NBA Roundtable

2010 Tax Concerns: Charlotte Bobcats

In Free Agency, General NBA, Trade Talk on April 24, 2010 at 4:04 pm

Charlotte Bobcats Salaries

Contracts Above $5 Million

  • Tyson Chandler – $12.6 million
  • Gerald Wallace – $9.6 million
  • Boris Diaw – $9.0 million
  • Stephen Jackson – $8.45 million
  • Nazr Mohammed – $6.88 million
  • DeSagana Diop – $6.48 million

A sub-total of $53.01 million for six players. Tyson Chandler and Nazr Mohammed are both expiring contracts.  Boris Diaw has two more seasons while the other three — Stephen Jackson, DeSagana Diop and Gerald Wallace — have three years left remaining on their contracts.

Rest Of Team’s Salaries

  • DJ Augustin – $2.54 million
  • Gerald Henderson – $2.1 million
  • Alexis Ajinca – $1.47 million

A sub-total of $6.11 million for three players. All three players are still on their rookie scale contracts.

Other Costs

  • Draft Pick — No picks — draft pick sent to Minnesota via Denver (Ajinca trade)
  • Partial Guaranteed Contract — Derrick Brown — $100k of his $760k deal is guaranteed. Brown is a near certainty to be retained so put him down on the roster.
  • Minimum Roster Size — League mandates say that a team must have a minimum of 13 bodies on their roster. Charlotte will need to add at least three players which at the veterans minimum adds another $2.55 million.

A sub-total of $3.31 million.

Which gives us an overall total of $62.43 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.

Bobcats vs Luxury Tax Line

Charlotte is below the luxury tax threshold by $5.57 million.

Summer Options

Charlotte has two important free agents

  • Raymond Felton
  • Tyrus Thomas

Tyrus Thomas is a restricted free agent and Felton is unrestricted. Both are players are looking for deals worth somewhere around the equivalent of the MLE. That means they are looking for contracts in the $5-7 million per annum range.

Assuming both players are offered MLE deals, which has a fair chance of happening, the Bobcats would need to shell out another $11 million or so to retain both players. That $11 million would increase their salaries to $71.73 million for a minimum 13 man roster. The Bobcats would have to pay a little under $4 million in luxury taxes taking their total payroll to about $75.5 million.

The main complication here is that Bobcats new owner, Michael Jordan, reportedly is reluctant to pay the luxury tax for a team that is only barely above .500. With the Bobcats possessing no draft picks and having no real movement in free agent and limited trade assets, it will be very difficult for them to upgrade their personnel. In other words, they are what they are.

Ergo, there is a good chance that some team will manage to pry at least one of Charlotte’s key free agents away from them. There have been doubts over Felton’s long term future and Ty Thomas has only been playing 20 minutes a night … so it could be either player that is deemed surplus to requirements.

Good News

This is good news for any team hoping to acquire Tyrus Thomas this offseason.

Bad News

This is bad news for Bobcats fans because:

  1. They are either going to lose one or two of their key rotation players, or,
  2. Pay them both midlevel contracts which will continue the front office’s mismanagement of the Bobcats salary cap …. which will in turn make it difficult for Charlotte to make any substantial improvements in the future, limiting their ability to acquire star talent, and hence limiting their ability to field a team capable of contending for an NBA title.
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