The ultimate question for Ownership (Luxury Tax)

[Green-18]

So I know Wyc makes the occasional appearance on 98.5 and other media outlets.  For me one of the most important questions going forward is regarding how deep into the luxury tax ownership is willing to go.  Has anyone heard Wyc or Danny discuss this issue publicly?  I know the the penalties are extremely harsh and ultimately the business needs to be profitable at a high level.

The thought of signing a max contract while being able to resign IT, Smart, and/or Avery is extremely intriguing but I am assuming it would be too much of a hit to the business for ownership.

[Cman]

I think this is a great question. They are probably willing to do a little bit of this, but they are not going to be paying $300M a year or whatever it is to sign a max FA and extend all the remaining players within the next few years. Just not going to happen. And I can't fault them or begrudge them that. This is a business, after all.

[KGs Knee]

If an owner isn't willing to spend whatever it takes, including paying the tax, they shouldn't be an owner.

Dan Gilbert, for as little as he knows about basketball, is the model owner in my opinion.

In the past, Wyc was willing to pay the tax, but that was under a different tax structure. Hopefully he is willing to put his money into the product, since you know, he's currently raking in money hand over fist, in addition to the exponential growth in franchise value he has seen during his tenure.

[Roy H.]

If an owner isn't willing to spend whatever it takes, including paying the tax, they shouldn't be an owner.

Dan Gilbert, for as little as he knows about basketball, is the model owner in my opinion.

In the past, Wyc was willing to pay the tax, but that was under a different tax structure. Hopefully he is willing to put his money into the product, since you know, he's currently raking in money hand over fist, in addition to the exponential growth in franchise value he has seen during his tenure.

Even Gilbert hasn't had unlimited spending capacity.

Wyc isn't a billionaire, and the Celtics don't own their own stadium. They simply can't afford to go deep into the tax for multiple years.

[Green-18]

If an owner isn't willing to spend whatever it takes, including paying the tax, they shouldn't be an owner.

Dan Gilbert, for as little as he knows about basketball, is the model owner in my opinion.

In the past, Wyc was willing to pay the tax, but that was under a different tax structure. Hopefully he is willing to put his money into the product, since you know, he's currently raking in money hand over fist, in addition to the exponential growth in franchise value he has seen during his tenure.

This new structure is significantly more harsh than the old one.  The Celtics yearly revenue is roughly 200 million.  Correct me if I am wrong but it sounds like the new penalty would potentially wipe away any profit.  They would most likely need to increase ticket prices and hopefully they would make more off of merchandise.  I believe Wyc would be willing to sacrifice a lot more than the rest of the ownership group.

[Granath]

So I know Wyc makes the occasional appearance on 98.5 and other media outlets.  For me one of the most important questions going forward is regarding how deep into the luxury tax ownership is willing to go.  Has anyone heard Wyc or Danny discuss this issue publicly? I know the the penalties are extremely harsh and ultimately the business needs to be profitable at a high level.

The thought of signing a max contract while being able to resign IT, Smart, and/or Avery is extremely intriguing but I am assuming it would be too much of a hit to the business for ownership.

No, and they never will. We know Wyc will enter the luxury tax territory but they'll never reveal publicly how deep. That would give information to opposing teams that they don't need to know.

[tazzmaniac]

The new tax structure is brutal.  I don't see ownership going much over the tax line even when we are a contender.  They certainly won't do it for the current team. 

[CelticsElite]

No ownership wants to spend on luxury tax. Period

[Chris22]

Doesn't Cleveland have the highest payroll in the league?

[droopdog7]

I think many owners would pay the luxury tax to keep a championship level team together.  At this time, that's clearly the Cavs and the Warriors.  The question is whether you want to get into that territory if you're not near an actual contender.  That's pretty much where we are and resigning the current core simply won't get it done.

We'll may still need a fair amount of luck (Fultz?) to get there.

[tazzmaniac]

Doesn't Cleveland have the highest payroll in the league?

Cleveland is this season.  Next season is Portland.  Over 140M when you include their 3 1st round picks.  Reports are they are looking at cutting Ezelli taking a 1M cap hit and trading one of their 1sts this year in a salary dump trade.  I wouldn't be surprised if they have to trade Crabbe and a 1st.   

Barely a playoff team and well over the cap.  They are royally screwed.  Some GM will fleece them. 

[bdm860]

If an owner isn't willing to spend whatever it takes, including paying the tax, they shouldn't be an owner.

Dan Gilbert, for as little as he knows about basketball, is the model owner in my opinion.

In the past, Wyc was willing to pay the tax, but that was under a different tax structure. Hopefully he is willing to put his money into the product, since you know, he's currently raking in money hand over fist, in addition to the exponential growth in franchise value he has seen during his tenure.

This new structure is significantly more harsh than the old one.  The Celtics yearly revenue is roughly 200 million.  Correct me if I am wrong but it sounds like the new penalty would potentially wipe away any profit.  They would most likely need to increase ticket prices and hopefully they would make more off of merchandise.  I believe Wyc would be willing to sacrifice a lot more than the rest of the ownership group.

You probably got the $200m from here.  These numbers are from 2016 season.  Just like the cap has spiked because of the new TV deal, so too will every teams' revenues, so I think that would make the C's revenue (and the league average) closer to $300m for this current season and beyond.