Atlanta Journal-Cons ution: Childress leaving Hawks to join Greek franchise

[samikeyp]

But why should LeBron take a max salary when he makes more money off endorsements? If LeBron wants to win a le so bad, why doesn't he play for the vet minimum and allow the Cavs to pick up more talent with the money he'd otherwise be getting?

I agree. Also, with all the negative publicity that athlete's contracts get, think of the PR move it would be for LeBron to say "I will gladly give up more salary to win a le."

[FromWayDowntown]

How can the team "pay" a player's taxes without immediately increasing the amount of his compensation -- he's being compensated, although not directly, by the payment of the taxes -- and increasing the player's tax burden?

Basically, the club has agreed to a deal that will pay Childress a set amount and has obligated itself to keep back a certain part of that salary to cover his tax burden, leaving him with the net. That's very little different than an NBA club keeping back the basic taxes that American (and presumably, Canadian) workers have withheld from their checks. The only difference is that Euro clubs announce salary terms on a net pay basis and American clubs (seemingly) announce salary terms on a gross pay basis.

Am I getting that right?

[Findog]

I agree. Also, with all the negative publicity that athlete's contracts get, think of the PR move it would be for LeBron to say "I will gladly give up more salary to win a le."

It just rings a little hollow when they say "Get me some help." There's only about a tiny handful of guys for whom this applies, that the bulk of their income is from outside sources.

[pad300]

How can the team "pay" a player's taxes without immediately increasing the amount of his compensation -- he's being compensated, although not directly, by the payment of the taxes -- and increasing the player's tax burden?

Basically, the club has agreed to a deal that will pay Childress a set amount and has obligated itself to keep back a certain part of that salary to cover his tax burden, leaving him with the net. That's very little different than an NBA club keeping back the basic taxes that American (and presumably, Canadian) workers have withheld from their checks. The only difference is that Euro clubs announce salary terms on a net pay basis and American clubs (seemingly) announce salary terms on a gross pay basis.

Am I getting that right?

Pretty close. Income in non-US country X is taxed by country X at it's rates. Assuming there is a tax treaty with the US gov't, (for example, the one with Greece, given here, http://www.unclefed.com/ForTaxProfs/Treaties/greece.pdf.), the income that is taxed abroad is not subject to double taxation. In particular, see article XVII in the pdf given above...

[lefty]

With more and more NBA players going to Europe, European players who made it to the NBA will not longer see their career path as a success.

[FromWayDowntown]

Pretty close. Income in non-US country X is taxed by country X at it's rates. Assuming there is a tax treaty with the US gov't, (for example, the one with Greece, given here, http://www.unclefed.com/ForTaxProfs/Treaties/greece.pdf.), the income that is taxed abroad is not subject to double taxation. In particular, see article XVII in the pdf given above...

Sure, but regardless of to whom the tax is paid or how that amount is calculated, the fact is that Childress isn't receiving a gross base salary and then having the club pay his taxes as additional compensation. In reality, he's still paying his own taxes, but the extent of the announced value of his contract is already diminished by the amounts he'll owe in taxes (i.e., the net value of the contract).

[Kibic]

Poor Beno Udrih. He will have to play in NBA next 6 years for $ 33 mio. Only. Over 80 games. While Childress and Boki will play only 40 games. For more money.
Ha, ha, ha ,ha

[Marcus Bryant]

You with same idiot posts. This salary is net. team will figure tax and pay for him. How many time it have to be explain to you? Who ever say he will not pay tax? He will pay tax. Which is why he is make $48 million gross, after he pay taxes through Olympiacos accountant is 20 millions of net and exchange rate is always mess up by media of US.

Euros is worth more than the dollars. Is like $63 millions gross with bonuses add in.

eh, shut your Gyro

[Obstructed_View]

So, how's the food at Big Kahuna Burger?

Man, I always wondered what that image was for. Now I know.

[Mr.Bottomtooth]

[Indazone]

lol boy this thread has gone downhill fast.

[braeden0613]

it's gonna become a " ty" league in world standards. kinda like the MLS

Because Josh Childress left? Seriously if the dollar goes back up (the jury is out of that one) this won't be happening as often. Its not like kobe left for maccabi tel aviv or something.

[Mr.Bottomtooth]

http://www.ajc.com/sports/content/sp...t_numbers.html

He's gonna be making $6.7M a year, if he comes back to the NBA he will be a restricted free agent (the Hawks would still be able to match any offer), and there's no buyout clause.

[Indazone]

Because Josh Childress left? Seriously if the dollar goes back up (the jury is out of that one) this won't be happening as often. Its not like kobe left for maccabi tel aviv or something.

It'll matter when stuff like this starts happening again. Oh yeah, it's already starting to happen.

In 1967, the league faced a new external threat with the formation of the American Basketball Association. The leagues engaged in a bidding war. The NBA landed the most important college star of the era, Kareem Abdul-Jabbar (then known as Lew Alcindor), who together with Oscar Robertson led the Milwaukee Bucks to a le in his second season, and who later played on five Laker championship teams.

However, the NBA's leading scorer, Rick Barry jumped to the ABA, as did four veteran referees—Norm Drucker, Earl Strom, John Vanak, and Joe Gushue.

[edit] 1970s: The NBA vs. the ABA

The American Basketball Association also succeeded in signing a number of major stars, including Julius Erving, in part because it allowed teams to sign college undergraduates. The NBA expanded rapidly during this period, one purpose being to tie up the most viable cities. From 1966 to 1974, the NBA grew from nine franchises to 18; the New Orleans Jazz (now in Utah) came aboard in 1974. Then, following the 1976 season, the leagues reached a settlement that provided for the addition of four ABA franchises to the NBA, raising the number of franchises in the league at that time to 22. The franchises were the San Antonio Spurs, Denver Nuggets, Indiana Pacers and New York Nets. Some of the biggest stars of this era were Kareem Abdul-Jabbar, Rick Barry, Dave Cowens, Julius Erving, Walt Frazier, Artis Gilmore, George Gervin, Dan Issel and Pete Maravich.

[pad300]

http://www.ajc.com/sports/content/sp...t_numbers.html

He's gonna be making $6.7M a year, if he comes back to the NBA he will be a restricted free agent (the Hawks would still be able to match any offer), and there's no buyout clause.

Yep, 6.7M after taxes = 20M/3 years...Also, just like a bunch of people have pointed to MB, the club pays the taxes. No, the IRS isn't gonna go hunt down Mr. Childress.

The effective tax rate in Atlanta is ((33M/5) - 3.4M)/(33M/5) = .485 = 48.5%. I'm guessing Atlanta has state income tax... At that rate, to net 6.7M per year is 13M per year. This is pretty close to an NBA max contract for 3 years. When you add in the side benefits, luxury accommodations, maid service, car and driver, it's probably very close (possibly even better) to an NBA max contract from Childress's perspective. This is overpaying in a big way for Childress, IMO. If they are willing to spend this kind of money for Childress, the rest of the NBA has to start paying attention to Europe.

It should also be noted that the effective Tax rate being paid for Childress is much less than the Atlanta local rate. (32.5M-20M)/(32.5) = 38.5%...

[clubalien]

Because Josh Childress left? Seriously if the dollar goes back up (the jury is out of that one) this won't be happening as often. Its not like kobe left for maccabi tel aviv or something.

I heard tim duncan is looking forward to playing with splitter with the rest of his new Tau teammates

[jag]

The idea of any type of a merger with euro teams seems ridiculous at this point. How many players are going to want to be drafted to play in Russia? Not to mention that these teams are not going to want to be under NBA regulation.
I also don't think the owners would agree to such a deal, imagine the expenses for that type of travel and accommodations. As a current owner there's a lot of money to be lost with that type of a merger.

[Indazone]

If I'm running CSKA, why would I want to be part of the NBA with the Euroleague coming on as strong as it is? Just keep poaching NBA players.

[jag]

If I'm running CSKA, why would I want to be part of the NBA with the Euroleague coming on as strong as it is? Just keep poaching NBA players.

Exactly, what do they stand to gain? The NBA salary cap? I doubt the NBA logo has the slightest bit of significance as far as Russian basketball fans are concerned.

[Aggie Hoopsfan]

More than likely is a true world championship under the umbrella of FIBA, with the NBA champion taking on the Euroleague champion.

[Manu'sMagicalLeftHand]

The NBA-Euroleague merger is impossible under current conditions. It would be a logistical nightmare for a Western Conference team to travel to Barcelona, nevermind Moscow or Tel-Aviv, and viceversa. Also, the different laws about players contracts make this very unlikely to happen.

The rumour is that the Euroleague wants to "close" itself like American sports leagues, establishing a defined number of teams that will play the compe ion every year, no matter their results in the previous season.

So far, teams qualify for the Euroleague based on their performances on their domestic leagues in the previous season. Teams that perform badly even get relegated from the first tier of domestic compe ion into the second. Think about something like the Heat going to the ABA or the D-League instead of getting a lottery pick because they sucked the previous season. Then they would have to win promotion back into the NBA in that second division.

However, I don't think the Euroleague will become a "restricted" league like the NBA anytime soon. First, there are too many big teams from the same countries and some countries doesn't even have one. Spanish, Greek and Russian teams would be the majority and many countries with basketball tradition wouldn't even be represented because their leagues have been diminished in the past years. Also fans from Spain or Greece who don't support the major clubs wouldn't like the idea, their teams would lose a lot of sponsorship and TV rights money if they are excluded from Euroleague forever. Countries that have a lot of potential for basketball (like the UK or Germany) would miss it because the league was closed even before basketball catched up in there.

I think the current format is what works best. A parallel with the football Champions League. Qualify on a sporting basis, leave it open to anyone, and they could tweak the qualification system to introduce coefficients to seed the early stages. Closing the leagues would mean a lot of potential money lost, because in Europe, interest in basketball is high, but not THAT high. There are many potential markets that are there to be exploited yet. I think that the current system in a few years could work really well if money keeps being invested in basketball and potential markets like Germany, the UK, Scandinavia, Portugal and those countries in Eastern Europe that don't have a great basketball culture yet, like Ukraine, Poland, Romania, etc.

[jag]

More than likely is a true world championship under the umbrella of FIBA, with the NBA champion taking on the Euroleague champion.

Not sure why either FIBA or the NBA would want this. Both sides would have to view themselves as equals to consider this option, or you'll wind up with the greater side(better talent, more money/resources) risking credibility.

[Marcus Bryant]

Yep, 6.7M after taxes = 20M/3 years...Also, just like a bunch of people have pointed to MB, the club pays the taxes. No, the IRS isn't gonna go hunt down Mr. Childress.

The effective tax rate in Atlanta is ((33M/5) - 3.4M)/(33M/5) = .485 = 48.5%. I'm guessing Atlanta has state income tax... At that rate, to net 6.7M per year is 13M per year. This is pretty close to an NBA max contract for 3 years. When you add in the side benefits, luxury accommodations, maid service, car and driver, it's probably very close (possibly even better) to an NBA max contract from Childress's perspective. This is overpaying in a big way for Childress, IMO. If they are willing to spend this kind of money for Childress, the rest of the NBA has to start paying attention to Europe.

It should also be noted that the effective Tax rate being paid for Childress is much less than the Atlanta local rate. (32.5M-20M)/(32.5) = 38.5%...

The club doesn't "pay the taxes." It can certainly add enough to the salary to arrive at a desired after-tax salary for the player. But payments to the player or on the player's behalf to pay the taxes are considered part of the player's gross income.

[FromWayDowntown]

The club doesn't "pay the taxes." It can certainly add enough to the salary to arrive at a desired after-tax salary for the player. But payments to the player or on the player's behalf to pay the taxes are considered part of the player's gross income.

Exactly. Again, the notion of the club paying the taxes is a euphamism for announcing a net salary figure.

[wildbill2u]

well i never said it's a good thing in my post to begin with... but this kind of moves will force the NBA to:

1) Lower the minimum age of a player to be draft eligible
2) Change the rookie minimum salary scale
3) change the draft system and the player rights acquisition
4) re consider the globalization of the NBA as a good thing for the league

the fun is about to start

The NBA is now in a bidding war with teams worldwide. With the ability to pay more than NBA minimums for rookies and other contract limitations such as the pay cap, more European players will stay with their teams and those leagues will be more attractive to many US players.

Anyone who thinks all good players value playing in the prestigious NBA over the almighty dollar...er...Euro...has to reconsider the reality of basketball as a business where players have limited careers and need to make as much as they can.