Skip to content

Don't forget about the big bad luxury tax

Feb 9, 2010, 12:39 PM EST

With the trade deadline looming and the rumors aflutter, the natural inclination is to evaluate potential trades based on two criteria:

  • Does this trade make Team A better? Team B better?
  • Does this trade clear 2010 cap space for Team A? Team B?

But believe it or not, not all NBA transactions are predicated upon instant dividends or the 2010 free agent lottery. Owners across the league are still pressed for cash, and for teams over the luxury tax line, the trade deadline represents a final opportunity to cut raw salary costs and save on tax ramifications.

Preeminent salary cap guru, Larry Coon, singled out a number of luxury tax teams (Houston, Miami, Phoenix) as potential trade partners in a piece for the New York Times.

But what’s odd about this year’s crop of luxury tax teams: rather than looking to squeeze under the tax line by unloading a minor asset (a la New Orleans unloading the Brown non-brothers, Devin and Bobby), Houston and Phoenix are looking to unload high-salary guys. It’s no mystery why Houston wants to cash-in on Tracy McGrady’s substantial expiring contract, and the cash-conscious owner of the Phoenix Suns, Robert Sarver, could very well be pushing Amar’e Stoudemire out the door. Moving either player would be a notable deal with major financial implications, not to mention the impact that a player of Stoudemire’s caliber has on a basketball court.

  1. Mack Glanz - Feb 20, 2010 at 4:49 AM

    Thanks for taking the top out to write this interesting topic.

Leave Comment

You must be logged in to leave a comment. Not a member? Register now!

Featured video

Jabari Parker injury latest for disappointing rookie class
Top 10 NBA Player Searches
  1. D. Favors (7686)
  2. K. Martin (7500)
  3. D. Cousins (6935)
  4. A. Bogut (6912)
  5. A. Davis (6899)
  1. T. Jones (6760)
  2. J. Noah (6746)
  3. C. Bosh (6559)
  4. D. Lee (6530)
  5. T. Parker (6417)