for maybe the Knicks and Lakers) who could afford that.

Even if the luxury tax is in effect, the Bulls likely will be able to go over it to keep their key players. The real question, though, is whether they will be willing to go from being the most profitable team in the league to a team with marginal profits. The rhetoric suggests yes, but the proof will be in the pudding.
 

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The reason I continue to read this board: NCBULLSFAN.
Kudos
 

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Is it just me

or is this nothing trade getting far too much chatter in here?


the spurs wanted to rid themselves of a player they had no use for whose salary put them over the luxury tax threshold but they couldn't cut him because he had a guarenteed contract


so they traded him for nothing

thats basically what happened

the bulls didn't want but they could cut him so they did(after the got a slight compensation for doing this favor for the spurs in the 1st place)

there was never any pt battle brooming (if barkley couldn't take any time from speedy claxton or at least make it close enough that the spurs could care what would make a rational person think he would take time from williams and crawford)

its not cloak and dagger stuff

barkley came out of college early and he's still not ready to be the guy or the back up guy after a year or so in the nbdl, turkey or wherever he's going he may be ready or maybe not who knows and really, who cares
 

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Re: Re: Re: The Barkley Trade Probably was Purely Financial

Originally posted by <b>NCBullsFan</b>!
The Bulls trade exception was quite small, so I doubt if it would have been useful in later trades. Remember trade exceptions cannot be combined with other players to make a trade possible. The mysterious Iavaroni (and FJ, I think) corrected me this summer on my earlier mistaken impression that trade exceptions could be used in this way.
Got it. Since the Bulls will have 15 players on the roster, they would have to get rid of a guy like Brunson or Bags to add another player. So the trade exception would have been useless as it was roughly for the same amount as our current 15th man.

Originally posted by <b>NCBullsFan</b>!

If the Bulls are able to keep their revenue growing (at the same rate as the rest of the leauge) from what it was in 00/01, then I project that their "break-even point" net team salary (after luxury tax/escrow penalties and disbursements) would be $80M-$90M after 03/04.

Given the possibility that after 03/04 the luxury tax may not still be in effect, the Bulls may have the leeway to re-sign Curry, Chandler, and JWill to max deals (if they are that good) and still be profitable. They would probably be the only team in the league (except for maybe the Knicks and Lakers) who could afford that.

Even if the luxury tax is in effect, the Bulls likely will be able to go over it to keep their key players. The real question, though, is whether they will be willing to go from being the most profitable team in the league to a team with marginal profits. The rhetoric suggests yes, but the proof will be in the pudding.
This is really good news. I remain skeptical about Reisdorf comments which left a lot of wiggle room. BUT I think both Krause and Reisdorf will pay to keep a very high quality player with the team especially if it is primarily a timing issue where a big extention (Curry, Chandler) kicks in one year before another big contract (Hello, eROB) expires. There is a major cost in losing a FA and gaining no compensation.

Looking ahead, I can't see the Bulls losing a very talented 22 year old 7' footer assuming that the HS kids continue to work hard and improve.
 

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Re: Re: Re: The Barkley Trade Probably was Purely Financial

Originally posted by <b>NCBullsFan</b>!
Given the possibility that after 03/04 the luxury tax may not still be in effect,
When does the CBA expire?
 

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Re: Re: Re: Re: The Barkley Trade Probably was Purely Financial

Originally posted by <b>johnston797</b>!When does the CBA expire?
The CBA expires after the 03/04 season, although the owners have the option to extend it one additional year with the escrow threshold at 57% of BRI rather than the 55% of BRI that it is at in 02/03 and 03/04. The luxury tax threshold would rise from 61.1% of BRI to 63.3% of BRI.

With the big contracts of Reeves, Kemp, and Garnett (among others) coming off the books, with teams experiencing the effects of two years of luxury tax and escrow disbursements, and with a weak class coming off their rookie contracts (Martin/Swift/Miles/Fizer/Miller etc.), I think that the luxury tax is a 50/50 proposition for 04/05.

I would guess that there will be a luxury tax in the next CBA, but I suspect the Players' Association will demand some concessions. If the negotiations get ugly (which I suspect they will), I would not be surprised if a few of the rich owners who have been killed by the luxury tax get together with the players to talk about starting a new league. If I was negotiating for the players, I would start thinking about that new league today, thereby increasing my leverage a couple of years from now.

At the end of the day, I suspect that there will a luxury tax, but it will be less severe than what it is under the present system.
 
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