Whenever a team sign a player or do a trade, there aren't only basketball considerations but also financial considerations. Only the basketball side matters for fans but if you want to understand moves made and have an idea about what moves will be done, you had to look at the financial side.
Basketball is the Yang, money is the Yin.
Spurs 09-10 salaries :
Players with a guaranteed salary :
Spurs have 15 players with a fully guaranteed contract.
Salaries for these 15 players are :
Tim Duncan: $22,183,220
Richard Jefferson: $14,200,000
Tony Parker: $12,600,000
Manu Ginobili: $10,728,130
Antonio McDyess: $4,500,000
Roger Mason: $3,780,000
Matt Bonner: $3,256,500
George Hill: $1,081,680
Ian Mahinmi: $989,670
DeJuan Blair: $850,000
Keith Bogans: $825,497 (he also get $207,845 from the league)
Malik Hairston: $736,420 (cost $825,497 against the tax)
Alonzo Gee: $150,000
Garrett Temple: $111,000 (cost $111,685 against the tax)
Curtis Jerrels: $59,217 (cost $106,829 against the tax)
Marcus Haislip: $462,808 (bought out)
Michael Finley: $1,882,353 (bought out)
Curtis Jerrells: $75,000 (waived, his contract was $75K guaranteed)
Cedric Jackson: $26,917 (10 days contract, cost $48,559 against the tax)
Garrett Temple: $26,917 (10 days contract, cost $48,559 against the tax)
Marcus Williams: $25,000 (waived, his contract was $25K guaranteed)
The total salary for these 15 players is $78,550,359 ($78,730,987 against the tax)
Spurs 10-11 salaries :
Players with a guaranteed salary :
Spurs will have 6 players with a fully guaranteed contract and without team or player options.
Salaries for these 5 players are :
Tim Duncan: $18,835,381
Tony Parker: $13,650,000
Manu Ginobili: $11,854,584
Antonio McDyess: $4,860,000
DeJuan Blair: $918,000
George Hill: $854,389
The total salary for these 6 players is $50,972,354
Players with a player option:
Richard Jefferson has a early termination option with a salary of $15,200,000.
Players with a partially or non-guaranteed salary:
Malik Hairston has a $854,389 fully non-guaranteed salary for 2010-2011.
Curtis Jerrels, Alonzo Gee and Garrett Temple have a $762,195 fully non-guaranteed salaries. Gee's contract becomes $100K guaranteed on July 1st, $200K guaranteed on November 25th and $300K guaranteed on December 20th.Temple's contract becomes $35K guaranteed on July 1st, $110K guaranteed on August 5th.
These 4 players contracts are a great trade asset for the 2010 summer.
We can expect that Jefferson won't opt out. In this case, Spurs payroll will be $66.2M for 7 players.
The Luxury Tax:
What is the luxury tax?
The luxury tax is a mechanism whose first goal is to reduce the differences between the richest and the poorest franchises.
In Early July, the league calculates a threshold based on an evaluation of its revenue for the next season. At the end of the season, teams whose payroll is higher than the luxury tax threshold pay a dollar for each dollar above the threshold. The money given by all the taxpayers is then divided. Each team bellow the tax gets 1/30th of this money and the rest is either equally divided between all the franchises or used to help franchise(s) with serious financial troubles.
The double penalty system:
A team above the tax is two time penalized. First, they had to pay the $ for $ tax. Second, they don't get 1/30th of the luxury tax money given by NBA teams.
This system has two consequences:
- The $ for $ tax pushes teams with payroll significantly higher than the luxury tax threshold to lower their payroll.
- The redistribution system pushes teams that are just above the tax to go just under. What is problematic for a team $100K above the tax isn't the additional $100K to pay in tax but the $3M you don't get during the redistribution.
Luxury tax threshold in 09-10:
The 2009-2010 luxury tax threshold is $69.92M
Total luxury tax paid in 09-10:
This number is really important for a team close to the luxury tax level because it determines how hard they should try to stay/go under the threshold.
A team below the tax will get about $4M in redistribution this year.
Impact of the luxury tax on Spurs for 09-10:
Spurs will pay $8.7M in luxury tax for 09-10.
The Ratliff trade and buy outs for Haislip and Finley have helped Spurs to save some money. Between the luxury tax savings and the salaries not given, Spurs have saved about $3.1M with these 3 moves.
Spurs also haven't taken the cheapest road to fill the end of the roster: they have tried some players with 10 days contract and have filled the 15 roster spots. These moves have cost them about $600K.
Evaluation of the luxury tax threshold in 10-11:
The 10-11 luxury tax level will be calculated in July 2010 and based on the basketball related income in 09-10. With the economical crisis, this income is very difficult to evaluate.
In July 2009, the league sent a memo with projections of the luxury tax threshold between $61.2M and $65M.
In December 2009, people were more optimistic with $54M as projected salary cap. It means that the luxury tax threshold will be around $66M.
In April 2010, salary cap projections again raises to reach $56.1M. It means the luxury tax threshold should be at $68.4M.
Impact of the luxury tax on Spurs for 10-11:
If Jefferson picks his option, Spurs should be about $2.2M below the tax with 7 players under contract. Spurs will end up in the luxury tax territory even if they fill their roster with cheap players. The question is now: how far is the ownership ready to go into luxury tax territory?
Players under contract for 2011-2012:
5 players have contracts for 2011-2012:
- Tim Duncan with an early termination option of $21,300,000.
- Manu Ginobili with $12,981,038 salary.
- Antonio McDyess with a $5,220,000 salary. Only $2,640,000 is guaranteed until July 1st 2011. This contract could end up as a nice trade asset in June 2011.
- George Hill with a $1,540,463 salary. This year is a team option that must be picked before November 1st 2010.
- DeJuan Blair with a $986,00 salary. Only $500K are guaranteed.
Players under contract after 2011-2012:
Only Dejuan Blair and Manu Ginobili are under contract in 2012-2013. Ginobili has a $14,107,492 salary. Blair has a $1,054,000 salary that is fully non-guaranteed until November 1st 2012 and becomes fully guaranteed after that.
What can we say about that:
It's nearly impossible to draw some conclusions give that it is in more than 2 years and that the CBA will change in 2011.
Spurs will likely enter in a rebuilding cycle soon so not having too much long term contracts is a good thing.
PS: Salaries numbers comes from ShamSports. Thanks to Sham for his great work.