Wednesday, January 7, 2009

If It Don't Make Dollars, Then It Don't Make Sense

Paying the luxury tax sucks. I get that. Especially when you're any team not named the Celtics or the Lakers. But while one team (Denver) made a move today to maneuver under luxury tax territory, two others made a series of bizarre moves that don't seem to make much sense to me.

Let's start with what we do know: according to Larry Coon and his incredibly thorough salary cap FAQ, the luxury tax threshold is $71,150,000 in total team salary. Coon doesn't indicate that this number is approximated, although it's fair to give a little wiggle room on both sides of that value. I'm not calling Coon's facts into question, but often these values are based on approximations. So keep that in mind.

The total team salary of the Nuggets is $70,994,118. Marc Stein reports that both Kenyon Martin and J.R. Smith have contract bonuses that could total $800k, providing more than enough of a bump to put Denver over the edge. Thus, it makes sense to dump Chucky Atkins and their 2009 first rounder to OKC for Johan Petro and a 2009 second rounder, saving Denver around $1.46 million in pure salary. This trade makes perfect sense to me, and it's exactly the kind of activity you expect to see around this time every year.

Good job, Nuggets and Thunder; a neat little salary-clearing operation that appears to be a success. But prepare yourself, dear reader, because the following sequence just might make your head explode. Despite the fact that the rest of the world (myself included) assumed that Shaun Livingston would clear waivers without a hitch, he apparently did not. Instead of entering free agency, Livingston and cash money were sent to Memphis in exchange for a conditional 2012 second rounder. Just another move by a team trying to dodge the luxury tax, right? Well, apparently not. A quick look at the Heat's books shows that their total team salary is equal to $69, 174,791. I've never been accused of being a math wizard, but I can tell you with zero doubt that 69 million is less than 71 million. College education for the win. Supposing that this information is correct and that the Heat are in fact unaffected by the luxury tax, why would they give up Livingston and cash for a conditional 2012 second round pick (that likely will never even come to fruition)? But, let's pretend for a second that Miami has motivation to send Livingston to Memphis. My initial worries about Shaun's place in a backcourt already crowded with young talent were soon quashed by a turn of the tide: the Grizz had traded for Livingston, only to waive him. ...What?! (Apparently, there are other numbers out there that suggest the Heat are over the tax.)

In order to make room for Livingston, the Grizzlies waived Darius Miles, whose presence with the team would have helped to stick a thorn into the side of Portland GM Kevin Pritchard through a bizarre series of events that may or may not include some shady dealings from the Blazers' medical staff. Memphis waived him to make room for Livingston, but then curiously waived Livingston once his rights made their way to the Grizz. Memphis is under the cap, much less in danger of paying the luxury what do the Grizz have to gain from waiving Livingston? That's a completely serious, non-rhetorical question, to which I do not know the answer. Unless the money is reason enough, which it possibly could be.

While the short-term gains for Miami appear to be ambiguous at best, the view through the haze gets a bit clearer when you see them through the eyes of Ira Winderman:

The way the Livingston move was done, and with the amount of tax space cleared, the move seems to have Alonzo Mourning's name written all over it.
Reliable as always. Youdaman, Ira. But all this seems to be much ado about nothing, if you ask me. Then again, I'd probably feel differently with millions of dollars on the line.

Footnote: Slightly related -- the Clippers acquired and then waived Hassan Adams from the Raptors. The Raps are in luxury tax territory, but Adams' salary alone is not enough for Toronto to clear themselves under the threshold.

Add to Technorati Favorites