Originally posted by Amir:
So here's the breakdown...
Stiffer Luxury Tax
- Beginning in the '13-14 season (this is important, we'll talk about this later), the Luxury Tax becomes a lot stiffer. It used to be that you'd pay $1 for every $1 that you were over the Luxury Tax threshold. Starting in '13-14, it'll go like this.
$1 - $5M over LT = $1.50 for every $1.00 in payroll
$5M - $10M = $1.75 for every $1.00
$10M - $15M = $2.50 for every $1.00
$15M - $20M = $3.25 for every $1.00
And it goes up another $0.75 for every $5M after that. Last year, the Lakers paid about $20M in luxury taxes. Under this new system, they would have paid about $45M. Furthermore, there's a penalty if you're in the luxury tax for 4 out of 5 years, and those ranges above are $1 more for each increment. ($2.50 for the $1 - $5M range, $2.75 for the $5M - $10M range, etc)
- They're still working out the details, but the Lakers are gonna owe about three times as much in revenue sharing as they used to.
Minimum Team Payroll
- This might sound strange, but the fact that teams have to spend at least 85% of the salary cap now (and 90% every year after this one) is bad for the Lakers. This is because it means that teams might be competing with the Lakers for lesser free agents that they might not normally be interested in. Not a huge deal, but it's not good for us.
- Tax paying teams like the Lakers can only offer 3 year deals that start at $3M per year with a max of 4.5% annual raises. Non tax paying teams start at 4 years, $5M with a max of 4.5% annual raises.
- It's still a soft cap, which means the Lakers can spend whatever they'd like to, as long as they're willing to pay.
- This helps the Lakers in two ways. First, it allows them to cut a player that's currently under contract and not have it count against their salary cap or luxury tax. Secondly, if other teams cut guys via amnesty, it frees up more available FAs for the Lakers to sign, although the NBA has instituted a waiver system where teams that are under the salary cap have first shot at those guys.
Sign & Trades are still allowed
- Dwight Howard, anyone? Starting in '13-14, teams that are $4M or more over the luxury tax won't be able to sign and trade, but they can before then just as they did in the previous CBA.
So why does this all mean that the Lakers are going to be okay?
1) The Lakers just signed a $3 BILLION local TV deal, and there's still a soft cap.
Let's put this in perspective. The Laker's local TV deal by itself accounts for 1% of the projected revenues FOR THE ENTIRE LEAGUE over the course of this CBA. Yes, we'll owe more via revenue sharing, but the lion's share of that money goes to the Lakers and the Lakers alone. The luxury tax won't be nearly as big of a hurdle as people are making it out to be. The money is gonna be there.
2) There will never be another contract like Kobe Bryant's. At least not under the new CBA.
Kobe's been signing max deals under the old CBA since '99, with 10.5% raises every year. Since he's been a max player for so long, he's all the way up to $25M this year, and he'll be over $30M when his contract ends. This puts the Lakers in an incredibly unusual position where they owe one player an amount of money that's mathematically impossible to get into again.
3) The main changes don't kick in until '13-14
Kobe's contract expires at the end of 13-14. Same is true with Gasol, Artest, & Blake. Bynum & Odom expire the year before. This isn't a coincidence. The Lakers were eyeing '13-14 as a rebuilding year anyway
. At worst, the Lakers will have a hefty luxury tax bill for one year. At the very worst.
What I think is gonna happen
We'll trade two of our big men for Dwight Howard
The two people that I know that work in the NBA have both said that Howard's made no secret about his desire to come to LA. The New Jersey rumors are interesting, but they don't matter much if that's not where D12 wants to ultimately go. I would imagine that it would be Bynum + Odom that leave in the deal, but it'll be some combination of those 3 players.
The Lakers won't use the amnesty on Artest or Walton.
They'll save it for later. More on that in a second.
Holy crap, that's a lot of money that's owed to Kobe, Howard, & Gasol in '13-14, when the stricter luxury tax rules kick in
Definitely. Kobe's gonna be 35 years old and making $30M a year. Gasol will be 33 and making $19M. Howard would be a max player as well. That'd put the Lakers at about $65M just between those 3 guys. But here's the thing. Kobe & Gasol are expiring contracts at that point. Kobe has a no-trade clause so that's a moot point, but you could get a TON of pieces in return for a $19M expiring contract. Worst case scenario, you have to use the amnesty on Gasol (this is why you don't use it on Artest or Walton). Even though Kobe will be making $30M and probably won't be nearly the player that he is now, I doubt the Lakers would amnesty him simply because he'll be too much of a box office draw. Even when he's older, he'll still put butts in the seats. Gasol doesn't.
2011-12 (Trying to win a title)
Core = Kobe (33), Pau (31), Bynum, Odom
2012-13 (Trade for D12, trying to win a title)
Core = D12 (26), Kobe (34), Pau (32)
2013-14 (Either try to win a title with Pau and pay a huge luxury tax bill, trade Pau's expiring contract for good players, or amnesty him)
Core = D12 (26), Kobe (35), Pau??? (33)
2014-15 (The New Era)
Core = D12 (27) and a TON of cap space.