about salary cap, luxury tax and such subjects

[zocool16]

mmm i always hear a lot about all of this and i kind of understand it but i never fully get why some moves are made. For example I know the Knicks are used to having tons of players with huge contract but where does all that money come from? dont they ever run out of money? and then there is the luxury tax which is like 45 million dollars...

Then we have the Spurs... who i believe aren't paying any luxury tax this year. how is it that some teams have more to offer to a player without getting over the limit? I've never quite understood this. Do some teams have more money in their organization to spread around among players? if so, shouldn't the spurs be one of the top dogs in money-making?

I hope someone with a clear idea of how all of this works can offer me an explanation..thanx

[lotr1trekkie]

In my former homeland of NY nothing is free or cheap. Downtown parking garages start at $20+ for a couple of hours, See a Broadway show expect to kick in 50 extra. Having said that ---all of NY sports teams[NBA,NHL, MLB] are exclusively on cable except for the NFL. NO games on free tv. I'm not sure how it works but I'd venture a guess that you have to buy a package for each team you want to watch. Not like $19.95 to see all home games. We are blessed here to see every game for free. With about 20 million in the greater NY/NJ area the money flows like manna into the Knicks, Rangers and Yankees etc. I suspect they could give seats away to all the home games and still turn a profit.

[exstatic]

You can bump your payroll any number of ways. Trades only have to match within a certain percentage of salary. If you constantly bump up against that and are taking more than you give up, your payroll rises. In addition, the exceptions are available to intentionally allow teams to bid compe ively over the cap for FAs by $5M every year, plus veteran salary slots, plus minimum contracts to fill out your roster.

[zocool16]

urf? lol thanx for the heads up

[duncan228]

Hard as I try, the money end of this league still leaves me after all these years of trying to keep up with it.

Appreciate anyone who puts it in layman's terms for those of us that need/want the education.

[zocool16]

Hard as I try, the money end of this league still leaves me after all these years of trying to keep up with it.

Appreciate anyone who puts it in layman's terms for those of us that need/want the education.

yes please! i need it... I'm a junior in college with a journalism degree awaiting and i can't really understand it.

... and yes i WILL be a journalist...hehehe

[ducks]

spurs are paying the tax

[sabar]

Basically you can go way above the salary cap by a ton of exceptions. The mid-level exception lets you sign players equal to the average NBA salary even if you're over the cap. You can resign your own free agents even if that resign would go over the cap. Rookies can be signed for more than the cap too. It gets really complicated so just wikipedia it:

http://en.wikipedia.org/wiki/NBA_Salary_Cap

[SenorSpur]

mmm i always hear a lot about all of this and i kind of understand it but i never fully get why some moves are made. For example I know the Knicks are used to having tons of players with huge contract but where does all that money come from? dont they ever run out of money? and then there is the luxury tax which is like 45 million dollars...

Then we have the Spurs... who i believe aren't paying any luxury tax this year. how is it that some teams have more to offer to a player without getting over the limit? I've never quite understood this. Do some teams have more money in their organization to spread around among players? if so, shouldn't the spurs be one of the top dogs in money-making?

I hope someone with a clear idea of how all of this works can offer me an explanation..thanx

I remember reading somewhere recently that the Knicks (along with the Lakers) are one of the few NBA teams who have revenue pouring into their coffers from various sources.

Fisr off, their average ticket prices, including your run-of-the-mill courtside seats are routinely among the highest in the league. Besides the Fakers, the Knicks ticket revenue is 3-5 times that of every other team in the league. Credit that to simple cost-of-living, where it is much higher in N.Y. than other league cities. Also credit that to simply supply and demand. Even though the Knicks have sucked for the better part of 30 years, they are still the Knicks and still a local draw.

Next, there is the aforementioned local cable television revenue. The Knicks, much like every other local major New York sports teams. That deal alone is, by far, the most lucrative in all of the NBA. Which isn't hard to fathom seeing as how they are owned by Cablevision and reside in the number one television market in the country.

Finally, there are the promotional and advertising contracts deals with various corporations. Much like their local neighbors the N.Y. Yankees, the Knicks have affiliations with all sorts of companies by which they advertise and promote their products in a variety of ways. Because there are considerably more companies based in N.Y., the Knicks are afforded considerably more coprorate marketing opportunities than most other teams. Once again, this produces another very lucrative revenue stream.

Because the Knicks are owned and operated by media conglomorate (Cablevision), there are likely many more revenue streams that are simply unheard of for most other teams.

In all, the Knicks generate at least 3-4 times the revenue of your average NBA team. This is how and why they are not at all concerned about luxury tax penalties and salary cap woes like other teams. They simply have more money to spend than other clubs. Of course, the downside is that their expenses are considerably higher than most teams as well.

Much like the Yankees in baseball, the Knicks have a clear financial advantage over every other team in their league. However as we've seen, having enormous sums of available revenue is one thing, spending it wisely and making sound decisions is quite another.