NBA Roundtable

2010 Tax Concerns: Utah Jazz

In Free Agency, General NBA, Trade Talk on April 22, 2010 at 11:16 am

Utah Jazz Salaries

Contracts Above $5 Million

  • Andrei Kirilenko – $17.82 million
  • Deron Williams – $14.94 million
  • Memo Okur – $9.95 million
  • Paul Millsap – $7.6 million

A sub-total of $50.31 million for four players. Andrei Kirilenko will be an expiring contract. Memo Okur will be beginning his two year extension while Deron Williams and Paul Millsap will have three years remaining on their contracts respectively. Williams has a player option on his final season.

Rest Of Team’s Salaries

  • CJ Miles – $3.7 million
  • Ronnie Price – $1.38 million
  • Kosta Koufos – $1.3 million

A sub-total of $6.38 million for three players. Ronnie Price will be in the final year of his contract. CJ Miles has two seasons left but the second is non-guaranteed. Kosta Koufos will be entering the third year of his rookie scale contract.

Other Costs

  • Draft Pick — The Jazz own the Knicks lottery pick which is currently the #9 pick and comes with a cap hold of around $1.9 million. The Jazz’ own pick is being sent to Minnesota (via Phily – Korver trade).
  • Partial Guaranteed Salary – Sundiata Gaines and Othyus Jeffers have partially guaranteed contracts for about $760k each. It’s unclear how much is guaranteed, although I would guess only a small amount ($50-$150k), and it is unclear whether Utah will want to keep either player. Their salaries are roughly the same as a veteran minimum contract ($100k difference) so it doesn’t change the final figures by much anyway … so I’ll include them.
  • Minimum Roster Size — League mandates say that a team must have a minimum of 13 bodies on their roster. So Utah will need at least two more players to fill out their roster (probably more given the inexperience of their young bench). $1.7 million.

A sub-total of $5.12 million.

Which gives us an overall total of $61.81 million.

Luxury Tax Threshold

David Stern recently announced

NBA commissioner David Stern said on Friday that the league is projecting the cap to come in at about $56.1 million. The actual number won’t be determined until early July, before teams can begin officially signing players.

Though that figure would still be lower than this season’s $57.7 million cap, it’s far better than estimates from last summer, when the league sent a memo to teams warning them of a potential sharp drop to between $50.4 million to $53.6 million.

The luxury tax threshold for a $56.1 million cap is $68 million.

Jazz vs Luxury Tax Line

Utah is beneath the luxury tax threshold by $6.2 million.

Summer Options

Utah’s key free agents

  • Carlos Boozer
  • Kyle Korver
  • Kyrylo Fesenko
  • Wes Matthews

Carlos Boozer is the headliner. He was paid $12.3 million this past season and will be looking for at least that much this summer. Actually, Boozer will be looking for $12-16 million per annum. Given the market place and the number of teams looking for a star big man — Miami, Chicago, New York and possibly New Jersey — it is very likely that Boozer’s agent is going to be able to leverage that a contract closer to $15 million than $12 million.

If not for the injury concerns, Boozer would be looking at a maximum contract and under normal free agent circumstances those injury concerns would hurt him further but there are enough buyers on the free agent market to keep his price high.

Kyle Korver is Utah’s seventh man and primary backup wing. He is an excellent shooter and good complementary scorer. The rest of his game is below average but serviceable. Utah values him but if they re-sign Boozer they likely won’t have enough money leftover to sign Korver. Korver will command about $4 million per annum.

That leaves Utah’s two youngsters. Kyrylo Fesenko is an interesting young big man but he’s also a restricted free agent and hasn’t proven much. Unless he has an exceptional run in the playoffs, Utah will likely be able to sign him for someone between the minimum and $2 million. A similar situation for Wes Matthews, Utah will get to keep him on a good contract, somewhere under $2.5 million and possibly as low as the minimum.

So, let’s take stock

  • Carlos Boozer ~~ $12-15 million, likely $14-15 million
  • Kyle Korver ~~ $3-5 million, likely $4 million
  • Kyrylo Fesenko ~~ $1-2 million
  • Wes Matthews ~~ $1-2.5 million

That gives us a total of $20-to-$23.5 million or $16-to-$19.5 million without Kyle Korver. I’m going to use the figure that doesn’t include Korver.

Signing Boozer

That gives Utah a new salary figure of $76.1 million to $79.5 million which would give them a luxury tax bill of $8-to-11.5 million lifting their total payroll to $84-to-$91 million.

Also, note that Utah would be adding another $8 million or so for Kyle Korver. That is the reason Utah is highly unlikely to sign Korver if they re-sign Carlos Boozer.

Boozer Leaves

Then there is a good chance that Utah keeps Korver along with Matthews and Fesenko. That would lift their salaries to $66-to$68.5 million. So right around the luxury tax threshold.

Utah would have a roster of

  • Guards — Deron + Price + Gaines
  • Wings — Kirilenko + Matthews + Miles + Korver + Jeffers
  • Big Men — Millsap + Okur + Fesenko + Koufos
  • Plus a lottery pick of some kind

They would be able to go forward with that roster without other changes and, in doing so, the Jazz would set themselves up nicely for next summer with Andrei Kirilenko coming off the books.

In fact, they’d be better off not re-signing Korver and maximizing their cap flexibility. Also, they should try to trade Okur and get his contract out of the way too. Utah’s only considerable contracts (over $2.5 million) would be Deron Williams + Millsap plus possibly CJ Miles at that point. That cap space would allow them to make big changes to their roster going forward.

That said, Utah values their own players highly and prefers the certainty of talent on their roster over the uncertainty of free agency. So, I would expect them to re-sign Korver if Boozer leaves. There is a chance that Utah uses their MLE also but the combination of the luxury tax + not being good enough for a title will likely stop them from doing so.  Utah may choose to spend their MLE instead of re-signing Korver and if they let Korver go this is very likely to happen.

I do not expect Utah to play for cap space next summer. I think they’ll try to maximize their current ability/roster instead. So, consider that very unlikely and the likelihood of re-signing Korver and/or using their MLE to be much greater.

Other Summer Moves

Utah will be consumed with their own personnel issues and will find it difficult to be aggressive in either the trade market or free agency + give their own free agents the attention they’ll command. Add to that their reluctance to make changes in previous off-seasons … and it is highly unlikely that Utah makes any other big moves this offseason.

Summary

Utah is going to be pretty much the same team as it has been for the last several years.

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