NBA Roundtable

2010 Tax Concerns: Dallas

In Free Agency, General NBA, Trade Talk on June 24, 2010 at 12:08 pm

Dallas Mavericks Salaries

Contracts Above $5 Million

  • Caron Butler – $10.56 million
  • Jason Terry – $9.87 million
  • Jason Kidd – $8.61 million
  • Shawn Marion – $7.31 million

Caron Butler is an expiring contract. Jason Terry has two years left on his deal with the second season a team option (likely trade bait). Jason Kidd also has two seasons left on his contract and Shawn Marion has four years left on his deal.

Those four players give us a sub-total of $36.35 million.

Rest Of Team’s Salaries

  • Matt Carroll – $4.3 million
  • DeShawn Stevenson – $4.15 million
  • Rodrigue Beaubois – $1.16 million

Rodrigue Beaubois is entering the season season of his rookie scale contract. Stevenson has an expiring contract. Carroll has three years left on his contract, the final year a player option, which Carroll will opt into.

These three players create a sub-total of $9.61 million.

Other Costs

  • Draft Pick — Dallas does not own a first round draft pick but they are trying hard to buy or trade for a first round pick.
  • Non-Guaranteed Contract — Eric Dampier has a non-guaranteed contract worth $13.08 million. Dallas is going to use him as trade bait.
  • Non-Guaranteed Contract — Juan Jose Barea has a non-guaranteed deal worth $1.81 million. There is no way that Dallas parts ways with Najera due to the low price of his deal. So put Barea down on the books too.
  • Partial Guaranteed Contract — Najera has $5.75 million over two years left on his contract. It is unclear whether only $500k per annum of that is guaranteed or as much as $2.5 million per annum is guaranteed.
    • If it’s the high figure, then there is no significant difference between a buyout + minimum contract signing.
    • If it’s the low figure, Dallas will likely use Najera as trade bait. Probably as an add-on to a larger trade.
    • So, I am going to include his salary onto the team’s payroll.
  • Trade Exception = Dallas has a $2.9 million exception from the Kris Humphries trade. Dallas is shopping this exception looking for a draft pick in return for taking on a salary that some other team does not want. So this is likely another $2-3 million on the Mavs payroll when it’s all said and done.
  • Player Option — Dirk Nowitzki is about as close as a guarantee to return as it gets for Dallas. He will likely negotiate a contract extension, a three year extension, that will take him up to his 36th birthday. So let’s put him down for the $21.51 million that he is owed.
  • Buyout — Greg Buckner is still on the Mavs books for $1.06 million
  • Open Roster Spots — The Mavericks have seven players on the books + Dirk + Damp + Najera + Barea + trade exception player which gives us a total of 11 players. Dallas usually have a large roster size so I will put them down for the full 15 player squad list which would add another $3.3 million onto the payroll.

That gives us a sub-total of $46.66 million including all the non-guaranteed and partial guaranteed contracts + Dirk staying on his current contract + the likely use of the trade exception.

Which gives us an overall total of $92.62 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.

Mavericks vs Luxury Tax Line

That would put the Mavericks over the luxury tax threshold by $24.6 million.

Summer Options

A few notes

  • Considering the huge tax payout the Mavs are facing, they may very well waive Najera if it’s the low priced guarantee … but it is unlikely to be a deal breaker if the Mavs need his contract to make the numbers work.
  • Eric Dampier’s $13.08 million contract would allow the Mavericks to take back as little as $10.36 million back in a trade and as much as $16.45 million.
    • Couple that with Najera’s deal + Stevenson’s contract and the Mavericks could take on as much as $25.39 million in salaries.
  • Mark Cuban is going to want to try and get back some control of his team’s payroll. His first option will be to include players like Matt Carroll in the trade and if it’s a major trade ($20+ million) he may use Jason Terry as an add-on.
  • The Mavericks also have their MLE which would add another $5.5 million to their payroll.

So Dallas could be looking at anywhere from $92 million to $100 million in salaries + a major tax hit of $25-32 million on top of that. A total payroll of $115 to $130 million.

That is a ridiculous figure but Mark Cuban wants to be aggressive and I do expect further willingness to take back contracts in order to get Dallas over the hump to win an NBA Title.

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