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Success changes Sarver's mind on luxury tax
Paul Coro
The Arizona Republic
Oct. 21, 2006 12:00 AM
The Boris Diaw contract negotiations were so amicable that both sides think they won.
But in keeping Diaw for $45 million over five years, was it a Pyrrhic victory now that Suns salaries will be piling high above the luxury-tax threshold for the 2007-08 season?
The Suns' 2007-08 payroll projects to be nearly $78 million with the 10 current players whose deals are guaranteed for that season and three 2007 first-round picks to potentially add. That would be $9 million to $11 million above the luxury-tax threshold, depending on who is projecting.
The Suns would have to pay that excess as a tax and lose the money that every team - with the likely exceptions of the Suns and Dallas - would receive as a luxury-tax payout.
"As long as we're creating success and we're winning and we keep improving and the fans keep supporting us, there's no hard and fast line that says how much you have to spend or what you can't spend or will you spend the tax or will you not spend the tax?" Suns Managing Partner Robert Sarver said. "To me, it's more about the success we're creating and about doing it the right way with good contracts. I don't have any preconceived notion now that says we have to do this or we have to do that. We'll see how the season goes."
In summer 2005, the Suns made it clear that a high-priced player - maybe Shawn Marion - would have been dealt if they had given Joe Johnson a five-year, $70 million deal. There is none of that talk this time, even with extensions for Leandro Barbosa (five years, $33 million) and Diaw changing their combined salary-cap number from about $3.5 million this season to more than $14 million next season.
Marion, Amaré Stoudemire, Steve Nash, Kurt Thomas and Diaw will make about $58 million next season. But at least Howard Eisley finally comes off the books in the summer.
Because the Suns' business side with sponsorships and ticket sales has been so strong, the front office no longer flinches at the price tag.
"Our situation moving forward is one that's going to be dictated by our results and success," Suns Vice President of Basketball Operations David Griffin said.
The luxury threshold is not taxed until the February trade deadline. If Phoenix needed to move a player, it would not have to do so for another 16 months. Thomas already surfaced in trade talks. He - with an $8 million salary - would be a candidate due to a contract that expires next year.
Dealing with the idea of Johnson's contract, front-loaded with a $20 million payment last November, is certainly different from the current scenario. It seems like a championship, or at least an NBA Finals trip, would cure all.
"We're in a solid state financially," Sarver said. "I think we've made some good moves. Most importantly, we've put our money in people that we have a lot of confidence in. We have good contracts. To me, it hasn't been so much about the total amount of money we spend. It's, 'Are we spending it in the right place, do we have the right contracts, do we have some flexibility and do we have the ingredients that together can win us a championship?'
Success changes Sarver's mind on luxury tax
Paul Coro
The Arizona Republic
Oct. 21, 2006 12:00 AM
The Boris Diaw contract negotiations were so amicable that both sides think they won.
But in keeping Diaw for $45 million over five years, was it a Pyrrhic victory now that Suns salaries will be piling high above the luxury-tax threshold for the 2007-08 season?
The Suns' 2007-08 payroll projects to be nearly $78 million with the 10 current players whose deals are guaranteed for that season and three 2007 first-round picks to potentially add. That would be $9 million to $11 million above the luxury-tax threshold, depending on who is projecting.
The Suns would have to pay that excess as a tax and lose the money that every team - with the likely exceptions of the Suns and Dallas - would receive as a luxury-tax payout.
"As long as we're creating success and we're winning and we keep improving and the fans keep supporting us, there's no hard and fast line that says how much you have to spend or what you can't spend or will you spend the tax or will you not spend the tax?" Suns Managing Partner Robert Sarver said. "To me, it's more about the success we're creating and about doing it the right way with good contracts. I don't have any preconceived notion now that says we have to do this or we have to do that. We'll see how the season goes."
In summer 2005, the Suns made it clear that a high-priced player - maybe Shawn Marion - would have been dealt if they had given Joe Johnson a five-year, $70 million deal. There is none of that talk this time, even with extensions for Leandro Barbosa (five years, $33 million) and Diaw changing their combined salary-cap number from about $3.5 million this season to more than $14 million next season.
Marion, Amaré Stoudemire, Steve Nash, Kurt Thomas and Diaw will make about $58 million next season. But at least Howard Eisley finally comes off the books in the summer.
Because the Suns' business side with sponsorships and ticket sales has been so strong, the front office no longer flinches at the price tag.
"Our situation moving forward is one that's going to be dictated by our results and success," Suns Vice President of Basketball Operations David Griffin said.
The luxury threshold is not taxed until the February trade deadline. If Phoenix needed to move a player, it would not have to do so for another 16 months. Thomas already surfaced in trade talks. He - with an $8 million salary - would be a candidate due to a contract that expires next year.
Dealing with the idea of Johnson's contract, front-loaded with a $20 million payment last November, is certainly different from the current scenario. It seems like a championship, or at least an NBA Finals trip, would cure all.
"We're in a solid state financially," Sarver said. "I think we've made some good moves. Most importantly, we've put our money in people that we have a lot of confidence in. We have good contracts. To me, it hasn't been so much about the total amount of money we spend. It's, 'Are we spending it in the right place, do we have the right contracts, do we have some flexibility and do we have the ingredients that together can win us a championship?'
