Luxury tax - what luxury tax?

[MFFL]

Here's the link

Fear factor
Luxury tax worries may have been a bit premature
Posted: Friday February 15, 2002 3:49 PM
Updated: Saturday February 16, 2002 11:55 PM

Remember all the consternation this summer over the upcoming luxury tax?

Fearful of having to pay a dollar-for-dollar tax if its team payroll exceeded a certain threshold, many NBA clubs chose to stand pat rather than bid on free agents. Even contenders like the Heat, Suns, Celtics, Bucks and Lakers passed up deals to improve their roster out of luxury tax fears.

Now it turns out, according to several league sources, there probably won't be a luxury tax this season after all. Because of some surprising attendance boosts (thank you, Michael Jordan), the NBA will likely take in more revenue than it expected. As a result, the players' aggregate share of salaries probably won't exceed 61.1 percent of defined league revenue, the threshold required to trigger the luxury tax.

"Call it the Michael Jordan Effect," one GM said. "Right now it looks like nobody is going to have to pay it."

Just because the luxury tax probably won't come into play this season, however, doesn't mean we'll see more trades and free agent signings in the summer of 2002. With several big-ticket contracts set to kick in next season (Vince Carter, Antawn Jamison, Paul Pierce, et al.) and other big-name players already having built-in raises at 10 percent or higher, it is all but certain that the luxury tax will kick in next year.

[grbh]

I wonder how many owners are kicking themselves. Mason is looking better and better isn't he

[madape]

Yeah, we heard a lot about Mason in the off-season. Many on this board thought he'd be a good fit here in Dallas. However, his numbers haven't been great. 10.8 points and 10.5 boards per 48 minutes. To put those stats in perspective, there are seven players on the Mavericks that are rebounding at a better clip... incuding Howard (11.4), Eschmeyer (15.1), and Bradley (10.9). Just thought that was interesting.

[MFFL]

<< I wonder how many owners are kicking themselves. >>



The owners are LOVING IT! The luxury tax is acting as a hard salary cap which is controlling the payrolls. A few years ago the salaries were incredible - Garnett and Juwan are examples of that. Now the owners have fiscal control again plus the players have to kick in 10% of their salary into an escrow for the owners.

[grbh]

the owners really took the players with the 10% escrow. Not that I feel sorry for the players. I am still amazed they took it. Imagine the CEO walks into your office on Monday morning and says &quot;Inlight of the oncreasing salaries in our office the 2003 payroll will be changed. All employees will receive raises, but 10% of your salaries will come back to me. Everyplace I have worked this idea would incite a riot.