Spring Break
Economic woes hit NBA
Ben Bradea
Issue date: 2/23/09 Section: Sports
What promised to be an eventful week in the NBA did not live up to the hype as the trade deadline came and passed without any major moves.
Heading into the week, a major reason for increased talks about player movement has been the economic struggles that have infiltrated the NBA. Teams all across the league were looking to shed salary since many owners were losing money and could not afford some of the enormous contracts its players owned. To compact the problem, during the All-Star break last week, NBA commissioner David Stern commented on the current economic situation of the NBA.
"Teams know exactly what's happening," Stern told The Associated Press. "They know what their finances are. They know what the issues are. They also know that the cap is going to start coming down, and the luxury tax threshold. If you don't have a lot of high-revenue growth over the next couple of years, there may be a slowdown. But teams know the rules, and they can assess their own situations."
A luxury tax payment is required of teams where the payroll exceeds a certain "tax level" determined by a complicated formula. Teams exceeding it are forced to pay one dollar to the league for each dollar by which their payroll exceeds the tax level. The NBA had set the salary cap at $58.68 million and the luxury tax at $71.15 million for the '08-'09 season.
For example, if a team had a payroll of $76.15 million, they would be $5 million over the luxury tax threshold and would pay $5 million in tax to the NBA. Estimates say that both of those figures will drop by $3 to $4 million next year, and maybe even more after that. This is why NBA owners were shopping players with high profiles, like Vince Carter, at the deadline for almost nothing to give away his $16 million contract, yet NBA teams were reluctant to take him.
This brings me to the Blazers. Many were frustrated when the Blazers decided to stay pat on Thursday without addressing some of the major needs this team has. Yes there were rumors about bringing in a Richard Jefferson or Caron Butler to this young team, yet nothing happened.
Heading into the week, a major reason for increased talks about player movement has been the economic struggles that have infiltrated the NBA. Teams all across the league were looking to shed salary since many owners were losing money and could not afford some of the enormous contracts its players owned. To compact the problem, during the All-Star break last week, NBA commissioner David Stern commented on the current economic situation of the NBA.
"Teams know exactly what's happening," Stern told The Associated Press. "They know what their finances are. They know what the issues are. They also know that the cap is going to start coming down, and the luxury tax threshold. If you don't have a lot of high-revenue growth over the next couple of years, there may be a slowdown. But teams know the rules, and they can assess their own situations."
A luxury tax payment is required of teams where the payroll exceeds a certain "tax level" determined by a complicated formula. Teams exceeding it are forced to pay one dollar to the league for each dollar by which their payroll exceeds the tax level. The NBA had set the salary cap at $58.68 million and the luxury tax at $71.15 million for the '08-'09 season.
For example, if a team had a payroll of $76.15 million, they would be $5 million over the luxury tax threshold and would pay $5 million in tax to the NBA. Estimates say that both of those figures will drop by $3 to $4 million next year, and maybe even more after that. This is why NBA owners were shopping players with high profiles, like Vince Carter, at the deadline for almost nothing to give away his $16 million contract, yet NBA teams were reluctant to take him.
This brings me to the Blazers. Many were frustrated when the Blazers decided to stay pat on Thursday without addressing some of the major needs this team has. Yes there were rumors about bringing in a Richard Jefferson or Caron Butler to this young team, yet nothing happened.
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fazthegreat
Bookkeepers
posted 9/28/09 @ 8:23 PM PST
Salary Cap for the 2009-10 season is $57.7 million. The tax level for the 2009-10 season has been set at $69.92 million. Any team whose team salary exceeds that figure will pay a $1 tax for each $1 by which it exceeds $69. (Continued…)
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