Apr 16, 2014, 9:22 AM EDT
Because Andrew Bynum signed with the Pacers, Chicago can set off a portion of his salary ($105,564 in this case) — an amount I didn’t account for. That leaves them $791,165 beneath the tax line — more than the $750,000 in leeway discussed below.
Noah ($500,000 for All-NBA first team) and Gibson ($500,00 for All-Defensive first team) could still send the Bulls into the tax. However, even if the Bulls hadn’t signed Ronnie Brewer, Lou Amundson, Mike James and Greg Smith, they still would have had more than $750,00 but less than $1 million in leeway.
So, Chicago can absorb a $500,00 Noah bonus for All-NBA first team and a $250,00 Gibson bonus for All-Defensive second team and avoid the tax. But if Noah and Gibson each get $500,000 bonuses, Chicago will pay the tax.
It’s the same situation regardless of whether the Bulls made their latest run of signings.
In sum, these signings won’t make the Bulls more likely to pay the luxury tax, but they’ll cost Chicago a few extra real dollars. In return, the Bulls get more trade flexibility — a definite win for them.
Original post: The Chicago Bulls, like every team, would like to avoid the luxury tax.
Not only are luxury-tax penalties already costlier than ever, repeater penalties loom. If a team might be willing to pay the tax only while contending, it’s especially prudent not to pay the tax when out of contention.
That’s what makes the Bulls’ situation so fascinating.
With all due respect to the marvelous job Tom Thibodeau, Joakim Noah and crew have done this season, Chicago is an extreme longshot to win the 2014 championship. But once Derrick Rose gets healthy, Nikola Mirotic signs, the Bulls use both their 2014 first-round picks (one from Charlotte) and exhaust their pending cap space… Chicago could get really good – and really expensive – in a hurry.
Yet, the Bulls have flirted with the luxury-tax line this season while still remaining pretty competitive. It’s a tight line to walk – wanting to keep salary low without completely blowing up the team (a dichotomy the Luol Deng trade accomplished).
Chicago caught a big break in that quest when they waived Erik Murphy and the Jazz claimed him, removing his salary from the Bulls’ books. That positioned Chicago to add up to three players and leave $750,000 in leeway under the luxury-tax line for performance incentives potentially due to Joakim Noah ($500,00 for All-NBA first team) and/or Taj Gibson ($500,00 for All-Defensive first team or $250,000 for All-Defensive second team).
The Bulls opted to go another way, though.
Chicago signed Ronnie Brewer, Lou Amundson and Mike James to minimum-salary multi-year contracts, according to Larry Coon. Amundson’s’ agent, Mike Bartelstein, confirmed his client’s contract was for two years. James’ agent, Bernie Lee, did the same for his client.
The multiple years matter, because the NBA pays a portion of the minimum salaries for veterans with at least three years experience and the league’s portion of the payments are not taxed – but only for one-year, 10-day and rest-of-season contracts. By signing those three to multi-year deals, Chicago assumed all payments and the increased tax burden that comes with them.
Smith – like Brewer, Amundson and James – could prove useful in trades after the season. Smith is a talented young big man, and the other three have unguaranteed contracts, according to Coon. That allows their salaries to help a trade match, and then they could be released them without penalty.
All in all, the Bulls are now $685,601 below the luxury-tax line – meaning they can absorb only one of the bonuses potentially due to Noah and/or Gibson without paying the tax.
If the bonuses due to Noah and Gibson fall short of $750,000, the Bulls win. They’ll avoid the luxury tax and will have added potentially useful trade assets.
But if Noah and Gibson both hit their incentives, the Bulls will pay the tax, though they’ll still have tradable assets in Smith, Brewer, Amundson and James.
It’s a calculated risk that I think will work. I project Noah to make the All-NBA first team, but I don’t have Taj Gibson making an All-Defensive team.
However, the downside – paying the tax – is high enough that I don’t believe the multi-year deals were worth it. Had the Bulls waited until Saturday to sign Brewer, Amundson and James, Chicago would have kept its $750,000 luxury-tax leeway and still signed Smith, anyway.
Chicago is choosing to play with tax fire to better position itself for a trade later, perhaps a revealing strategy about the franchise’s long-term plans.
Doc Rivers on report that Chris Paul and DeAndre Jordan had a falling out: ‘I can put this to rest: They get along great’
May 30, 2015, 12:01 AM EDT
It’s literally Rivers’ job to quash these types of rumors.
May 29, 2015, 11:00 PM EDT
Why should he?
May 29, 2015, 10:00 PM EDT
Sefolosha suffered a leg fracture during a police incident that kept him from participating in the playoffs.
May 29, 2015, 9:00 PM EDT
Would you pay $700 for two pairs of sneakers?
May 29, 2015, 8:00 PM EDT
Jeff Hornacek remains in charge, but there has been some shuffling among his assistants.
May 29, 2015, 7:01 PM EDT
There are questions about the future of Josh Smith, Patrick Beverley and others with the team.
May 29, 2015, 6:15 PM EDT
The two most popular players in the NBA this season (with Kevin Durant out) go head-to-head on the NBA’s biggest stage.
May 29, 2015, 5:29 PM EDT
Cleveland’s defense has looked better in the playoffs than it has all season, but starting next Thursday it will get the biggest test it has had all season.
May 29, 2015, 4:53 PM EDT
Skiles is a former Magic player from 1989 through 1994.
May 29, 2015, 4:30 PM EDT
Ayesha Curry cooks, Stephen Curry tastes, and Riley Curry points out raspberry-sauce spills
May 29, 2015, 3:45 PM EDT
Would hiring Thibodeau really a wise call by the Pelicans?
May 29, 2015, 3:09 PM EDT
The NBA needs to review this process going forward.
May 29, 2015, 2:14 PM EDT
Warriors guard passed, but not enough time had passed to determine his health
May 29, 2015, 1:25 PM EDT
Atlanta guard expected to miss 3-4 months
May 29, 2015, 12:43 PM EDT
Believable, but is that why it’s believed?
May 29, 2015, 12:04 PM EDT
Varejao was slated to miss the entire season with an Achilles tear
May 29, 2015, 11:17 AM EDT
NBA gives Rockets center a flagrant foul, rescinds technical fouls for him and Andrew Bogut
May 29, 2015, 10:54 AM EDT
Contract negotiations reportedly ongoing
Report: Tom Thibodeau not interested in coaching Pelicans (because he fears Anthony Davis leaving), Magic or Nuggets
May 29, 2015, 10:21 AM EDT
My money is on Davis outlasting Pelicans’ next coach in New Orleans
May 29, 2015, 9:45 AM EDT
Gokul Venkatachalam predicts Cavaliers in 6
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- Warriors’ Klay Thompson officially diagnosed with concussion 20
- Klay Thompson should not have been cleared to return to Game 5 after concussion evaluation 15
- Dwight Howard suspended one game after foul switcheroo 18
- Three coaches who may replace Tom Thibodeau in Chicago 12
- Report: Kevin Love going to “look around” this summer as free agent; Celtics, Lakers, Rockets possible 49