Luxury tax & Googs deal

Joe Mama

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The Phoenix Suns do not save $6.3 million in player salary this season. This season is two thirds over, so the savings are really only about $2.1 million. However the Phoenix Suns apparently included $3 million going to Utah in the trade, so they lost $900,000 before you consider the luxury tax. Let's say for simplicity sake that the Phoenix Suns saved $4 million in luxury tax penalties. After you consider the $900,000 they lost in the deal that savings is down to $3.1 million.

So with the Phoenix Suns are in fact going to save $12-13 million with this latest trade the luxury tax distribution must be $9-10 million. I have some time, so I looked up each team's salary. If the luxury tax limit is actually $55 million the following teams will be paying.

New Jersey Nets 7.75
New York Knicks 39.1
Philadelphia 2.25
Atlanta 7.25
Indiana 2.5
Toronto 6.4
Dallas 23.6
Memphis 2.4
Minnesota 17.5
LA Lakers 9.0
Portland 31.8
Sacramento 10.3

159.85

That's almost $160 million to be distributed amongst the remaining 17 teams. I'm assuming Charlotte is not eligible for the luxury tax distribution. That's $9.4 million for each team. Together with the $3.1 million the Phoenix Suns saved by not paying the luxury tax that's $12.5 million. I guess that's how it works.

Of course that's assuming that the luxury tax actually happens this season.

Joe Mama
 

newfan101

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Ok. So that's where they got the 12 million. Thanks Joe.

They sure are banking alot on the tax happening. Otherwise, the Googs deal is a loss of 1 million and 3 draft picks.
 

Yuma

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Hey, I doubt we can get Kobe, and I am not sold he is the answer to us getting to a championship, but I do recognize a good marketing deal. Kobe WILL put butts in the seats! That in itself would pay for all this rigamorole they are going through this season. :D
 

Yuma

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Since JC is the chairman on the rules comittee and a NBA front office loved guy, if anyone had inside knowledge the lauxury tax is on, it would be JC. :D
 

elindholm

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That's almost $160 million to be distributed amongst the remaining 17 teams.

I remember reading that it hasn't been made known exactly how the money gets distributed to the remaining teams. Maybe it all gets chopped up equally, but maybe it doesn't. I don't think there's anything in the language of the CBA about it. So even though the Suns' "piece of the pie" in the luxury-tax-rebate scenario is about $10 million, I don't think we know how much they'd actually receive.
 
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Joe Mama

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We might not know how the luxury tax gets distributed, but I'm pretty confident that the people who made this trade do. I also think they must be very sure that there will actually be a luxury tax this year. Otherwise the hope is they would have learned their lesson after the Cliff Robinson trade.

BTW the way I understand it there would have been a luxury tax for the last two years if Michael Jordan had not returned to the NBA.

Joe Mama
 

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