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View Full Version : Question about salary cap/luxury tax...



sp1derm00
07-02-2010, 04:03 PM
As much as I like Luke Walton, I don't think he will get ANY playtime if we sign Mike Miller.

My question is, since the Lakers are over the salary cap and will have to pay luxury tax for every dollar they're over the salary cap, why not just buy out Luke's contract?

Even if we bought out his contract for the full amount, whatever we owe him this year and next, it would save the Lakers from paying it.

We would then just replace Luke with some league minimum guys or rookies (caracter or ebanks?). These players get paid like $1m/yr.

So rough estimate on savings:

Luke is owed approx. $16m over the next 3 years. Lakers offer Luke a buyout for the full amount. This saves the Lakers from paying $16m in luxury taxes over the next 3 years, because we WILL be over the salary cap.

Now we need to replace Luke. Say we replace him with Caracter as a backup PF (providing we get Mike Miller). Say Caracter is paid about $4m over 3 years.

$16m-$4m = $12m

The team would save $12m over the next three years, and Mitch would be able to offer Fisher and PJ the money they deserve or spent it on other players.

Is this right? Can the Lakers do this?

lakers4sho
07-02-2010, 04:12 PM
Both sides have to agree.

Chacarron
07-02-2010, 04:14 PM
That is a good idea but like someone said both sides have to agree.

gr824
07-02-2010, 04:22 PM
As much as I like Luke Walton, I don't think he will get ANY playtime if we sign Mike Miller.

My question is, since the Lakers are over the salary cap and will have to pay luxury tax for every dollar they're over the salary cap, why not just buy out Luke's contract?

Even if we bought out his contract for the full amount, whatever we owe him this year and next, it would save the Lakers from paying it.

We would then just replace Luke with some league minimum guys or rookies (caracter or ebanks?). These players get paid like $1m/yr.

So rough estimate on savings:

Luke is owed approx. $16m over the next 3 years. Lakers offer Luke a buyout for the full amount. This saves the Lakers from paying $16m in luxury taxes over the next 3 years, because we WILL be over the salary cap.

Now we need to replace Luke. Say we replace him with Caracter as a backup PF (providing we get Mike Miller). Say Caracter is paid about $4m over 3 years.

$16m-$4m = $12m

The team would save $12m over the next three years, and Mitch would be able to offer Fisher and PJ the money they deserve or spent it on other players.

Is this right? Can the Lakers do this?

What makes you assume that the franchise does not have to pay LT on 'buyout' salary ? Salary is [ in almost all circumstances, including this one ] salary ... and LT applies to salary paid by teams who are over the LT threshold, NOT merely the Salary Cap ...

Vinylman
07-02-2010, 04:34 PM
What makes you assume that the franchise does not have to pay LT on 'buyout' salary ? Salary is [ in almost all circumstances, including this one ] salary ... and LT applies to salary paid by teams who are over the LT threshold, NOT merely the Salary Cap ...

exactly... all the lakers would be doing is accelerating the luxury tax payments which wouldn't make sense since walton wouldn't discount the contract much for a buyout because the contract is fully guaranteed...

also... if you are the lakers there are other issues to think about

1. if there is a lock out after next season they won't have to pay walton or the luxury tax
2. in all probability there will be another opportunity to waive overpaid players to avoid luxury taxes when the new cba occurs (ie brian grant scenario). If this happens you can be pretty sure that walton is done after this season.

The only way i can see us unloading walton is if we offer someone to take hime... pay $3 million of his salary and give up a #1 pick

sp1derm00
07-02-2010, 04:38 PM
What makes you assume that the franchise does not have to pay LT on 'buyout' salary ? Salary is [ in almost all circumstances, including this one ] salary ... and LT applies to salary paid by teams who are over the LT threshold, NOT merely the Salary Cap ...

That's why I asked. Read the title of the thread, and the last sentence of my post. I was clearly posing a question and asking if my assumptions were correct.

Thanks for clarifying.

gr824
07-02-2010, 04:44 PM
exactly... all the lakers would be doing is accelerating the luxury tax payments which wouldn't make sense since walton wouldn't discount the contract much for a buyout because the contract is fully guaranteed...

also... if you are the lakers there are other issues to think about

1. if there is a lock out after next season they won't have to pay walton or the luxury tax
2. in all probability there will be another opportunity to waive overpaid players to avoid luxury taxes when the new cba occurs (ie brian grant scenario). If this happens you can be pretty sure that walton is done after this season.

The only way i can see us unloading walton is if we offer someone to take hime... pay $3 million of his salary and give up a #1 pick

Thinking about a possible lockout and 'lost' NBA season gives me a headache, but, of course, you are right. Who would ultimately get paid what might be up in the air for years and holding onto $$$s as opposed to not having them as things get sorted out is a big advantage ...

And, if there is a new Allan Houston Rule with the revised CBA, who will it be named after [ the Luke Walton Rule ... ] ?

gr824
07-02-2010, 04:51 PM
That's why I asked. Read the title of the thread, and the last sentence of my post. I was clearly posing a question and asking if my assumptions were correct.

Thanks for clarifying.

I did read your whole post ... and I did not mean to be brusque in my reply ... Sorry if you took it that way ... :shrug:

:cool:

Vinylman
07-02-2010, 04:57 PM
Thinking about a possible lockout and 'lost' NBA season gives me a headache, but, of course, you are right. Who would ultimately get paid what might be up in air for years and holding onto the $$$s as opposed to not having them as things get sorted out is a big advantage ...

And, if there is a new Allan Houston Rule with the revised CBA, who will it be named after [ the Luke Walton Rule ... ] ?

nah ... i would have to go with the gilbert arenas rule or more likely the elton brand rule since philly is over the cap

sp1derm00
07-02-2010, 05:01 PM
I did read your whole post ... and I did not mean to be brusque in my reply ... Sorry if you took it that way ... :shrug:

:cool:

Sorry if I took your post the wrong way. I'm kinda bummed that my idea wouldn't work.

gr824
07-02-2010, 05:11 PM
Sorry if I took your post the wrong way. I'm kinda bummed that my idea wouldn't work.

Walton probably is bummed, too ... $16+ million would go a long way in his Bar-B-Q business ... :clap:

:D :D :D