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Thread: The Raptors and the Salary Cap/Luxury Tax

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Default The Raptors and the Salary Cap/Luxury Tax

    Cap figures came out last night:








    Here is Raptors 2013-14 payroll via HoopsWorld.com:

    http://www.hoopsworld.com/toronto-raptors-team-salary

    Raptors guaranteed total: $65.324M

    Raptors options total: $70.535M

    BUT BUT BUT That does not include Hansbrough so tack on reported $3M.

    $68.32M and $74.535M.




    What does this mean for Toronto?

    #1 Raps are over the salary cap.

    #2 They are a luxury tax team.

    #3 The Raptors tax bill or final payroll is not determined until the final regular season game of 13-14.

    #4 Current Depth Chart
    PG: Lowry, Stone
    SG: DD, Ross, Fields, Richardson
    SF: Gay, Novak, Kleiza
    PF: Amir, Hansbrough, Acy
    C: JV, Gray, Camby

    #5 See this post: http://www.raptorsrepublic.com/forum...l=1#post220315

    #6 Raptors don't have to worry about spending the minimum 90% of soft cap ($52M).



    What is unknown:

    #1 Will Kleiza be amnestied?

    #3 Will Camby fork over some guaranteed money to secure his freedom and pursuit of a contender?


    EDIT: See phez's post:

    http://www.raptorsrepublic.com/forum...l=1#post219987

    Will fix.

    EDIT 2: See post tkfu post below.

    http://www.raptorsrepublic.com/forum...l=1#post220065

    Will fix.

    EDIT 3: See post below.

    http://www.raptorsrepublic.com/forum...l=1#post220315

    Will fix.
    Last edited by mcHAPPY; Wed Jul 10th, 2013 at 08:22 PM.
    "You donít know the Bruno Caboclo......"
    Bruno Caboclo

    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    Not to beat a dead horse, but I would not call BC an efficient spender.

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    Ryan Wolstat: Just got confirmation too that Hansbrough signed via part of MLE, not bi-annual Twitter @WolstatSun

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    I think it is a given Kleiza is now amnestied. Just my opinion but here is why:

    Raptors are just $1.7M from hard cap.

    Serious implications with no proven backup PG.

    If injuries occur, 10 day contracts count against the hard cap.

    Raptors will not be able to take back very little to no money in trades.
    "You donít know the Bruno Caboclo......"
    Bruno Caboclo

    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    Interesting post. Just wanted to clear up some possible salary cap/CBA misconceptions:

    1. The Raptors don't have the mini-MLE. There are two types of mini-MLE, one for teams with cap space at the start of free agency who used up that cap space, and one for teams in the luxury tax at the start of free agency. Neither of those apply to the Raptors.

    2. The MLE is portionable however you want. You don't have to use it all, and you can split it up amongst as many different players as you like.

    3. I came out with slightly different numbers for the Raptors' current cap number than you did. I'll follow up a little bit later with the details.

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Quote tkfu wrote: View Post
    Interesting post. Just wanted to clear up some possible salary cap/CBA misconceptions:

    1. The Raptors don't have the mini-MLE. There are two types of mini-MLE, one for teams with cap space at the start of free agency who used up that cap space, and one for teams in the luxury tax at the start of free agency. Neither of those apply to the Raptors.

    2. The MLE is portionable however you want. You don't have to use it all, and you can split it up amongst as many different players as you like.

    3. I came out with slightly different numbers for the Raptors' current cap number than you did. I'll follow up a little bit later with the details.
    It is not what I did. I took it from HoopsWorld.com and only added $3M from Hansbrough signing.

    The only contract not guaranteed is Lowry's which must be decided by July 15th.
    "You donít know the Bruno Caboclo......"
    Bruno Caboclo

    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    Raptors Republic All-Star Craiger's Avatar
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    Quote stretch wrote: View Post
    Not to beat a dead horse, but I would not call BC an efficient spender.
    Very efficient for the players though!

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    Quote Craiger wrote: View Post
    Very efficient for the players though!
    Don't forget their agents, too.

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    Quote Matt52 wrote: View Post
    #4 Current Depth Chart
    PG: Lowry, Stone
    SG: DD, Ross, Fields
    SF: Gay, Novak, Kleiza
    PF: Amir, Hansbrough, Acy
    C: JV, Gray, Camby
    I don't see Q. Richardson listed in the depth chart and I'm assuming he's not factored into the total team salary? The roster is currently full with 15 players under contract, though I'm willing to bet that neither Camby or Kleiza (at least) will be on the roster by the time the season starts.

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Quote CalgaryRapsFan wrote: View Post
    I don't see Q. Richardson listed in the depth chart and I'm assuming he's not factored into the total team salary? The roster is currently full with 15 players under contract, though I'm willing to bet that neither Camby or Kleiza (at least) will be on the roster by the time the season starts.
    Whoops. Go ahead and fix it, CRF. I'm gone from computer.

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    Here are my totals for Raps cap number. The site you quoted seems to be a little bit confused about its data; it lists Landry's cap number instead of his salary, but lists Q-Rich and Stone's salaries instead of their cap numbers. So, for the sake of consistency, and because it's what everyone except for the guy writing the cheques cares about, here is the Raptors' cap situation for 2013-2014:

    Rudy Gay 17,888,932
    Landry Fields 6,250,000
    Amir Johnson 6,500,000
    Kyle Lowry 6,210,000
    Linas Kleiza 4,600,000
    Jonas Valanciunas 3,526,440
    DeMar Derozan 9,500,000
    Aaron Gray 2,690,875
    Terrence Ross 2,678,640
    Quincy Acy 788,872
    Steve Novak 3,750,001
    Marcus Camby 4,383,773
    Julyan Stone 884,293
    Quentin Richardson 884,293
    -------------------------------
    Total 70,536,119

    Given that it's been reported Hansbrough got $3 million, that does indeed put us in luxury tax territory at $73,536,119. That means we would be over the tax line by $1,788,119, with exactly 15 players on the roster. We're almost certainly not going to stay that way, though. There are three interesting scenarios for us to get under the tax line, and I think which one gets used will depend on whether Masai finds someone he thinks is worth giving the bi-annual exception or the rest of the MLE to.

    Scenario 1: Kleiza gets amnestied. That would take his $4,600,000 off the cap, putting us under the tax line by $2,811,881. That allows a number of useful scenarios, such as cutting Q-Rich, signing a free agent with the $2 million bi-annual exception or the remainder of the MLE, and signing one more player to a minimum contract.

    Scenario 2: Camby gets waived. If we wanted to get under the cap by buying out Camby, he'd need to accept a buyout of $2,489,149 or less. I don't think that's very likely. Far more likely would be using the stretch provision on him (assuming the reports that he's got $1 million guaranteed on his last year are correct). That would put his cap number at $1,076,755 for each of the next 5 years. Add a minimum deal in his place, and we'd still be $634,606 under the tax line--enough to waive Q-Rich and sign a rookie free agent like Myck Kabongo. Or it could be saved, to use in case we need to sign someone to a 10-day during the season.

    Scenario 3: Both Scenario 1 and Scenario 2 happen. This would be if Masai wants to sign two free agents to more-than-minimum deals, one using the rest of the MLE and one using the bi-annual. It would leave us $6,118,899 under the tax line, enough to use the $2,016,000 bi-annual exception and the $2,150,000 balance of the MLE, as well as one more minimum-salary deal if Q-Rich is waived. I'd say this is the least likely of the three.

    Looks to me like Bobby Webster, our new capologist, been doing his job: Hansbrough's deal is exactly the right amount to give maximum flexibility for the rest of the summer and going forward.
    Last edited by tkfu; Wed Jul 10th, 2013 at 11:24 AM. Reason: oops: used 1-year vet's min instead of 2-year vet's min

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    Quote Matt52 wrote: View Post
    Whoops. Go ahead and fix it, CRF. I'm gone from computer.
    I added Richardson to the depth chart. Have you (or anybody else) heard anything about his contract? I'm assuming it's going to be a minimum deal, fully guaranteed for the first season, which pushes us even further into luxury cap territory.

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    Quote CalgaryRapsFan wrote: View Post
    I added Richardson to the depth chart. Have you (or anybody else) heard anything about his contract? I'm assuming it's going to be a minimum deal, fully guaranteed for the first season, which pushes us even further into luxury cap territory.
    Yup, Newsday reported Vet's minimum, which means a cap number of $884,293. (Actual salary is around $1.4 million, the balance of which is paid out of league funds.) The Knicks are also including $884,293 cash in the deal to pay the Raptors' portion of his salary.
    Last edited by tkfu; Wed Jul 10th, 2013 at 11:26 AM.

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    Quote tkfu wrote: View Post
    Yup, Newsday reported Vet's minimum, which means a cap number of $788,872. (Actual salary is around $1.4 million, the balance of which is paid out of league funds.) The Knicks are also including $788,872 cash in the deal to pay the Raptors' portion of his salary.
    Thanks for the update, I hadn't heard about the cash being included in the transaction. This Bargnani deal keeps getting better and better! lol

    The one thing that I really like about the moves that MU has made, is that there is still so much room for flexibility, allowing him to alter course on the fly.

    EXPIRING
    - Lowry @ $6.2M
    - Kleiza @ $4.6M
    - Gray @ $2.7M

    POTENTIALLY EXPIRING (non-guaranteed or team option in 2014-15)
    - Johnson @ $6.5M
    - Camby @ $4.4M
    - Hansborough @ $3.0M
    - Richardson @ $0.8M
    - Stone @ $0.8M
    - Acy @ $0.8M
    - Valanciunas @ $3.7M (rookie-scale)
    - Ross @ $2.8M (rookie-scale)

    POTENTIALLY EXPIRING (player option for 2014-15)
    - Gay @ $17.9M


    That's quite a few attractive trade assets to work with. Even Novak @ $3.8M/$3.4M/$3.8M and DeRozan @ $9.5M/$9.5M/$9.5M/$9.5M(player option) should be considered decent trade chips. That leaves Fields @ $6.25M/$6.25M as the only other player on the roster not previously mentioned. I could see MU being extremely active at the trade deadline.
    Last edited by CalgaryRapsFan; Wed Jul 10th, 2013 at 11:26 AM.

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    Oh! There's actually one more thing that adds to our flexibility, that I hadn't thought of earlier. If Q-Rich is waived and the stretch provision is used, it will actually stretch his cap hit out over 7 years, meaning it would only count for $126,328 per year. That means there are some minor changes to my post above, the most relevant one being that in Scenario 2 there would still be enough space to sign anyone to a minimum deal, not just a rookie.

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Quote CalgaryRapsFan wrote: View Post
    I added Richardson to the depth chart. Have you (or anybody else) heard anything about his contract? I'm assuming it's going to be a minimum deal, fully guaranteed for the first season, which pushes us even further into luxury cap territory.
    It is a vet minimum.

    But not pushing any farther than the numbers I gave as it is in the link.
    "You donít know the Bruno Caboclo......"
    Bruno Caboclo

    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Quote tkfu wrote: View Post
    Here are my totals for Raps cap number. The site you quoted seems to be a little bit confused about its data; it lists Landry's cap number instead of his salary, but lists Q-Rich and Stone's salaries instead of their cap numbers. So, for the sake of consistency, and because it's what everyone except for the guy writing the cheques cares about, here is the Raptors' cap situation for 2013-2014:

    Rudy Gay 17,888,932
    Landry Fields 6,250,000
    Amir Johnson 6,500,000
    Kyle Lowry 6,210,000
    Linas Kleiza 4,600,000
    Jonas Valanciunas 3,526,440
    DeMar Derozan 9,500,000
    Aaron Gray 2,690,875
    Terrence Ross 2,678,640
    Quincy Acy 788,872
    Steve Novak 3,750,001
    Marcus Camby 4,383,773
    Julyan Stone 884,293
    Quentin Richardson 884,293
    -------------------------------
    Total 70,536,119

    Given that it's been reported Hansbrough got $3 million, that does indeed put us in luxury tax territory at $73,536,119. That means we would be over the tax line by $1,788,119, with exactly 15 players on the roster. We're almost certainly not going to stay that way, though. There are three interesting scenarios for us to get under the tax line, and I think which one gets used will depend on whether Masai finds someone he thinks is worth giving the bi-annual exception or the rest of the MLE to.

    Scenario 1: Kleiza gets amnestied. That would take his $4,600,000 off the cap, putting us under the tax line by $2,811,881. That allows a number of useful scenarios, such as cutting Q-Rich, signing a free agent with the $2 million bi-annual exception or the remainder of the MLE, and signing one more player to a minimum contract.

    Scenario 2: Camby gets waived. If we wanted to get under the cap by buying out Camby, he'd need to accept a buyout of $2,489,149 or less. I don't think that's very likely. Far more likely would be using the stretch provision on him (assuming the reports that he's got $1 million guaranteed on his last year are correct). That would put his cap number at $1,076,755 for each of the next 5 years. Add a minimum deal in his place, and we'd still be $634,606 under the tax line--enough to waive Q-Rich and sign a rookie free agent like Myck Kabongo. Or it could be saved, to use in case we need to sign someone to a 10-day during the season.

    Scenario 3: Both Scenario 1 and Scenario 2 happen. This would be if Masai wants to sign two free agents to more-than-minimum deals, one using the rest of the MLE and one using the bi-annual. It would leave us $6,118,899 under the tax line, enough to use the $2,016,000 bi-annual exception and the $2,150,000 balance of the MLE, as well as one more minimum-salary deal if Q-Rich is waived. I'd say this is the least likely of the three.

    Looks to me like Bobby Webster, our new capologist, been doing his job: Hansbrough's deal is exactly the right amount to give maximum flexibility for the rest of the summer and going forward.
    The site I used lists Landry as $6.25M which is his cap hit. It is the average of his 3 year deal with year 1 and 2 around $5M and year 3 at $8.5M.

    Stone has 2 years in the league so for year 3 in 2013-14 he comes in at $884K. Richardson on the other hand is a 10+ year veteran and makes $1.399M.

    When a player has been in the NBA for three or more seasons, and is playing under a one-year, 10-day or rest-of-season contract at the minimum salary, the league reimburses the team for part of his salary -- any amount above the minimum salary level for a two-year veteran3. For example, in 2011-12 the minimum salary for a two-year veteran is $854,389, so for a ten-year veteran, with a minimum salary of $1,352,181, the league would reimburse the team $497,792. Only the two-year minimum salary is included in the team salary, not the player's full salary. They do this so teams won't shy away from signing older veterans simply because they are more expensive than younger veterans.

    http://www.cbafaq.com/salarycap.htm#Q16
    The mistake you picked up on is HoopsWorld.com uses the entire salary in their calculation whereas they should only be using what a two-year veteran is paid. For 2013-14 that number is $884k.

    I will fix my original post by subtracting $515K.
    "You donít know the Bruno Caboclo......"
    Bruno Caboclo

    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    Raptors Republic All-Star ezz_bee's Avatar
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    it's good to have more than one cap genius around here.
    "We only have one rule on this team. What is that rule? E.L.E. That's right's, E.L.E, and what does E.L.E. stand for? EVERYBODY LOVE EVERYBODY. Right there up on the wall, because this isn't just a basketball team, this is a lifestyle. ~ Jackie Moon

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    Raptors Republic Hall of Famer mcHAPPY's Avatar
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    Bobby Webster is a smart cookie.

    However, if a team uses its Non-Taxpayer Mid-Level exception but does not exceed the constraints of the Taxpayer Mid-Level exception (e.g., in 2011-12 they use the Non-Taxpayer Mid-Level exception to sign a player for $3 million or less), then the team is allowed to later exceed the apron (i.e., it is not hard-capped). If the team later exceeds the apron, then it is considered to have used the Taxpayer Mid-Level exception rather than the Non-Taxpayer Mid-Level exception. But the converse is not true -- if a team is above the apron and spends any of its Taxpayer Mid-Level exception, it cannot drop below the apron and spend the remaining money as part of its Non-Taxpayer Mid-Level exception. Finally, a team that was above the apron but did not spend any of its Taxpayer Mid-Level exception has full access to the Non-Taxpayer Mid-Level exception if it later drops below the apron.

    http://www.cbafaq.com/salarycap.htm#Q25
    Flexibility remains for trades.

    I thought if you used the non-tax MLE (i.e. FULL MLE) you could not go over the apron. This is WRONG. Turns out that not exceeding the limits of the TAX MLE gives the Raptors the ability to not be hard-capped.



    What does this mean?

    As long as the Raptors do not touch their MLE to sign anyone else, they are not hard capped at $4M more than luxury tax ($71.748M).



    What does it mean for any more possible free agents?

    They are limited to minimum salaries.
    If they use the rest of their MLE they go over apron, so they can't.
    They cannot use Bi=Annual exception because it takes them over apron as well.

    Again from Mr. Coon:
    BI-ANNUAL EXCEPTION -- This exception is available only to teams that are below the "apron" (i.e., not paying luxury tax, or less than $4 million above the tax line). This determination is made after the exception is used, so a team below the apron cannot use this exception if doing so takes them above the apron. It cannot be used if the team has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception. It allows a team to sign any free agent, starting at up to the following amounts:
    A team that uses its Bi-Annual exception cannot go above the apron for the remainder of that season. In other words, once a team uses its Bi-Annual exception, the apron effectively becomes a hard cap for the remainder of that season4. This eliminates any potential loophole where a team could first use its Bi-Annual exception and subsequently add salary to go above the apron, when doing so in the opposite order (adding salary first, and then using the exception) would be illegal.


    Only options to add players now is through:

    1. minimum contracts
    2. trades
    3. Amnesty and then Bi-Annual or remaining non-tax MLE become available BUT Raptors face hard cap of $75.748m.
    "You donít know the Bruno Caboclo......"
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    Basketball has clear winners every night --
    except at the draft, which is all homework, politics and chance.

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    WOW, $73.5 mil for this group of players! With their ceiling! If this alone isn't an argument for blowing this team up ...

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