Do you think the Celtics will spend deep into the luxury tax?

[tstorey_97]

Thanks to all contributors to the thread.

I'll try for some contrast here...

They won't spend deep into the luxury tax this coming season (2022) and perhaps they won't in 2023 either, however, they are planning every step to have a 2024 title team with significant luxury tax implications.

I love the media doughnuts..."if the Celtics don't win, no free agents are going to come here."

Brown + Tatum = contender = destination for top players = luxury tax spending.

I don't think they'll sign Fournier unless they make some trades and it frees up space. They won't be moving their cap around for Evan Fournier.

Seems that Walker will be traded for a bad contract that will be two years to go or so... really bad big $ + injuries = like Kevin Love

This mgt group likes Smart, I'm sure deals will be discussed, but in the big picture they want him on the team. (I would prefer they trade Smart, I think it's time for the J's to take over)

They'll keep Thompson he's their backup center.
Expiring:
Fournier wants $20M?
Semi (would make $2M and can start a playoff game if needed)
Kornet third string center would cost $2.3M
Parker would get $2.3M if he stays

Hope for the future (don't see the need to trade these guys this off season, their play and their values should be going up):
Robert ($3.6M)
Langford ($3.8M)
Nesmith ($3.6M)
Pritchard ($2.5M)

My point with all this is, they aren't setting up for a title move yet so the need to spend into the tax will come when they bring in Embiid, Leonard or Giannis to play for a title with the J's.

We're in the army..."hurry up and wait."

[Celtics2021]

Looking at it a different way, there are two primary reasons ownership will spend:

1) A better team leads to more revenue, and thus greater profit even if the costs are higher.

2) Personal pride in winning a title.  Owning a professional sports franchise is definitely an ego-boosting item, and rich people generally like to win.

In terms of #1, for the Celtics, the biggest impact comes from ticket sales and related purchases (happy fans buy more concessions and merchandise).  Also an extended playoff run means more premium games to sell.  The Celtics have their local media deal wrapped up until 2038, so while perhaps there are some clauses that increase or decrease the value based in ratings and number of playoff games, for the most part the variable is game-day revenue.

So say spending $10 million above the tax line will cost the team roughly $30 million in salary, luxury taxes, overhead, etc, will that net the team greater than $30 million in revenues from increased ticket revenue, merchandise, etc? After the disappointment of this season, I think the answer is probably yes.  Fans are a little disillusioned, and will need some additional investment by ownership to energize their enthusiasm.  Whether that comes via trades or free agency I couldn’t tell you, but given what I’ve seen in the season ticket thread, it seems as if the Celtics will need to put some additional investment into their product for a couple of years.

In terms of #2, I think that extra spend only comes if the team is close.  Wyc doesn’t solely own the team, and the ownership group as a whole probably gets some say in the budget — when you have to get buy-in from multiple owners, the likelihood that ego causes extra spending is diluted.  The Nets, notably, are owned by one person.

[colincb]

My point is more that it's very difficult to prove or disprove the accuracy of those numbers. Sports teams come up for sale so rarely at this level that it really doesn't mean one thing or another. And operating income is largely speculation based on "revenue and operating income are for 2019-20 season and net of revenue sharing and arena debt service." *

found a citation:
https://www.forbes.com/teams/boston-celtics/?sh=10799c9c767b


The larger point that ownership is absolutely raking it in is entirely correct, though.

Revenue sharing benefits small market teams and is probably irrelevant to the Cs. Have no idea if there's debt service for the Cs. If there is, net income would be lower. It won't necessarily affect the valuations since they are not totally driven by expected future cash flows like valuations of other businesses. If it were, the valuations would be lower. IOW, there's a vanity or prestige element, and there's a location element much like real estate. There are other valuation models for sports franchises, but they're all subject to the same issues, especially the lack of comparable sales and reliable financial data.

[td450]

I'm starting to come around to the idea that the franchise would better letting Fournier walk and giving all the minutes/shots to Langford and Nesmith. I don't see how the C's become contenders without one or both of those guys becoming very good players.

It was a waste of TPE. No passing, no starting power forward. 

[PhoSita]

I'm starting to come around to the idea that the franchise would better letting Fournier walk and giving all the minutes/shots to Langford and Nesmith. I don't see how the C's become contenders without one or both of those guys becoming very good players.

It was a waste of TPE. No passing, no starting power forward.

I don't think the Celtics will be a contending team unless a third star becomes available and wants to force his way to Boston.  That's just the reality.

The question is whether the Celts have any interest in trying to be a very good team in the tier below contending squads, and whether they are willing to spend the money necessary to do that.

[Rikibellevie]

I'm starting to come around to the idea that the franchise would better letting Fournier walk and giving all the minutes/shots to Langford and Nesmith. I don't see how the C's become contenders without one or both of those guys becoming very good players.

It was a waste of TPE. No passing, no starting power forward.

I don't think the Celtics will be a contending team unless a third star becomes available and wants to force his way to Boston.  That's just the reality.

The question is whether the Celts have any interest in trying to be a very good team in the tier below contending squads, and whether they are willing to spend the money necessary to do that.

Not sure at all. First, I don't understand why only big 3 teams are contending. Many big 2 teams won it all. Tatum is clearly top 2/3 of the young future MVP candidate, when Brown has the ability to become a top 10/15 player for years to come. We just have to find the perfect complement to add defense, ballhandling and some hot shooters.
And for the "contending" most people said the 2 only contending teams in the West were Lakers and Clipps, maybe Nuggets. No one would have say that, about Phoenix or even Utah one year ago or even at the begening of the season. This teams will maybe fight to take a place in the NBA finals.

Again Danny didn't make any move last year TD because he wasn't believing we were contenders. With a little plus we could have been NBA finalist

[Kernewek]

My point is more that it's very difficult to prove or disprove the accuracy of those numbers. Sports teams come up for sale so rarely at this level that it really doesn't mean one thing or another. And operating income is largely speculation based on "revenue and operating income are for 2019-20 season and net of revenue sharing and arena debt service." *

found a citation:
https://www.forbes.com/teams/boston-celtics/?sh=10799c9c767b


The larger point that ownership is absolutely raking it in is entirely correct, though.

Revenue sharing benefits small market teams and is probably irrelevant to the Cs. Have no idea if there's debt service for the Cs. If there is, net income would be lower. It won't necessarily affect the valuations since they are not totally driven by expected future cash flows like valuations of other businesses. If it were, the valuations would be lower. IOW, there's a vanity or prestige element, and there's a location element much like real estate. There are other valuation models for sports franchises, but they're all subject to the same issues, especially the lack of comparable sales and reliable financial data.

Correct. I'm just quoting directly from Forbes since they were brought up.

[Celtics2021]

I'm starting to come around to the idea that the franchise would better letting Fournier walk and giving all the minutes/shots to Langford and Nesmith. I don't see how the C's become contenders without one or both of those guys becoming very good players.

It was a waste of TPE. No passing, no starting power forward.

The best move for the Celtics would be to either have him leave in a S&T or to bring him back for more tradable salary on a shorter deal.  Like 2 years, $25 million a year, 2nd year not guaranteed.  Huge tax bill, but that’s what this thread is about.  If you want to acquire someone who makes $30-$40 million, it’s really helpful to have a guy making $20-$25 million that’s of starterish quality.  The Celtics couldn’t make a Harden deal happen in part because only Brown or Kemba would make the salaries work.  Houston didn’t want Kemba, and Brown was too good to trade.  Brooklyn had Caris Levert, who’s not overpaid, but also not underpaid and thus fit into a trade nicely.