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.
May 6, 2015, 11:11 PM EDT
Team now has to find use for 20,000 unused slings
May 6, 2015, 10:33 PM EDT
Cavaliers produce a “30 for 30 seconds”
May 6, 2015, 9:44 PM EDT
James scored 33 points to send the Cavs back to Chicago tied 1-1.
May 6, 2015, 8:59 PM EDT
I still think he stays at least one more year.
May 6, 2015, 8:16 PM EDT
Doc Rivers unsure whether Clippers point guard will be ready for Game 3
May 6, 2015, 7:43 PM EDT
Good choice by voters
May 6, 2015, 7:00 PM EDT
Does he no longer want to look like his teammates?
May 6, 2015, 6:15 PM EDT
Ernie Johnson is the best.
May 6, 2015, 5:30 PM EDT
Golden State was 7-of-23 on uncontested looks.
May 6, 2015, 4:48 PM EDT
Will Dumars be the one deciding the future path of the Pelicans? Should he be?
May 6, 2015, 3:59 PM EDT
He also went through a high-tech training program this summer. And re-worked his jump shot.
May 6, 2015, 3:15 PM EDT
This gets LeBron back to playing the three, where he’s been most dangerous all season.
Dirk Nowitzki explains Mavericks not giving Rajon Rondo a playoff share, says ‘I think that got blown out of proportion’
May 6, 2015, 2:30 PM EDT
Rondo was a disaster with the Mavericks, and the team seemed to give him one last kick on his way out.
May 6, 2015, 1:45 PM EDT
Both are unrestricted free agents, and retirement remains a real possibility for each.
May 6, 2015, 1:07 PM EDT
You can ask “what should David Blatt do?” but it’s not like he’s hiding some great player on the bench, the guys there need to step up.
May 6, 2015, 12:30 PM EDT
Clippers won Game 1 on the road with Paul out of the lineup.
Thunder GM refutes report he didn’t consult Kevin Durant, Russell Westbrook before hiring Billy Donovan as coach
May 6, 2015, 11:50 AM EDT
Discussing the move with Durant and Westbrook was the team’s only option.
May 6, 2015, 11:10 AM EDT
Pierce also had some words for the fans.
Draymond Green after Warriors’ loss: ‘Now the whole world has collapsed, the Bay Area’s just been hit by an earthquake’
May 6, 2015, 10:30 AM EDT
Green mocks the level of panic some may perceive exists after the Warriors lose at home for just the third time all season.
May 6, 2015, 9:50 AM EDT
Allen has totaled seven steals in the first two games of the series.
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- Chris Paul out Game 2 against Rockets 1
- Report: Bulls’ Jimmy Butler wins Most Improved Player 5
- PBT Extra: Mike Conley changes series, but Warriors will start to hit shots again 4
- Last summer Blake Griffin talked to Tim Duncan about leadership 7
- PBT Extra: Will anyone step up and be third scorer for Cavaliers in Game 2? 19
- Doc Rivers on whether Chris Paul plays in Game 2 vs. Rockets: ‘Right now, I just don’t think so’ 4
- Tony ‘First Team All-Defense’ Allen and Mike ‘Masked Assassin’ Conley lead Grizzlies to Game 2 win over Warriors 18