Salary Cap $49.5M - Luxury Tax $61.7M - FA can sign tuesday

[Bruno]

NEW YORK, July 30 – The National Basketball Association and the National Basketball Players Association today announced that a new six-year collective bargaining agreement has been ratified and signed.

As part of the agreement, the NBA also announced that the Salary Cap for the 2005-06 season is $49.5 million. The mid-level exception for the upcoming season is $5.0 million.

The new Cap goes into effect at noon EDT on Tuesday, August 2, when the league’s “moratorium period” ends and teams can begin signing free agents and making trades.

For the first time, NBA teams will know the tax level in advance for the upcoming season. For the 2005-06 season, that level has been set at $61.7 million. The 2005-06 minimum team salary, which is set at 75% of the Salary Cap, is $37.125 million.

As part of their expansion agreement, the second-year Charlotte Bobcats will have a Salary Cap and minimum team salary equal to three-quarters of the Salary Cap and minimum salary that applies to the rest of the league. The Bobcats’ Salary Cap for the upcoming season is $37.125 million and their minimum salary is $27.84 million.

The new collective bargaining agreement includes an increase in the salary cap, a lessening of the impact of the luxury tax, a decrease in the escrow withholding over the term of the deal (to 8%), and a guarantee by the league that the players will receive no less than 57% of basketball-related income (a percentage that will increase as revenue increases). The maximum length of player contracts is six years (previously seven years), and maximum annual increases in salaries have been reduced from 12½ to 10½ percent for teams re-signing their own players and from 10% to 8% for teams signing free agents.

Other key non-economic points of the deal are below:


The minimum age requirement has been increased from 18 to 19 years of age. United States players must be at least one year removed from high school AND 19 years of age (by the end of that calendar year) before entering the draft. International players must turn 19 during the calendar year of that draft.
NBA teams have the ability to assign players to the NBA Development League during their first two years in the NBA.
Players are subject to four (4) random drug tests per season and penalties for use of performance-enhancing drugs have been increased.
Players suspended for more than 12 games for on-court misconduct will be able to challenge the suspension before a neutral arbitrator.

[AFE7FATMAN]

Thanks

Do you have a link? I would like to read the agreement in its final form.

[kolko]

http://www.nba.com/news/CBA_050730.html

[Bruno]

Thanks

Do you have a link? I would like to read the agreement in its final form.

I don't know if the final form of the agreement is available.
You will find it later at nbpa.com (Player Association).

[ace3g]

I thought the MLE was suppose to increase this offseason?

[Kori Ellis]

I thought the MLE was suppose to increase this offseason?

It did. It went from 4.9 to 5.0M.

[timvp]

Finally.

Let the ball begin to roll.

[ace3g]

well alot of people here thought it was going to be around 5.2-5.4 million I thought; so how much of the MLE will we have left after signing oberto based on the figures we were give of his contract

[Kori Ellis]

well alot of people here thought it was going to be around 5.2-5.4 million I thought; so how much of the MLE will we have left after signing oberto based on the figures we were give of his contract

It depends on what kind of raises Oberto got. If he got 8% (he could have got less) then his contract should start out around 2.3M and there should be about 2.7M left.

[ace3g]

thanks kori

[AFE7FATMAN]

I don't know if the final form of the agreement is available.
You will find it later at nbpa.com (Player Association).


Thank You

[T Park]

Finally!!!

[JUUOT]

i am leaving for a long week end going camping. so please hold any news until tuesday morning :lol

i would not want to come back with spurs roster filled... :rolleyes
have a nice one all.

[WalterBenitez]

So

We are under the cap (no problem), any other consequences to SA?

[ChumpDumper]

Actually we are very close to the luxury tax threshold and could go over it if we use the rest of our exceptions and/or resign Devin.

It's great that the threshold is known beforehand now. I assume it's based on the same projections as the cap. Much easier to plan now.

Any word about the past season's actual revenues or tax situation?

[Rick Von Braun]

It's great that the threshold is known beforehand now. I assume it's based on the same projections as the cap. Much easier to plan now.

Any word about the past season's actual revenues or tax situation? This exactly what I wanted to point out... is there a change in the methodology? I thought you could only determine the tax threshold for year X once you know the actual revenues for year X, i.e. at the end of year X, not before. The TV contract money is quite predictable, but other sources of revenue are not.

[Marcus Bryant]

So where are the Spurs at in total team payroll for 2005-06? I'm too lazy to run the #s.

[Kori Ellis]

So where are the Spurs at in total team payroll for 2005-06? I'm too lazy to run the #s.

I think we figured they were at $59M.

[BigDiggyD]

Here was my guess

Name CurrentAmount
Tim Duncan $15,845,157.00
Tony Parker $8,380,953.00
Emanuel Ginobili $7,428,938.00
Radoslav Nesterovic $6,720,000.00
Nazr Mohammed $5,500,000.00
Brent Barry $4,691,390.00
Bruce Bowen $3,375,000.00
Robert Horry $2,714,932.00
Fabricio Oberto(MLE) $2,314,815.00
Beno Udrih $904,800.00
$57,875,985.00


This years luxury tax was computed using the estimated BRI just like the cap which is a change from years past. 61.7 million is at the upper end of what people had anticipated which means the NBA had a good year last year. Another big change that was rumored/thought to be part of this deal was that minimum salary players don't count against the luxury tax cap. If we spent the rest of the MLE we would still likely be under the luxury tax threshold by about a million.

Also dont forget that being over the luxury threshold this year is not as bad as in years past. Now all teams get a cut of the escrow and luxury tax earnings. Before if you went over the threshold it was a huge hit (for example 3 million over meant 3million in taxes along with losing out on 8 or 9 million in returned luxury tax and escrow money so that 3 million over became a total loss of 14 - 15 million)

[ChumpDumper]

This exactly what I wanted to point out... is there a change in the methodology? I thought you could only determine the tax threshold for year X once you know the actual revenues for year X, i.e. at the end of year X, not before. The TV contract money is quite predictable, but other sources of revenue are not.The cap itself is determined by revenue projections, so it would be relatively easy to apply the tax threshold percentages to those projections as well.

[Duff McCartney]

For the first time, NBA teams will know the tax level in advance for the upcoming season. For the 2005-06 season, that level has been set at $61.7 million.

New York Knicks $99,981,795

Dallas Mavericks $95,682,887

Damn...with their current salaries...New York will be paying 76 million in Lux Tax and Dallas will pay 67 million in Lux Tax.

Crazy shit. Currently there's 7 teams over that threshold according to hoopshype.com

[BigDiggyD]

New York Knicks $99,981,795

Dallas Mavericks $95,682,887

Damn...with their current salaries...New York will be paying 76 million in Lux Tax and Dallas will pay 67 million in Lux Tax.

Crazy shit. Currently there's 7 teams over that threshold according to hoopshype.com
Thats why they are expected to take advantage of the "I am a crybaby big market team that can't manage my money and am screwed for years to come, bail me out Stern" rule, otherwise known as the "Amnesty" rule.

I am looking forward to see how the luxury tax distributions will be divvied in the new CBA. That will go a long way in determining how far is too far to be over the luxury cap.

[ChumpDumper]

Damn...with their current salaries...New York will be paying 76 million in Lux Tax and Dallas will pay 67 million in Lux Tax.More like $38 and $34 million. Still quite the chunk of change.