Was up everyone, this is my first post in this forum. Just wanted to know when we sign Scola????? before or after the 22nd!!!!
Welcome. No FA can sign prior to July 22. Free Agents can announce their intentions, which is what you are seeing on the "commitments" to teams from Horry, Hughes, Allen, etc..
No news yet, on Luis Scola. Just keep checking in here daily, because this place keeps current on most NBA news and rumors.
Since he's a draft pick, can't we technically sign him now? Or do the rules change if you don't sign that first summer?
Good question. I know it's a Free Agent moratorium but I'm not sure about those players with signing rights already committed to a team. It's kind of fuzzy and tough to keep straight with a different (proposed) CBA about to go into effect.
Isn't Scola under a contract in Europe? Hence, the Spurs/Scola will have to buy it out. So he can not just sigh with SA easily.
Can second round picks sign right now? If so, Scola should be able to be signed.
Ah, only if he signed for the minimum, it seems.
Manu was signed one day after the moratorium ended, for example.
I read somewhere that Scola's buyout with Tau is $2M Euros which would equate to $2.387 M US. I have no clue on what exceptions there are for the signing maratorium.
Goddam dollar devaluation....
"Goddam dollar devaluation.."
rock-bottom interest rates will do that to a currency.
The Eu plummeted a couple weeks back, to a 10-month low against the $, when EC summit ended with no agreement, plus FR and NL voting no to the cons ution.
A couple months ago, Eu 2M would have been US$ 2.6M
I say we just sign Big Dog and let Scola play out his contract--unless he's so desperate to come over he would sign for the LLE.
Does the cost of the buy out go against the cap?
Hmm... it seems that the price is higher to bring Scola this summer.
Let's run some numbers, shall we?
Tau Ceramica has a very hard-line president, and he will not concede anything. He would be more than happy to have Scola playing for Tau another year. If the Spurs want Scola now, he (Scola the player, NOT the Spurs or anyone else) has to pay the full 2M Euros NOW.
The total money in cash would be 2.387M roughly ~2.4M. Teams can provide 350K for contract buyouts. Teams can also provide a cash bonus to the player, that I think it could be around 400K (this is how the Spurs managed to pay Manu's 750K contract buyout). I am not sure if this money can be payed to the player in one lump sum, or if should be payed over a certain period of time (like in the first 12 months). Someone should research this issue. Let's be optimistic and assume that it could be payed in one lump sum (still this money is taxable!).
Players earning millions of dollars are in the very high income brackets. They should pay around 45% in taxes. This includes both federal and state taxes, the state taxes are prorated among all the states they play during the year. Since Scola will play half the game in Texas with no state income tax, it may be a little less, but not much less (most of the 45% are Federal taxes anyway). Let's be conservative and assume 45%.
So...
+2.400M -- total contract buyout
-0.350M -- cash for buyout
----------
+2.05M
Assuming the 45% in taxes owed to the Federal and State goverments on income, and assuming 100K of living expenses for the first year, the Spurs should pay Scola in the first year of his contract:
remaing of buyout + 1 year living expenses = (1st year salary + cash bonus) * 55% after taxes
2.05 + 0.10 = (1st year salary + 0.40) * 0.55
1st year salary = 3.51M
We are not done yet. Players usually receive a pro-rated part of their salary with a check every 15 days. I don't know the rules, but in the case of Scola's buyout, he should receive at least 2.05M up front to have enough equity to pay the buyout. Furthermore, I think the Federal goverment will want some of that money up front as well if it is provided in one big lump sum, so the Spurs may need to pay him the full 3.51M (+ the 400K bonus).
Now, there are other options. Scola could apply for a loan using the Spurs guaranteed contract as collateral. The problem is that Scola is a foreigner with no credit history in the States, so the interest would be quite hefty. Private lenders could easily ask him 20% APR per year. The Spurs FO may work something out for him though. Let's assume they get him a 10% APR via one of Holt's bankers' friends for 3 years. He would be paying 60K per month in principal + interest assuming no extra fees, or $720K per year. Assuming he would like to get at least 1M per year net on his pocket (the equivalent of an LLE contract after taxes), the Spurs should be paying him a contract in his first year of roughly:
1st year contract = LLE + loan payment = 1.8M + 0.72M
1st year contract = 2.5M
So the Spurs would have to offer him something in the order of 2.5M -- 3.5M range in the first year to bring Scola in this summer. If I run the numbers correctly, this clearly indicates that the LLE is certainly NOT sufficient, and the Spurs would be using at least half of the MLE if they plan to bring him in this year. Of course, this conclusion is only correct if my assumptions are valid.
damn rick, nice job
Nice.
And if the Spurs wait another year, then Scola doesn't have a buyout. It'll be interesting to see what they do. If they have to give him a bigger contract up front, they should give him a three year contract that starts at $3M and then decreases by 10% in each upcoming season. I believe that would still work under the new CBA.
So it would be a three year contract with the first year being $3M, the second year being $2.7M and the third year being $2.4M. That'd be a three year, $8.1M contract. That's pretty hefty -- especially when compared to Manu -- but if the Spurs are high on him, it'd probably be worth it.
I believe Nocioni got a 3-year, $9M deal, didn't he? That's sort of the range of what we were figuring Luis would warrant.
Are you sure it's still a 2 million dollar buyout? If he has 1 year left on his contract, then presuming he's making around 1 million per year, the team would basically be paying 3 million dollars for the next season, considering they aren't gonna get anything from him in a year, which is probably about a million more than any player is making in Europe currently. And if he really wants to go to the NBA and they don't let him, they'll be paying that for a discontent player. If he's free from his contract next year, then the most i expect is a one million buyout. However if his contract is signed for the longer amount of time, they may not budge on the buyout, but some pressure from Scola might change their mind if he indicates he isn't interested in playing in Europe anymore.
I don't have the article handy but I'm pretty sure I read the 2M Euros number from an Argentine story (Buenos Aires or Bahia Blanca). I would think that would at least be his final contract year salary with TAU, if not a little more.
Wouldn't Scola paying the buyout have that money deductible as a business expense?
I don't think you can deduct taxes as a foreigner. He could start doing so after he obtains his permanent residency, but it would take at least two years.
There are some other issues regarding taxes. He could get incorporated in order to save some money in taxes (there is a little loophole :-), but there are also restrictions as to what is the minimum amount of time he has to reside in the states before he could do so. In addition, as a foreigner, in order to speed up his permanent residency application and use some to the loopholes, he could apply as an "investor" bringing money to a business. The problem is that the minimum investment to qualify is 2M, so it is again the chicken or the egg.
I believe he got 3 years, $11M, but someone could confirm this. I remember reading Nocioni was very thankful of the Bulls FO, since they deviced the entire financial engineering strategy to pay TAU the buyout and figure out all the taxes and such. Nocioni's contract buyout was a little higher than Scola's (2.8 Euros), but the exchange rate at the time was near 1 to 1. It was probably around 10% more than Scola's contract based on today's exchange rate.
SolidD, I understood the buyout was 1.7M Euros, equating to approximately $2M U.S. dollars.
Nocioni's contract was 3 years/$8.3M confirmed by two sources.I believe he got 3 years, $11M, but someone could confirm this.
I am confused. I thought at one point in time I argued for the 1.7M Euros figure I read in a Spanish newspaper and you confirmed it was much larger with several sources (including journalists from Argentina). I remember we even PM each other regarding this...
. IIRC, I got the figure I posted from you (not that really matters
)
Cool, and thanks for the confirmation
That means that Scola's contract should be in the order of 3years/$9.0M with a larger buyout. It should be within the range I suggested, and probably both contracts should be very similar in terms of conditions, since it is essentially a negotiation with the same club/president.
Last summer the only dollar amounts we talked about were American Dollars. At that time, I believe I confirmed with them it was $2M American Dollars when you said it was $1.7M American Dollars. I don't think I've ever talked to anyone about Euros.I am confused . I thought at one point in time I argued for the 1.7M Euros figure I read in a Spanish newspaper and you confirmed it was much larger with several sources (including journalists from Argentina).
But maybe I'm confused.
Anyway, I have no idea if the buyout went up or down from last year but just recently someone told me that it was $1.7M Euros. (Don't know if it's true or not)
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