NBA’s Projected Taxpaying Teams For 2016/17

Now that the 2017 trade deadline is behind us, team salaries around the NBA shouldn’t fluctuate too drastically between now and the end of the season. Teams will continue to make minor roster changes, but as of today, a rest-of-season contract worth the minimum salary would count for no more than $237K on a club’s books. That’s a drop in the bucket when the salary cap is over $94MM.

The relative stability of team payrolls ensures that we can start looking ahead to assess which teams around the NBA will end up in luxury tax territory at season’s end. As it did in free agency last summer, the huge spike in the league’s salary cap continues to have an impact when it comes to taxpayers. Typically, at least a handful of teams pays the tax every year — last season, seven teams did. This season, however, since going into tax territory requires spending more than $113MM on team salary, only two clubs have crossed that threshold.

It’s possible that could change by the end of the 2016/17 season. The Trail Blazers, for instance, are only about $434K below the tax line, so if they need to make some roster changes in the coming weeks, they could get dangerously close to going over the threshold. But at this point, I don’t think Portland will be eager to sign anyone new to replace an injured player or two, since it’s simply not worth it for a club with a 25-35 record to risk becoming a taxpayer this late in the season.

No team besides Portland is all that close to going into the tax. The Mavericks had been about $1MM away prior to the trade deadline, but dumping Andrew Bogut‘s salary in the Nerlens Noel swap with Philadelphia didn’t just help the Sixers reach the salary floor — it also helped Dallas move comfortably away from tax territory.

So which two teams are likely to be the NBA’s only taxpayers this season? Well, the first one comes as no surprise…

Cleveland Cavaliers

  • Team salary for tax purposes: $127,262,331
  • Amount above the luxury tax line: $13,975,331
  • Projected tax bill: $26,188,328

The Cavaliers actually project to go even further into the tax this weekend, once Derrick Williams‘ second 10-day contract expires and the team locks him up to a rest-of-season deal. However, it could be worse. Cleveland’s January trade that sent Mo Williams and Mike Dunleavy to Atlanta in exchange for Kyle Korver actually reduced the team’s salary and tax bill noticeably.

Prior to that move, the Cavs had been more than $15MM above the tax line, meaning they were a tier-four taxpayer, accruing $3.25 in taxes for every dollar spent. Now that they’re back in the third tier, their tax bill is slightly more manageable.

Los Angeles Clippers

  • Team salary for tax purposes: $114,740,032
  • Amount above the luxury tax line: $1,453,032
  • Projected tax bill: $3,632,580

The Clippers were always close enough to the luxury tax line that it seemed plausible they could duck below it at some point this season by dumping a little salary in a trade. However, doing so almost certainly would have meant parting with a rotation player, and Doc Rivers has seemed perfectly content to stand pat — the Clippers haven’t made a single signing or cut all season.

While the Clippers won’t be on the hook for nearly as big a tax bill as Cleveland, the fact that the team remains in the tax isn’t great news. It’ll be the fourth consecutive year that Steve Ballmer‘s club has been a taxpayer, and with lucrative new contracts for Chris Paul, Blake Griffin, and J.J. Redick potentially on tap this summer, the Clippers likely won’t be cutting costs in 2017/18. If they’re in the tax again next season, the Clips will continue to fact the more punitive penalties for repeat taxpayers.

Salary data in this post is based on our own math, plus contract figures from The Vertical and Basketball Insiders.

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4 thoughts on “NBA’s Projected Taxpaying Teams For 2016/17

  1. Jack luft

    For that kind of money the Cavs damn well better win it all. Then again, the owner is a billionaire so who cares?

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