Interesting new rule in the new CBA regarding RFA's and tax paying teams

[Admin]

I was reading up about the Pacers signing Chris Copeland last night and it turns out that even though the Knicks wanted to match the small $3 million per year deal that the Pacers offered, they were not allowed to because the new CBA prohibits tax paying teams from matching any offer of $3 million or more per season on their restricted free agents.

Now I don't think there is anyone out there left who could be stolen like that, but it's something to keep an eye on over the next couple of years.

[PSSSHHHRRR87]

It seemed like the Knicks really liked Copeland too and I was wondering why they didn't match. Nice to know and thanks for the post. And now we have another rule for Hawksquawkers to over-quote. lol

[DrReality]

Cold s been us?

[MaceCase]

I mentioned this in an argument with Buzz before where he thought that the only new restrictions to the CBA were a more punitive tax system and thus thinking that was the sole reason a billionaire like Cuban was cutting salary. The truth is that your actual ability to add salary get's restricted. Smaller MLE, greater trade restrictions and if you happen to find great value with cheap 2nd round picks, welp, good luck actually keeping them.

[yungsta]

well one of the reasons Ferry wants us to stay flexible is because under this new CBA there will be teams who will be forced to dump, trade, or let go some of their young talented players so it will be very interesting to see what scenarios will pop up in the future where we can take advantage of that.

[Admin]

I mentioned this in an argument with Buzz before where he thought that the only new restrictions to the CBA were a more punitive tax system and thus thinking that was the sole reason a billionaire like Cuban was cutting salary. The truth is that your actual ability to add salary get's restricted. Smaller MLE, greater trade restrictions and if you happen to find great value with cheap 2nd round picks, welp, good luck actually keeping them.

Plus the insane amount if tax dollars that gets progressively higher depending on how far over the tax you are. I think the Nets are $3.50 for every $1 over and the Nets have a $70+ million tax bill this year.

[Guest]

Well this is always how the CBA has worked in restricted free agency. The previous team has the right of first refusal, IF they can match. This is similar to what occurred with Gilbert Arenas and the Wiz, the Wiz offered him a deal that the Warriors could not match because they were over the cap without an exception equal to his starting salary.

Now Dolf, don't go around spreading lies like "they were not allowed to because the new CBA prohibits tax paying teams from matching any offer of $3 million or more per season on their restricted free agents. " because that is not true. The Knicks could not match the deal for Copeland because they did not have an exception that allowed them to exceed the cap in their situation, NOT because of some luxury tax and RFA rule that has been implemented. If the Knicks had Early Bird Rights on Copeland, then they would be able to match any offer up to the average player salary (Non-Taxpayer Mid Level Exception). The Knicks only had non-bird rights for Copeland, so they could only sign him (or match) with cap room, an exception, or non-bird rights which allow you to resign for up to 130% of previous salary (provided that does not exceed their maximum).

For Copeland (and Prigioni), they were restricted for their salary in RFA. Since they were a RFA with less than 2 years experience teams could only offer them a contract starting up to the Non-taxpayer MLE (i.e. average salary so roughly around $5m). This is the "Gilbert Arenas Provision" as in the 3rd year the salary could escalate. Now it is true that the Knicks could not match any contract for Copeland or Prigioni if it was above the Non-taxpayer MLE, but that is because those guys did not have Bird Rights and the Knicks do not have an exception that is greater than the Non-taxpayer MLE available to them.

[MaceCase]

Plus the insane amount if tax dollars that gets progressively higher depending on how far over the tax you are. I think the Nets are $3.50 for every $1 over and the Nets have a $70+ million tax bill this year.

The tax is one thing but we've seen in the past that if a team's revenues are high enough (either through market or winning) that owners scoff at the price. They probably lose more from bad investments in a single quarter alone or just gassing their fleet of private jets. We've even seen plenty of cases where owners just have that much disposable income where it doesn't matter to them as long as they are winning (Paul Allen, Prokorov). Take away the ability to win though i.e. by restricting them from just throwing the same MLE that everyone has at ring chasers or turning dead salary like a Kwame Brown into a Pau or getting a Nash sign and traded to you for just a TPE and you start to question the feasibility of having a 100 million dollar 8th seed or lotto team.

Also....I don't think you factored in the bribe money to NBA officials and under the rug money that Prok is paying his Nets players

But again, he probably is not even blinking an eye at any of this. Beyond the 13 billion or so he has stashed in Russia, he likely owns the majority of the new arena himself in addition to half the real estate in the surrounding area. The Nets are a secondary investment and thus the very definition of a toy for him. Perhaps the Lakers on the other hand are really fearful of the tax. The Buss family actually earn their income primarily from the Lakers and in light of Dwight leaving and Kobe being on the shelf, they've been cutting salaries here and there from Artest to Clark to Duhon because they know that revenue will not fully offset their bills especially when there's an actual psuedo-contender in their same building.