Salary Cap to fall this summer? Economist Professor's view

[thegrahamcrackr]

I noticed this link hidden in one of Marc Stein's weekly writings. It is from Professor Dan Rosenbaum, who is apparently coinsidered a top authority on the luxary tax.

Some of the main points he highlights that relate to the suns:

-The suns may actually be a tax payer in worst case scenarios, but will most likely still fall under the threshhold.

-There is now a 30 percent chance of a tax next season

-The salary cap is expected to fall (according to him) which would make it harder for Phx and LAC to free up enough cap room to get a max player

-Player movement will again be restricted, with little overpaying for players. However, he expects Denver and Atlanta to get their pick of players since they can outbid most people.

Anyways, I dont know how credible he is, but it is something to read while we are waiting for these 2 months to pass.

http://www.uncg.edu/bae/people/rosenbaum/luxtax.html

 

[George O'Brien]

The article does not address the biggest impact of a return of the luxury tax - reluctance of luxury tax teams to use their MLE.

A lot of discussion about McDyess has stressed the belief he will get an offer of a full MLE. If the luxury tax returns, I'd say this would be extremely unlikely. With the luxury tax, a $5 million contract costs the team $10 million.

If his analysis is correct, the Suns most logical move would be to use their cap space in trades rather than in signing free agents.

 

[Joe Mama]

If the Phoenix Suns still end up paying the luxury tax someone needs to be shot. They gave away two first-round draft picks just to get under the luxury tax limit. The deal would still save them a little bit of money, but most of the savings were based on the idea that they would be pretty to the luxury tax disbursement. If they are over the luxury tax limit it will cost them $10-11 million of that $13 million figure they supposedly or saving by dealing Tom Gugliotta.

Joe Mama

 

[F-Dog]

If the Phoenix Suns still end up paying the luxury tax someone needs to be shot. They gave away two first-round draft picks just to get under the luxury tax limit. The deal would still save them a little bit of money, but most of the savings were based on the idea that they would be pretty to the luxury tax disbursement. If they are over the luxury tax limit it will cost them $10-11 million of that $13 million figure they supposedly or saving by dealing Tom Gugliotta.

Joe Mama

My impression was that they actually lost money on the Gugliotta deal, and the luxury tax disbursement was supposed to be $14m.

Either way, this would be a disaster if the old owners were still here, as they might try to make the money back by selling some other piece of the team.


With Sarver in charge now, the Suns' winding up over the luxury tax limit is merely bitter irony--the picks are still gone, but it shouldn't affect the team's decision-making in the future.