NBA Roundtable

2010 Tax Concerns: San Antonio

In Free Agency, General NBA, Trade Talk on June 24, 2010 at 12:37 pm

San Antonio Spurs Salaries

Contracts Above $5 Million

  • Tim Duncan – $18.84 million
  • Richard Jefferson – $15.2 million
  • Tony Parker – $13.65 million
  • Manu Ginobili – $11.85 million

Richard Jefferson is an expiring contract and a major trade asset. Tony Parker is also an expiring contract and due for a contract extension (similar pay bracket). Manu Ginobili is just beginning a three year $39 million contract while Tim Duncan has two years and $40 million left on his deal.

Those four players give us a sub-total of $59.54 million.

Rest Of Team’s Salaries

  • Antonio McDyess – $4.86 million
  • George Hill – $850k
  • DeJuan Blair – $920k

Antonio McDyess has two years left on his contract but only $3.4 million of his $5.2 million is guaranteed on that second season. George Hill is on the third season of his rookie scale contract while Blair has three years left on his contract.

These three players create a sub-total of $6.63 million.

Other Costs

  • Draft Pick — San Antonio owns the #20 pick which holds a cap hold of $1.13 million
  • That gives San Antonio a roster size of 8 players. If they went with the minimum roster size of 13 players, on veteran minimum contracts, that would cost a further $4.13 million.

That is a sub-total of $5.26 million which gives us an overall total of $71.43 million.

Note: San Antonio also has a small cap hold ($860k) for Tiago Splitter but that is unimportant. Either they’ll sign him for much more money (MLE deal) or he’ll stay in Europe.

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.

Spurs vs Luxury Tax Line

San Antonio is above the luxury tax threshold by about $3.5 million.

Summer Options

Best Options

The Spurs have two main trade options open to them

  • Trading Tony Parker for an established star
  • Trading Richard Jefferson’s expiring contract + some combination of young talent (Blair, Hill, #20 pick, future draft picks, rights to Tiago Splitter) for an established star.

San Antonio also has another major route to improvement — the MLE

  • Tiago Splitter is their most likely target with the MLE
  • If not, San Antonio desperately needs to upgrade their big man rotation preferably with an athletic big man like Tyrus Thomas or Amir Johnson.
    • Tyson Chandler would be a home run if he opted out and was only able to get an MLE deal + managed to stay healthy.

Spending the MLE

The Spurs will be somewhat reluctant to spend their MLE. They’ll want to try and move Antonio McDyess first to team who can take his full salary on without sending any back in order to create some payroll flexibility.

Failing that, they’ll be reluctant but willing if they are convinced that their potential signing gives them a much improved shot at a title. There are two main players that come to mind here:

  • Tiago Splitter
  • Mike Miller

If the Spurs do not sign either player, I think they are likely to spend a portion of the MLE (similar to Roger Mason Jr or Matt Bonner contracts) on some improvements in the supporting cast

  • Louis Amundson ~~ $2-3 million
  • Dorell Wright ~~ $3 million
  • Travis Outlaw ~~ $4-5 million
  • Rasual Butler ~~ $2 million
  • Amir Johnson ~~ $4 million

Unfortunately, as a consequence, the player I would love to see them sign, Tyrus Thomas is unlikely to be on their radar.

I think the most likely option for the MLE is Tiago Splitter.

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