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http://www.charlotte.com/mld/observer/sports/6605114.htm
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Research says teams avoiding luxury tax
UNC Greensboro professor Dan Rosenbaum is a nationally recognized expert on the NBA's luxury-tax system. Based on research he has done to project league-wide revenues and player salaries, he strongly doubts the luxury tax will be triggered in the summers of 2005 and 2006.
That's very good news for big spenders such as the Dallas Mavericks and New York Knicks, who wrote massive checks to the league as a penalty for overspending on their rosters. It's likely bad news for the Bobcats, who figured to get millions in redistribution of those funds.
The luxury tax works this way: If the NBA's total player payroll (both salary and benefits) exceeds a certain percentage of the league's basketball-related revenue (63.3 percent for the 2004-05 season), then the league's biggest spenders are assessed a "tax" on their excess. Most of that money is then redistributed to teams that did not overspend.
Rosenbaum's research suggests it's likely NBA revenues will grow and teams will manage their spending just enough to avoid triggering the luxury tax beyond the coming season.
That's not a big surprise to Tapscott.
"We had a (financial) model where a number was put in" to receive luxury-tax funds, Tapscott said. "And I challenged it because luxury tax isn't something you can count on."
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Research says teams avoiding luxury tax
UNC Greensboro professor Dan Rosenbaum is a nationally recognized expert on the NBA's luxury-tax system. Based on research he has done to project league-wide revenues and player salaries, he strongly doubts the luxury tax will be triggered in the summers of 2005 and 2006.
That's very good news for big spenders such as the Dallas Mavericks and New York Knicks, who wrote massive checks to the league as a penalty for overspending on their rosters. It's likely bad news for the Bobcats, who figured to get millions in redistribution of those funds.
The luxury tax works this way: If the NBA's total player payroll (both salary and benefits) exceeds a certain percentage of the league's basketball-related revenue (63.3 percent for the 2004-05 season), then the league's biggest spenders are assessed a "tax" on their excess. Most of that money is then redistributed to teams that did not overspend.
Rosenbaum's research suggests it's likely NBA revenues will grow and teams will manage their spending just enough to avoid triggering the luxury tax beyond the coming season.
That's not a big surprise to Tapscott.
"We had a (financial) model where a number was put in" to receive luxury-tax funds, Tapscott said. "And I challenged it because luxury tax isn't something you can count on."
