Aug 14, 2012, 12:13 PM EDT
As it stands now (with the roster basically set), the Lakers will have a $99 million payroll — $17 million more than the second most expensive team in the NBA (Brooklyn at $82 million). The Lakers payroll the following season will be in that same ballpark.
I hear the questions from a lot of people outside Los Angeles — didn’t we just have a lockout, didn’t we just miss months of basketball to stop moves like this? We don’t just want a few super teams!
(Actually, ratings say that you do. And NFL-style parity both is impossible in the NBA and probably wouldn’t sell as well anyway, but that’s another discussion for another day.)
The other owners did want to stop this kind of payroll/team building and during the lockout they agreed to stiffer taxes discourage teams from this kind of spending. But those penalties don’t start to kick in until the 2013-14 season — that is when the Lakers will start to pay a stiff price for their payroll.
Cap guru and friend of the site Larry Coon explains it in an email to Henry Abbott at TrueHoop.
The Lakers will have a tax bill of around $30 million next July, and in retrospect, will view this season as their salad days — it’s the last one where the tax rate is dollar-for-dollar. Starting in 2013-14 the new “incremental” tax takes over, where being $30 million above the tax line will mean paying a whopping $85 million tax bill.
And it gets worse. Starting in 2014-15 teams will pay an even higher rate for being repeat offenders — defined as paying tax in at least three of the four previous seasons. A team $30 million over the tax line will pay — brace yourself — an additional $115 million in luxury tax.
After adding up their payroll, luxury tax bill, and revenue sharing contribution (projected to be $49.4 million in 2013-14), even the Lakers have to stop to consider whether this simply can be written off as the cost of doing business — and that’s the future if they’re paying players with salaries like Bryant, Howard, Gasol and Nash.
By the 2014-15 season the Lakers will be able to control their payroll better because Kobe Bryant, Pau Gasol and Steve Nash come off the books (we will assume Dwight Howard stays at a max deal). For example, Kobe could do what both Tim Duncan and Kevin Garnett just did, taking below their market value (salaries below $10 million) to help out the team.
But the Lakers are all in for the next two seasons with the roster they have. And with luxury tax and revenue sharing in July 2014 they are going to be writing about a $130 million in checks to the league in addition to their $100 million payroll. They can do some things to lower costs (amnesty Metta World Peace, for one) but if they want to compete for a ring those will be small dents. The big-ticket items, topped by Kobe’s $30 million salary, will remain.
Even with what Jack Nicholson pays for his seats and what Time Warner is paying to broadcast Lakers games on a new regional sports network, the Lakers will not be raking in large profits, if any. And remember, the Lakers are the Buss family business, they do not have billions coming in from other sources so that this is a toy. The Lakers need to be profitable.
But they have run the numbers and decided to chase the rings anyway. Which is what the other owners always feared.
Jul 25, 2014, 8:45 PM EDT
Come on, son.
Jul 25, 2014, 7:45 PM EDT
Joakim Noah continues to be brutally honest when speaking about his team’s competition.
Jul 25, 2014, 6:46 PM EDT
The Andrew Wiggins spin and dunk is a thing of beauty.
Jul 25, 2014, 5:59 PM EDT
Casspi ends up back with the Kings on a minimum salary deal.
Jul 25, 2014, 5:14 PM EDT
He is a solid backup to have while Dennis Schroder develops.
Jul 25, 2014, 4:30 PM EDT
Magic rookie shows off handles
Jul 25, 2014, 3:44 PM EDT
Will Cherry was fun to watch at Las Vegas Summer League.
Jul 25, 2014, 3:05 PM EDT
George Karl is a better coach than Byron Scott
Jul 25, 2014, 2:22 PM EDT
Finally. Job has been vacant since April 30.
Jul 25, 2014, 1:44 PM EDT
Knicks’ record last season: 37-45
Melo’s contract value: $124,064,681
Jul 25, 2014, 1:11 PM EDT
Bulls also must make room for Nikola Mirotic in frontcourt
Jul 25, 2014, 12:30 PM EDT
Dirk Nowitzki presents a big strike zone.
Jul 25, 2014, 11:51 AM EDT
Former Bull and Piston sat out last season
Jul 25, 2014, 11:11 AM EDT
New TV deal expected to drastically increase revenue
Jul 25, 2014, 10:33 AM EDT
Not a Cleveland Cavaliers beat reporter. A LeBron James beat reporter.
Jul 25, 2014, 9:55 AM EDT
Rookie big man has been mentioned in Kevin Love trade rumors
Jul 25, 2014, 9:22 AM EDT
Timberwolves reportedly come to their senses, prefer Andrew Wiggins to Klay Thompson
Jul 25, 2014, 8:46 AM EDT
Francisco Garcia opted out of a veteran minimum deal, he will re-sign for a veteran minimum deal.
Chris Paul on boycott if Sterling is still owner: “That’s something me and Doc are both talking about”
Jul 25, 2014, 8:00 AM EDT
It benefits CP3, the president of the players’ union, to talk tough on this issue.
Jul 25, 2014, 12:01 AM EDT
Bonner is one of a few Spurs teammates taking the trophy on tour this summer.
- Report: Knicks made (ridiculous) offer to trade for Kevin Love 0
- Report: Lakers finally offer coaching position to Byron Scott, deal expected soon 24
- Report: Cavaliers leading Kevin Love-trade sweepstakes 39
- Chris Paul on boycott if Sterling is still owner: “That’s something me and Doc are both talking about” 30
- Players union approves of Thunder’s Josh Huestis arrangement 15
- Cavaliers officially sign Andrew Wiggins, putting 30-day hold on him being traded 58
- Lakers deny rumor they are waiting around for Doc Rivers to be coach 61
- James Harden: “Dwight and I are the cornerstones of the Rockets. The rest of the guys are role players.” 91