Many of us were surprised when the player's association agreed to continuation of the luxury tax. Apparently their rationale was that a more liberal salary cap number was more useful than getting rid of the luxury tax. However, there seems to be little doubt that the LT is seriously altering the way teams are operating.
To a certain degree the LT's impact seems to be more than just that it adds to the cost of signing additional players. When above the LT threshhold, a contract for $2 million costs the team $4 million. But the other issue is that the extra $2 million goes to the other teams. Owners seem to resent that more than the extra cost.
Clearly the Suns are a team that has made the most dramatic moves to reduce their luxury tax by shedding $11 million in salaries at the price of three draft picks. At the same time, the Spurs gave up the rights to the best big man in Europe to unload Jackie Butler's $2.38 million contract. LT may have been the motive of the Warriors when traded Jason Richardson.
On a league wide basis, the impact of the LT is not revealed by what teams are doing, but what they are not doing. In particular, some teams are resisting big contracts and some are not using their mid level exemption due to the LT.
The clearest example is Boston. They have almost no bench and the bulk of their MLE, but are only looking at guys for minimum contracts because they are already above the threshhold. Cleveland is having a hard time re-signing two keys to last season's team due to trying to avoid the LT.
As a rule, the Knicks and Mavericks just don't care. But most do and it is only when they feel they have no choice that they dip inot the LT. An example is Denver who signed Chucky Atkins for $3.2 million and is second only to the Knicks in LT.
However, the number of teams that are sitting just below the threshhold shows the impact is real. (Numbers from Hoopshype)
Detroit - $64.2 million
Cleveland - $64.9 million (before signing their own guys)
Houston - $64.7 million (does not include Hayes, Francis, and Scola)
Indiana - $66.7 million
Clippers - $61.9 million (does not include Knight)
Lakers - $62.9 million (does not include Fisher and Mihm)
Miami - $67.0 million (does not include Smush Parker)
Minnesotat - $68.7 million
New Jersey - $65.4 million
Philadelphia - $68.4 million
Portland - $65.4 million (does not include Blake)
Washingto - $63 million (does not include Blatche)
Some of these teams are into the mid $60's only after using the MLE, so the LT did not limited them. But some teams are remarkably quiet. The LT seems to be having a real effect on the second and third tier free agency market.
To a certain degree the LT's impact seems to be more than just that it adds to the cost of signing additional players. When above the LT threshhold, a contract for $2 million costs the team $4 million. But the other issue is that the extra $2 million goes to the other teams. Owners seem to resent that more than the extra cost.
Clearly the Suns are a team that has made the most dramatic moves to reduce their luxury tax by shedding $11 million in salaries at the price of three draft picks. At the same time, the Spurs gave up the rights to the best big man in Europe to unload Jackie Butler's $2.38 million contract. LT may have been the motive of the Warriors when traded Jason Richardson.
On a league wide basis, the impact of the LT is not revealed by what teams are doing, but what they are not doing. In particular, some teams are resisting big contracts and some are not using their mid level exemption due to the LT.
The clearest example is Boston. They have almost no bench and the bulk of their MLE, but are only looking at guys for minimum contracts because they are already above the threshhold. Cleveland is having a hard time re-signing two keys to last season's team due to trying to avoid the LT.
As a rule, the Knicks and Mavericks just don't care. But most do and it is only when they feel they have no choice that they dip inot the LT. An example is Denver who signed Chucky Atkins for $3.2 million and is second only to the Knicks in LT.
However, the number of teams that are sitting just below the threshhold shows the impact is real. (Numbers from Hoopshype)
Detroit - $64.2 million
Cleveland - $64.9 million (before signing their own guys)
Houston - $64.7 million (does not include Hayes, Francis, and Scola)
Indiana - $66.7 million
Clippers - $61.9 million (does not include Knight)
Lakers - $62.9 million (does not include Fisher and Mihm)
Miami - $67.0 million (does not include Smush Parker)
Minnesotat - $68.7 million
New Jersey - $65.4 million
Philadelphia - $68.4 million
Portland - $65.4 million (does not include Blake)
Washingto - $63 million (does not include Blatche)
Some of these teams are into the mid $60's only after using the MLE, so the LT did not limited them. But some teams are remarkably quiet. The LT seems to be having a real effect on the second and third tier free agency market.
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