Insider 7/25/2005 Allan Houston rule

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Wednesday, July 6, 2005
Updated: July 25, 4:43 PM ET
Celtics, Lakers, Sixers need 'Allan Houston rule'

By Chad Ford
ESPN Insider

The "Allan Houston Rule" allows teams a one-time opportunity to release a player and avoid paying the luxury tax on his salary.

The teams asked for the rule as part of the collective bargaining agreement, and it gives teams a unique opportunity to save money now and in the future that could be better spent on bringing in players.

But now that they have it, most teams, it appears, will shun the opportunity, including several teams in danger of paying the luxury tax this season and in future seasons.

Here is our team-by-team report, based on conversations with a number of team executives, that reveals what each team is expected to do, and what each team should do.

Note: Salaries are estimated numbers, as of the morning of July 25, based on committed payroll and updated to reflect recent agreements on free agents and trades. Salaries in red denote teams that are expected to have to pay the luxury tax (expected to start at between $60-64 million) for next season.



[font=Arial, Helvetica, sans-serif]The Allan Houston Rule: Team-By-Team Analysis[/font]TeamSalariesPotential cutsAtlanta Hawks$25MNoneThe Hawks don't have a lot going for them right now. However, one thing they do have is an absence of bad contracts. GM Billy Knight has done a good job of stripping the books of any long-term deals. They have zero use for the amnesty rule.

Boston Celtics$51MMark BlountThe Celtics have two pretty bad contracts on the books and are dangerously close to paying the luxury tax. Raef LaFrentz has the worst contract, with four years, $47 million remaining on his deal. However, he still a productive player when he's healthy. Blount signed a six-year deal at the mid-level last summer, and it immediately looked as though the Celtics had made a mistake. He was a major disappointment and the Celtics could use relief from the five years, $33 million remaining on his contract. Dumping Blount would be admitting an expensive mistake, but it could also free up the Celtics to spend more money down the road.



Charlotte Bobcats$25MNoneGM Bernie Bickerstaff has kept the Bobcats' payroll thin so they'll have big cap room going into summer 2006. The Bobcats have zero bad contracts on their books and no real use for the amnesty rule.

Chicago Bulls$36MNoneGM John Paxson has done a great job of getting the Bulls' books in order. The Bulls should have major cap room in 2006 if they don't go hog wild re-signing Eddy Curry and Tyson Chandler this summer. They don't have any bad contracts left on the books and won't need to use the amnesty clause.

Cleveland Cavaliers$46MEric SnowThis is a tough one. The Cavs' payroll is under control, but they do have a bad contract they could dump. Snow has four years, $25 million left, and his talent doesn't justify that. Then again, he is the Cavs' only point guard, is a solid veteran presence and still can play defense. If the Cavs aspire to make a run at a championship this year, dumping Snow wouldn't be smart. However, if the team wants maximum flexibility in the future, he would be worth cutting.

Dallas Mavericks$88MMichael FinleyOwner Mark Cuban loves Michael Finley, but he might have little choice but to waive him. The Mavs are hopelessly over the luxury tax threshold and could save as much as $51 million in tax penalties by letting him go. Cuban was a carefree spender his first few years in the league, but he has gotten more conservative lately. As good as Finley has been, there's no way he's worth the extra $51 million in taxes. Look for Finley to be the most sought-after amnesty-rule casualty.

Denver Nuggets$44MEduardo NajeraThe Nuggets made a slight misstep in February when they traded the expiring contracts of Nikoloz Tskitishvili and Rodney White for Najera. Not only did his contract prevent them from getting far enough under the cap to make a run at a top free agent, it also could hurt them down the road as they continue to make forays into the free-agent market. Najera's a nice hustle player, but he's not really worth the three years, $13 million he has left on his contract. I'm not sure the Nuggets will waive him, but they probably should.

Detroit Pistons$54MNonePresident Joe Dumars has done a great job of keeping a winner on the floor without overpaying for players. The only contract on the books that could be considered bad is Rasheed Wallace's. Wallace is due $50 million over the next four years, and with Larry Brown's leaving the Pistons, it's unclear whether Wallace will continue to stay under control. Still, it's highly unlikely that the Pistons would waive Wallace, and given their cap position the next few seasons, they probably don't have to.

Golden State Warriors$56MAdonal Foyle or
Derek FisherThe Warriors look as though they're on the cusp of being a playoff team, but a couple of rookie mistakes by GM Chris Mullin might come back to haunt them. Mullin gave huge deals to Foyle and Fisher last summer. Foyle has four years, $35 million left on his contract. Fisher has five years, $32 million left on his. Although both players provide a veteran presence on a young roster, they can't produce at the rate they're getting paid. If the Warriors are going to avoid future luxury tax problems and retain some flexibility to use their mid-level exception down the road, they'll need to swallow their pride and let one of these players go this summer. Look for it to be Fisher. Although he was more productive than Foyle last season, his contract is longer and the Warriors need him less.

Houston Rockets$59MClarence Weatherspoon or Juwan HowardThe Rockets have done a good job of ridding their team of bad long-term contracts. Only two, Weatherspoon's (1 year, $6.4 million) and Howard's (four years, $26.5 million), remain on the books. Given their current tax situation, the Rockets could just dump Weatherspoon and be done with it. As it stands the Rockets will be under the cap next season. But long term, they need to seriously consider Howard. With Yao Ming entering extension talks soon and the recent signing of Stromile Swift, they might want to get Howard's contract out of the way to facilitate a large payroll bump in the coming years.

Indiana Pacers$78MAustin Croshere or
Reggie MillerThe Pacers are a small-market team with a large-market payroll. They certainly have an excuse to take advantage of the amnesty rule. Croshere is the most obvious candidate. He has two years, $15.2 million on his contract and hasn't lived up to expectations. However, team president Larry Bird loves Croshere and the Pacers have made it clear that they're going for a title this summer. Dumping a player, even a role player, doesn't necessarily fit with that goal. The team also could choose to dump Reggie Miller's contract -- since he's retiring anyway. But the savings would be much more modest with that move.

Los Angeles Clippers$40MNoneGive Donald Sterling some credit for being a cheapskate. When you hardly ever sign free agents (including your own), and seldom trade for a big contract, you don't have too many bad deals on the books, and you don't pay the luxury tax.

Los Angeles Lakers$69MBrian GrantThe Lakers are another year away from getting big-time cap/tax relief, but you can expect owner Jerry Buss to start the party early. Grant didn't play a big role in L.A. last season and isn't worth the two years, $30 million left on his contract. Given that the Lakers are already in luxury tax land, and they've brought in Kwame Brown and rookie Andrew Bynum to patrol the paint, this one seems to be a slam dunk.

Memphis Grizzlies$65MBrian CardinalOwner Michael Heisley wants the team to start trimming the payroll. The Grizzlies can get under the luxury tax threshold by doing nothing this summer. Unfortunately for Grizz fans, that means letting three important role players -- Stromile Swift, Earl Watson and Bonzi Wells -- walk out the door. Still, the Grizzlies might need to swallow their pride and let Cardinal walk, as well. The five-year span (totaling $29 million) left on his contract is too much to bear and takes away any cap flexibility the Grizzlies might have for future signings. Cardinal is a great asset at 1 or 2 million a year, but not at 6 million apiece.

Miami Heat$63MNoneYou'd think the Heat would dump Eddie Jones and the two years, $30 million left on his contract. Although Jones is still productive, cutting him would provide great savings and flexibility to keep spending. However, the Heat are determined to make a run at an NBA title this coming season. With Shaq not getting any younger, the window is closing. Jones might not be earning his paycheck these days, but he's an integral part of the team. Pat Riley insists that the Heat won't waive him, luxury tax be damned.


Milwaukee Bucks$57MCalvin BoothGM Larry Harris went on a spending spree this summer. Once you factor in the new contracts for Michael Redd, Bobby Simmons, Dan Gadzuric, Andrew Bogut and possibly Zaza Pachulia, the Bucks will be looking at a payroll that comes very near the luxury tax threshold. If the team wants to retain any flexibility, it'll dump the two years, $13 million of Booth's contract. He is unnecessary, given the pieces the Bucks have acquired, and could save them a tax payment next season should the team decide to add another player with the mid-level exception.

Minnesota Timberwolves$58MTroy HudsonMinnesota is trying its best to trade away Sam Cassell and Hudson. Cassell shouldn't be too hard to move, being in the last year of his deal and still productive (though temperamental). No team, however, wants to pay the $29 million (for five years) left on Hudson's deal. That puts the Timberwovles in a quandary. Given their problems at the point, they probably need Hudson. But he's so overpaid as a backup that the team is likely to invoke the luxury tax if it spends any more money. This one is really a toss-up.

New Jersey Nets$59MNonePresident Rod Thorn and GM Ed Stefanski have done a great job assembling the Nets and doing it in a cost-conscious way. They wisely resisted the temptation to pay Kenyon Martin the max and now have landed a better player (Shareef Abdur-Rahim) for half the cash. The truth is that the Nets have no bad deals on the books and therefore no use for the amnesty rule.

New Orleans Hornets$37MNoneThe Hornets are well under the cap and don't need to take advantage of the rule. The closest thing they have to a bad contract is the two years, $16 million left on P.J. Brown's contract. However, Brown is veteran role model and a local celeb who is providing solid production, so look for them to keep him around.

New York Knicks$120MAllan HoustonWell, it's called the Allan Houston rule. However, we could call it the New York Knicks rule -- because most of the roster Isiah Thomas has assembled needs to be discarded under the amnesty provision. Though, to be fair, Thomas didn't sign Houston to his monstrous contract. By waiving Houston, the Knicks will save $40 million in luxury tax fees over the next two years. We'll see whether they use it wisely.

Orlando Magic$73MDoug ChristieChristie was one of former GM John Weisbrod's biggest missteps. The Magic needed Cuttino Mobley more than they realized, and Christie didn't want to play in Orlando. He has asked for a trade. The problem is that no one is beating down the door to pay him $8.2 million next season. The Magic will be taxpayers next year, and the $8.2 million in savings will be worth losing Christie. There's talk that Grant Hill would be a more financially prudent way to go, given that the Magic could save $32.5 million in tax penalties by waiving him. The problem is that fans and the media would stage a revolt. And after years of rehabbing a bad ankle, Hill is finally earning his salary.

Philadelphia 76ers$82MAaron McKieTheir payroll is already out of control and they added another $16 million by agreeing to terms with Samuel Dalembert, Kyle Korver and Willie Green in free agency. That puts gives them a payroll of nearly $82 million. Chris Webber has a terrible contract. He has 3 years, $62 million left and no one believes he's going to be able to earn it. However, the Sixers just traded for him in February and with new head coach Mo Cheeks running the show, they believe they'll be able to get some value out of Webber for the next couple of years. McKie was once a solid role player, but he's way past his prime. He turns 33 in October, and there's no way the Sixers can justify keeping the three years, $20 million left on his contract on the books. The team would save $20 million in luxury tax penalties by letting him go.

Phoenix Suns$52MHoward Eisley
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The Suns bought out Eisley's contract at the start of last season and still owe him $5.6 million in 2005-06 and 162,660 in 2006-07. Under the amnesty rules, the Suns would be allowed to apply for amnesty for Eisley's contract, even though he's no longer with the team. While the team isn't currently in danger of paying the tax, if they're forced to match a Hawks' max offer for Joe Johnson, they're looking at a potential $64 million payroll next season, which means Eisley's contract could provide some serious tax relief.

Portland Trail Blazers$55MDerek Anderson or Theo Ratliff
GM John Nash says the team has no intention of dumping Ratliff. Maybe that's because Nash signed Ratliff to a ridiculous three-year, $35 million extension last summer. With owner Paul Allen preaching fiscal responsibility and a host of young players starving for playing time, Ratliff looks like a luxury the Blazers no longer can afford. Instead, look for the Blazers to dump Anderson who, mostly because of injuries, has been a big disappointment in Portland. Dropping Anderson would save the Blazers $18 million in luxury tax penalties over the next two seasons.

Sacramento Kings$58MNoneSome will argue that Kenny Thomas and Brian Skinner are overpaid, but the truth is that neither is in serious danger of being waived. Look for the Kings to sit this one out.

San Antonio Spurs$59MRasho NesterovicThe Spurs tried to pawn off Nesterovic to the Blazers for Abdur-Rahim but look as though they're now out of luck. Given where their payroll seems to be heading, they might want to get out of the four years, $30 million left on Nesterovic's deal before it's too late.

Seattle SuperSonics$39MDanny FortsonThe Sonics are not in danger of paying the luxury tax unless they start spending like crazy for their remaining free agents. Fortson is the only guy in danger of being waived. He's an excellent rebounder who nonetheless seems to fall out of favor with every team he plays for. He has two years, $13 million left on his contract.

Toronto Raptors$56MJalen RoseThe Raptors are very close to the tax threshold, and Rose is one of the most overpaid players in the league. He's still fairly productive, but if the team continues to spend this summer, it will be tough to justify the two years, $32 million left on his contract. That said, a source in Toronto says the team is leaning strongly toward keeping him. Go figure. Instead, look for them to use Alonzo Mourning's buyout as the contract they try to get amnesty for.

Utah Jazz$49MNoneThe Jazz never have been big spenders, which keeps them off the taxpayer list this fall. They paid too much money to Mehmet Okur and Carlos Boozer, no question. But both players are productive and neither will be waived by the Jazz.

Washington Wizards$52MNoneThe Wizards have stayed out of trouble. Etan Thomas' contract is a bit excessive, but only if he can't get healthy.





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Biclops

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Thank you very much... it was a very interesting read

If Brian Cardinal is let go by Memphis, I would be really happy if the suns pursue him

He didnt shoot great last season but he is a gritty and hustle player that I wouldnt mind having off the bench

My question.. is he better suited to play SF or PF?
 

scoutmasterdave

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LOL - this article has been updated since it was originally posted to ESPN.com. Now it says Eisley might be dumped; before it said we didn't have anyone to dump. :)
 

boisesuns

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We keep talking about finley, but is there any other guys on that list you might want?
 

Chaz

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Just so I understand, this is a one shot deal for this year only?

I mean a team can't save the amnesty waive untill next season or three years from now, or can they?
 

SweetD

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SirChaz said:
Just so I understand, this is a one shot deal for this year only?

I mean a team can't save the amnesty waive untill next season or three years from now, or can they?

This year only.
 

LoganMo

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Clearly the Suns need to pick up Danny Fortson; at least then Ginobili's falls will be legitimate.
 

Joe Mama

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Anybody read Chad Ford's list of whether or not each team should use the amnesty rule? It's as if he thinks that it affects the salary cap.

Joe Mama
 

playstation

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so to use the amnesty on eisley is akin to making sure the buyout we paid him will not cost us more than we initially signed up for, yes?
 

George O'Brien

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Joe Mama said:
Anybody read Chad Ford's list of whether or not each team should use the amnesty rule? It's as if he thinks that it affects the salary cap.

Joe Mama

I had the same reaction. The only guys I think are sure to get dumped are Alan Houston, Brian Grant, Michael Finley, someone on the Pacers (Croshere?), and someone on the Sixers (Mashburn?). Other teams that are likely to be dumping guys include the Magic and the Kings.

If everyone had a chance to dump one contract from the cap, there would be 25 guys on the market.
 

Ryanwb

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The Sonics probably wish this rule existed when Jim McIllvane signed that 6 year $33 million contract. He was so bad that he made Joe Klein look mobile
 

thegrahamcrackr

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Ryanwb said:
The Sonics probably wish this rule existed when Jim McIllvane signed that 6 year $33 million contract. He was so bad that he made Joe Klein look mobile


Of course back then there wasn't a luxury tax so the rule wouldn't do anything for them :p
 

coloradosun

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So Eisley's contract can be removed from luxury considerations, that is good news. If the cap is 51M and our contracts amount to what they say 64M, Eisleys 5.6M salary will be removed knocking the number down to 58.5M. at that point the Suns would be 7.5 over the cap and will have pay 7.5 in luxury, basicly 2M over where they would be any way.This is just going off the numbers in their article.
 

AsUdUdE

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Looking at the list... There are a few players that would look GREAT in a suns uniform... IMO.....

The suns have a lot going for them, and they picked a great time to have the most exciting team and POINT GUARD in the League. I have devided my list into Long Shots, Toss ups, and Probables, on how likely it is they will be in a suns uniform come next October...

Long Shot:
Jalen Rose- If and thats a HUGE IF, he is cut, The suns should do whatever it takes to go after this guy..... 18.5 PPG, on 45% shooting. I remember watching the Best Damn Sports Show Period, and they had Rose on, and He talked about sitting back and watching the suns play, and how he admired it, and wished he would play the same way.... now I know every NBA player says that... but he continued to pimp the suns, and said they were the team he was rooting for the most, But... he prolly won't be released in reality, but we can still dream.

Juwan Howard- A tough backup PF, who can run the floor pretty well, who could come in and provide depth and a veteren pressance to the locker room. He isn't anything fancy, but IF the rockets part ways, he would be a GREAT fit with the suns.

Theo Ratliff- He is on the top of my list, even above finley if he is waived.... He would give us with Defensesive tenasity, and would provide a HUGE spark off the bench... with the offensive firepower we have in the swing positions, he wouldn't be an offensive liabitity, and would help everyone on the team become a tougher defender....Im convinced when you have a great Defensive player, he can inspire a team to play that way... and that is what Ratliff would bring to the Suns..

Toss ups

Derek Fischer- This would be an interesting pick up for the suns.... he has a good shot, and sees the court well. He would be a GREAT back-up guard, that could let us use Barbs as a combo guard, and let Nash actually rest during games. Fisher has been in big games, and played with Big Time players, he knows what it takes to win a Championship, and would bring that to the Suns. A back-up PG , with veteran pressance and mutliple Championships seems like a dream fit and would be a great 3rd choice behing Finley and Ratliff.

Mark Blount- ok perhaps Blount is not worth the contract he got last summer (and I know there were more than a few of us whether we admit it or not, were hoping the suns went after this guy with a good contract last summer),
but he still produced almost 10 PPG and 5 RPG on 52 % shooting. He is still a legit 7"0 250, and can run the floor fairly well. He is light years ahead of Hunter on the offensive end, though he may not be as good of a defender, if it came down to it, I would take Blount ahead of any other Big man available not named Theo. He would provide depth, and a scoring touch off the Bench, and with the styled we play could come in for either Kurt or Amare, and have a decent season. He is a player that IF waived, I could see us getting him with our 1.7 LLE, if we pursued him hard! He is my Fourth Choice.


Allan Houston- Well It is pretty clear he will be waived, the question is where will he go? The suns would be a GREAT fit IMO. Houston has a history of Health promblems, but with the suns so stacked at the swing postion, getting hurt wouldn't affect us as much as it would other teams in the League. He shot a a good percentage from three point land (39%), and would again proivide a veteran pressance. A lot of other teams may be scared off by so many injuries, but for the suns because of the depth, he would be a great fit and improve our team (when he is healthy), He would be my 5th option.

Probables:

Michael Finley- When I say probable, I mean he would make the most sense, AND has a good chance of coming. Finley is loved by this town, he is Loved by Steve, he is LOVED by the orginzation, and he would be appriciated here (something he felt hurt by in last years playoffs, he said he doesn't feel appriciated after all he had done for that organization). I don't see why the suns wouldn't offer him whatever he wants (when it comes to PT) because he is better than bell, and IMO better than JJax. He use to be a GREAT defender, (I don't know how he has done as of late) and still ranked in the top 16 in the League in 3 point percentage this past year. He is tough, and tremndous team leader. With him on board we could be lighting quick and have a better starting 5 than last year (though for the record I think we will start Kurt) and one of the deepest benches in the League. To me its a no brainer... if Finley shows interest you do what it takes to bring him on board for the next three years and you worry about PT later..Another point why it would be important to jump on and sign him, is then he wouldn't sign with the Spurs or Detroit, because the last thing we need is for either one of those teams to get a proven scorer.....Just a thought there....... But overall, Finley is my A#1 probable choice, But I would but elated with any one of these players on the list...

Thoughts?
 
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coloradosun

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My preference would be for Ratliff as well. The Portland GM sayes he will not use the amnesty on Theo though.

One scenerio that would make sense for a young team like the Blazers is to maybe make a play at Stephan Hunter then release Theo. He and Pryzbilla would be a better to build with than an aging Ratliff.
 

Chaz

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coloradosun said:
So Eisley's contract can be removed from luxury considerations, that is good news. If the cap is 51M and our contracts amount to what they say 64M, Eisleys 5.6M salary will be removed knocking the number down to 58.5M. at that point the Suns would be 7.5 over the cap and will have pay 7.5 in luxury, basicly 2M over where they would be any way.This is just going off the numbers in their article.


The luxary tax threshold is higher than the salary cap it I am not mistaken.

You can be over the salary cap but not have to pay luxary tax.
 

coloradosun

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SirChaz said:
The luxary tax threshold is higher than the salary cap it I am not mistaken.

You can be over the salary cap but not have to pay luxary tax.

Isn't the luxury tax the cap number plus the MLE.
 

Chaz

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coloradosun said:
Isn't the luxury tax the cap number plus the MLE.


I am not sure but 60+ million sounds familiar.

Isn't there some other calculation about the percentage of revenue or something as to whether or not the luxary tax even goes into effect?

Maybe I am confusing terms of the luxary tax with the player escrow account.


I thought the threshold was quite a bit over the cap.
 

coloradosun

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SirChaz said:
I am not sure but 60+ million sounds familiar.

This article had the Suns at 64m, I just read another that estimated the Sun at 62M. Either way the Eisley's contract gives them relief and Chad Ford even stated that the Suns would use it in todays Suns Insider.
 

Chaz

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coloradosun said:
This article had the Suns at 64m, I just read another that estimated the Sun at 62M. Either way the Eisley's contract gives them relief and Chad Ford even stated that the Suns would use it in todays Suns Insider.


I am not sure about the new CBA but the old luxury tax was based on revenues league wide as calculated at the end of the season.

Until the season is over it would be impossible to tell what the luxury tax threshold will be.
 

Joe Mama

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The luxury tax for this season is being projected at $61-62 million. It's figured by calculating some percentage of the basketball related income for the season.

If the Phoenix Suns max out Joe Johnson, use the rest of their exception money, and of course signed Bell they'll be flirting with that luxury tax this year. They would probably be around $64 million. Dumping Howard Eiseley using the amnesty rule seems like a no-brainer. They definitely will not be paying the luxury tax at that point.

Next season his contract is off the books anyways. However that's when they will likely be over the luxury tax limit.

Joe Mama
 
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Chaz

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Joe Mama said:
The luxury tax for this season is being projected at $61-62 million. It's figured by calculating some percentage of the basketball related income for the season.

If the Phoenix Suns max out Joe Johnson, use the rest of their exception money, and of course signed Bell they'll be flirting with that luxury tax this year. They would probably be around $64 million. Dumping Howard Eiseley using the amnesty rule seems like a no-brainer. They definitely will not be paying the luxury tax at that point.

Next season his contract is off the books anyways. However that's when they will likely be over the luxury tax limit.

Joe Mama

But aren't we into "next year" now?
The current luxury tax calculations would be for last season's salaries and revenues correct?

We would not know until next summer if the Suns would have to pay luxury tax for this (coming) season.


Having said all that it sure wouldn't hurt to waive the Eisley contract under the amnesty rule in any event. He is off the team anyway and it would be better to be safe than sorry.


My earlier post was to dispell the notion that 7.5 million over the salary cap means 7.5 Mil in luxury tax. The luxury tax is calculated seperately.
 

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