Originally posted by Joe Mama
That pick is worth far more than $5.66M.
I guess that depends on who you talk to. At best that is going to be a 17th pick.
Even a 17th pick is worth far more than $5.66M, as long as you’re making decent picks, which the Suns almost always do. With the 17th pick in the 2003 draft, we took Zarko Cabarkapa, whose rookie contract gives him to us for four seasons at a total of $6.10M. If we had not drafted him, do you think we could get a player of comparable quality for four seasons at total less than $11.76M? (That would be a four-year contract with 10% annual increases starting at $2.56M.) If not, then Zarko’s rookie scale contract saves us at least $5.66M.
Also, wouldn't this trade take the Phoenix Suns under the luxury tax limit, so they would be eligible for the luxury tax distribution?
As far as I know, there is no publically available information that describes how the luxury tax funds are distributed. I’ll try to research this matter, but in the meantime, we’ll have to guess.
Some columnists like to operate from the assumption that the tax is distributed to the teams under the tax threshhold. They therefore conclude that the difference between being $1 over the tax threshhold and $1 under the tax threshhold is about $11M. I do not believe that this is how it actually works. In fact, I’m pretty sure that it does not. The difference between being just under and just over the threshhold is small.
Back when we signed Dan Majerle for his final season, Bryan Colangelo mentioned in an interview that this signing brought us from just under the projected tax threshhold to just over it. He said therefore that we would be paying a little luxury tax on Majerle, but that Majerle was worth it. I think it’s quite reasonable to assume that the team would not have made that signing if it could have cost the organization an $11M+ distribution in addition to his salary and the tax thereon. The guy wasn’t worth
that much.
There have been numerous other examples of teams near the threshhold signing irrelevant journeymen to warm the end of the bench. Not knowing the exact amount of the threshhold (which is calculated at the end of the season, based on revenue during the season), teams make such signings knowing that there is a significant possibility that the signing will bump the team salary from slightly under the threshhold to slightly over it. Teams would surely not make such a move knowing that such a small change in payroll could cost the team an eight-figure luxury tax distribution.
I suspect that the impact of a small difference in payroll is small. The difference between being $1 under the threshhold and $1 over the threshhold is $2 in salary, plus $1 in taxes. There may also be an impact on tax distributions, but I’m confident that if it does impact tax distributions, that impact is somewhat in line with the magnitude of the change in team salary. Thus a $2 change in team salary may cost the team more than $3, but it surely does not cost it $11M. Maybe $3.50 at most.
I guess I don't understand Googs contract.
