NBA Roundtable

2010 Tax Concerns: Boston Celtics

In Free Agency, General NBA, Trade Talk on April 18, 2010 at 9:02 am

Boston Celtics Salaries

Contracts Above $5 Million

  • Paul Pierce – $21.51 million
  • Kevin Garnett – $18.83 million
  • Rajon Rondo – $9.09 million
  • Rasheed Wallace – $6.32 million

A sub-total of $55.75 million for four players. Paul Pierce is entering the final year of contract while Garnett and Wallace have two years left on their respective contracts. Rajon Rondo will be just beginning a five year contract extension.

Rest Of Team’s Salaries

  • Kendrick Perkins – $4.89 million
  • Glen Davis – $3 million

A sub-total of $7.89 million for two players. Both Kendrick Perkins and Glen Davis will be entering the last year of their respective contracts. Perkins is due for a large pay increase next summer.

Other Costs

  • Draft Pick — The Celtics have the #19 selection in the first round and that comes with a cap hold of $1.14 million.
  • Minimum Roster Size — League mandates say that a team must have a minimum of 13 bodies on their roster. Boston have only seven players at this point and a thread-bare bench. So let’s say six veteran minimum contract players totaling $5.1 million.

A sub-total of $6.24 million.

Which gives us an overall total of $69.88 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.

Celtics vs Luxury Tax Line

Boston is currently over the luxury tax threshold by $1.88 million but that figure will increase after they flesh out their bench.

Summer Options

The Celtics have several free agents

  • Ray Allen
  • Nate Robinson
  • Tony Allen
  • Marquis Daniels
  • Brian Scalabrine
  • Shelden Williams
  • Michael Finley

Boston have four starters + two bench players + a draft pick on their roster already. Their final starter needs to be a wing player and will likely be a re-signed Ray Allen. Their two bench players are both big men so they unlikely to spend their free agent money there.

The Celtics have full bird rights on Ray Allen and Tony Allen which allows the Celtics to sign each player to a contract without needing to use their MLE.

They have non-bird rights on Nate Robinson and Marquis Daniels. This means that they can sign those players to contracts up to 120% of their previous pay level without needing their mid-level exception. So, that means they are able to pay Nate Robinson up to $4.8 million and Marquis Daniels up to $2.39 million.

Boston also has non-bird rights to Shelden Williams and Michael Finley, as well as full bird rights to Brian Scalabrine, but all three of those players should be available for a minimum contract so this is unimportant here.

Ray Allen is likely to command a contract similar to the one Mike Bibby got from Atlanta last season. Ray is no longer a star player but his shooting ability + solid scoring output makes him a very effective role player.

Allen will have contract offers from other contenders so Boston will be forced to either make a comparable offer (Allen’s loyalties lie in Boston, so he likely signs for the same money) or a slightly superior offer. Boston will want to keep Ray’s contract down to two seasons in order to keep their rebuilding options open for 2012 (when Garnett + Sheed expire) so they may have to overpay on a per annum basis to get the length they want. A three year MLE offer would be about $18 million, so a two year deal would need to be in the $8-9 million range.

Summary So Far

Okay, so that brings us to eight players and a new total of $77-78 million. Boston has four of their starters in place, two backup big men, a role player in Ray Allen, and, an unknown mid-first round draft pick.

Options

Boston is short of talent and needs to upgrade their talent base to have a chance at contending for a title next season. Therefore, they are very likely to spend their MLE in an attempt to make one last run at a title before splitting up their old team.

  1. Use the MLE to upgrade their backup guard spot — Ridnour, Duhon, Felton, Blake
  2. Use the MLE to upgrade their wing rotation. Either to sign a new starting two guard or to finally replace James Posey — Mike Miller, Travis Outlaw, Linas Kleiza, Josh Childress, Ronnie Brewer.
  3. Split the MLE between two players, one backup guard and one backup wing player — Rasual Butler + Roger Mason Jr

There is a fourth option, which is my first preference, but I think the Celtics are highly unlikely to go in that direction. That route is dumping Rasheed Wallace and possibly trading Glen Davis for a low level rotation player and then spending their MLE on a backup big men like Amir Johnson. The Celtics would then likely re-sign Nate Robinson and fill out the rest of their bench with minimum contract players.

How Boston chooses to use their MLE will decide whether the team attempts to re-sign Nate Robinson or not and decide how much they are willing to pay Tony Allen.

For example, let’s say Boston signs Mike Miller to an MLE contract, the Celtics are likely then to re-sign Nate Robinson to a deal worth around $4 million and TA to a $2 million contract. If those three players joined, that would add another $12 million to the Celtics payroll and give Boston a bench unit of Nate + Tony + Miller + Davis + Sheed.

That $12.5 million would take the Celtics payroll up to $86.5-to-$87.5 million which would give them a luxury tax bill of $19-20 million. So, after taxes, the Celts would be paying $107-108 million.

To Re-Sign Ray Allen or Not To Re-Sign Ray-Ray

I have included Ray Allen in these plans because I fully expect Boston to re-sign Ray but I would be leaning in the other direction. Too many old legs, not enough quickness or overall athleticism on the wing, and, not enough defense on the wing. I think the Celtics might be better off letting Ray leave in free agency.

That would ease their financial burden considerably and allow Boston to give big minutes to a younger wing player. For example,

  • Starters: Rondo + Paul George (draft pick) + Paul Pierce + Kevin Garnett + Kendrick Perkins
  • Bench: Nate + Mike Miller + Glen Davis + Rasheed Wallace
  • Total cost — $79 million

Or, if you follow the link above — my first preference — to sign Amir and trade Perkins for a new wing player

  • Starters: Rondo + Perk trade + Pierce + Amir + Garnett
  • Bench: Nate + George + Davis
  • Total cost — same as above — Sheed would be dumped for a similar contract. The rest of the roster would be minimum contracts. The Perk trade could bring back a player who earns $1-2 more or less than what Perk currently earns. The Celtics may also choose to sign TA to a $2-3 million contract to play off the bench which could add another $1-2 million more.

Tony Allen

I would rather Boston treat Tony Allen as a secondary option in free agency. A fall-back option.

I think the Celtics should concentrate on adding wing players with a more serviceable jump shot in order to compensate for Rajon Rondo’s lack of a jumper. Having a backcourt with two non-jump shooters puts a lot of pressure on the other three players offensively.

Nate Robinson

Nate Robinson has not been able to learn the system in Boston but he is still a good option going forward. Boston will strongly consider re-signing him if they choose to spend their MLE on a backup wing player (most likely use of MLE).

If, however, Boston chooses to sign a guard or to split their MLE between a backup guard and backup wing … then Nate is out in the cold.

Brian Scalabrine and Shelden Williams

Brian Scalabrine offers a very specific skill set with his mobility, team defense and perimeter shooting. Having that type of a reserve at the end of their bench is a valuable resource so he is likely to be re-signed at a minimum contract.

Shelden Williams is a more uncertain case. He may be re-upped or Boston may choose to go in another direction. Either way, Williams or the new big man is likely to be the fifth big in the depth chart (Scal = 6th) and likely to be on a minimum contract.

Summary

These summer options have spread out in numerous directions so let’s summarize things here quickly

  • Boston is very likely to re-sign Ray Allen. That deal will cost at least a number comparable to the MLE and possibly $8-9 million per annum if they try to keep the offer to two seasons.
  • Boston are very likely to spend their MLE due to their desperate need for more talent for one last run before splitting up the Big Three.
    • A new wing player is their most likely target
    • Second most likely is splitting the MLE between a wing and a guard
  • Nate Robinson’s Celtics future depends on how much Boston has to spend on a new guard. If it’s only the minimum, then he is likely to return. If it’s the MLE? Then is gone.
  • Boston have serious problems with their big man rotation due to their lack of quickness and mobility. They need to address these flaws but their limited number of choices means they likely fail to do so.
  • A trade market for Rasheed Wallace will be very limited. Boston are unlikely to be offered a rotation worthy reserve player in such a deal.
  • Likewise, Boston would not get much for Glen Davis but they could get a low level rotation player. Say a second wing off the bench. If they chose to trade BBD.
  • Boston’s draft pick is very valuable here and should land them a ready made rotation player. Someone like Paul George or maybe someone like Larry Sanders, Damion Willie Warren, or James Anderson. There are a lot of different options there (guards, wing, combo forwards, big man) that give them plenty of interesting options in developing their bench.
  • Boston will likely have to pay somewhere between $83 million and $88 million on their roster next season.
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