The tax man cometh: Why the draft is suddenly important
WFAA Sports Blogger
Posted on June 28, 2012 at 11:15 AM
Updated Thursday, Jun 28 at 1:44 PM
The only college class in which I ever made a C was history. I’d much rather spend my time in an anthropology class or making television happen. I never took it seriously. It didn’t apply to me. Donnie Nelson hasn’t taken the NBA draft seriously for nearly ten years now. It didn’t apply to him or his franchise. This is a study of the Mavericks' draft history from a guy that barely passed history directed at a GM that hasn’t paid much attention to the process in a decade.
The NBA's new collective bargaining agreement has financially strapped teams in the fashion that the NFL has been doing for years. The residual effect is an amplified emphasis on drafting and developing players well (like the NFL) because you simply cannot afford to have a team full of veterans unless you intend to pay an exorbitant luxury tax, and in turn repeater taxes.
Every team will work diligently to avoid the new luxury tax. Why, you ask? The old CBA allowed a team to exceed the soft cap by being punished with a dollar-for-dollar penalty. For every million over the soft cap, you contribute another million in luxury tax.
The new CBA has a sliding scale to equate luxury tax that goes into effect in 2013-2014. The first 5 million over the soft cap, you pay 1.50 for every dollar. The next 5-10 million over your franchise is paying 1.75 on the dollar. This scale shifts until you’re paying 3.25 per dollar when you reach the 15 million dollar over the soft cap barrier.
This is what it looks like in real dollars. The Dallas Mavericks' current salary from last season was roughly 75 million dollars. The soft cap sits at somewhere around 58 million dollars. If the Dallas Mavericks rolled this current roster into the 2013-2014 season Mark Cuban would be paying a touch over 110 million dollars for a roster that totals 75 million dollars in salary. That’s not even with the repeater tax factored in, which the Mavericks would qualify for.
A violator of the salary cap that has exceeded the soft cap for 4 of the previous 5 seasons qualifies as a repeat offender and is subject to the repeater tax. The repeater tax moves on a sliding scale much like the luxury tax now does but at a much steeper rate. To calculate the repeater tax, take the amount taxed in the luxury tax scales and add a dollar to each one. So, the first 5 million would be taxed at 2.50 dollars paid per dollar over, until it rests at 4.25 dollars per dollar over.
The actual total that Mark Cuban would be forking over for his 75-million dollar roster with the repeater tax factored in (which they would qualify for) would be 127 million dollars. Now you understand why they have to get under the soft cap, or at least extremely close. Let me remind you that number is derived from a roster that let 3 very key free agents walk. Not to rehash the entire Tyson Chandler pickle, but that’s why they didn’t offer Tyson a long term deal. In the third year of the contract the Mavs would most likely be paying 2.50 dollars for every dollar outlined on his contract.
It’s not completely fair to look at Tyson’s potential contract that way, because it’s more of a cumulative swelling of dollars that brought it to that point. But the fact is if you resign him you’re paying him at least 2.50 dollars on the dollar from that third year on.
That’s why the draft is so important in this new NBA. You have to find young, cheap players that can contribute or you will fall to the wayside.This has not been the way of the Mavericks since 1998 when Donnie Nelson arrived here. This is not a slight directed at his ability as a talent evaluator. It’s pretty clear through his history of trades and free agent acquisitions that he knows what talent looks like. He’s just a found a way to circumvent the entire process of drafting contributing players. Here’s a history of the players he has selected since 1998
ROBERT TRAYLOR -- who was then traded to Milwaukee for Dirk Nowitzki and Pat Garrity. Garrity was then traded to Phoenix with Bubba Wells and Martin Muursepp for Steve Nash.
ANSU SESAY -- never played for Mavericks
BRUNO SUNDOV -- appeared in 17 games for the Mavericks
GREG BUCKNER -- appeared in 129 games for the Mavericks
WANG ZHI ZHI -- played in 60 games for the Mavericks
GORDAN GIRICEK -- traded to San Antonio for Leon Smith who never played for the Mavericks
ETAN THOMAS -- never played for the Mavericks
DAN LAGNHI --which turned into Eduardo Najera who played played 208 games for the Mavericks
PETE MICKEAL --who was traded with Erick Strickland for Donnell Harvey and John Wallace. Harvey played 36 games for the Mavericks. Wallace never played for the Mavericks.
KYLE HILL --never played in the NBA
KENNY SATTERFIELD --never played for the Mavericks
MLADEN SEKULARAC --never played in the NBA
JOSH HOWARD --played in 431 games for the Mavericks and totaled 6614 points.
XUE YUYANG --traded to DEN for a 2nd round pick
*traded for DEVIN HARRIS -- played in 251 games and totaled 2363 points
Vassilis Spanoulis -- never played for the Mavericks
MAURICE AGER --played in 44 games for the Mavericks
JR PINNOCK --never played in the NBA
NICK FAZEKAS -- played in 4 games for the Mavericks
RENALDAS SEIBUTIS --never played in the NBA
MILOVAN RAKOVIC -- never played in the NBA
SHAN FOSTER --never played for the Mavericks
BYRON MULLENS --traded to OKC for Rodrigue Beaubois who has played 137 games totaling 1105 points for the Mavericks.
AHMAD NIVINS --never played in the NBA
SOLOMON ALABI --never played for the Mavericks
JORDAN HAMILTON --traded for Rudy Fernandez who never played for the Mavericks as well as Petteri Koponen who is yet to reach the NBA.
TARGUY NGOMBO -- never played in the NBA
The years of drafting a player just to stash him are no more for the Mavericks.They have to find somebody who can contribute and they have to do it tonight. The marketplace has shifted, and the game they got so good at cheating their way out of is the only thing that can keep them competitive. No longer can you buy your way out of a roster wicket. Thursday night we’ll see if Donnie Nelson can pull the carpet out from underneath NBA execs the way he did over a decade ago.
Mike Marshall is a reporter and producer for Sports Radio 1310, The Ticket. You can e-mail or tweet him your thoughts on basketball or libertarianism.