Author Topic: A renegotiated deal with Hayward is key to avoid repeater tax  (Read 698 times)

0 Members and 1 Guest are viewing this topic.

A renegotiated deal with Hayward is key to avoid repeater tax
« on: August 01, 2020, 10:33:48 AM »

Offline RodyTur10

  • Don Chaney
  • *
  • Posts: 1520
  • Tommy Points: 190
  • Always offline from 9pm till 3am
First of all an overview of the Celtics salary structure for next season (currently based on the salary cap staying at $109.1M and luxury tax at $132.6M). Blue: player options, Green: team options, Red: renounced Wanamaker, Black: dead cap, Pink: minimum deals Waters/Fall, Yellow: rookie scale on projected picks.

PLAYER2020/2021
Kemba Walker34.38
Gordon Hayward34.19
Jaylen Brown23.88
Marcus Smart12.95
Jayson Tatum9.90
Enes Kanter5.01
Daniel Theis5.00
Romeo Langford3.63
Vincent Poirier2.62
Grant Williams2.50
Robert Williams2.03
Semi Ojeleye1.75
Carsen Edwards1.52
Javonte Green1.52
Brad Wanamaker0
Guerschon Yabusele1.04
Demetrius Jackson0.10
Tremont Waters0.90
Tacko Fall0.90
#17 pick2.45
#26 pick1.68
#30 pick1.60
TOTALS149.55

With Yabusele, Jackson as dead cap and assuming Wanamaker is leaving, that's 19 (potential) players directly in the mix for 15 roster spots. After reducing this to 15 players (making some decisions on the lower end of the roster and picks) the Celtics will always be well over $140M in salary and thus in the luxury tax => repeater tax.

Trading some small contracts or stashing picks can save a million here and there, but that's not going to make a big difference. If Kanter leaves (not exercising player option/traded) that's not enough and picking up the team option of Theis for the Celtics is basically a no-brainer to not leave a huge hole at the center spot (and even without Kanter and Theis it creates very little wiggle room for the Celtics to operate).

The only ways for the Celtics to get under that luxury tax is trading one of our core guys (Walker, Hayward, Brown, Smart or Tatum) and take less salary back or get an agreement with Hayward for an extension on a lower annual salary. I think the majority of us want the latter and it should be feasible. Pre-crisis I estimated that Hayward could possibly get a new contract on the open market at about 15-25 million a year (his max days are over). Right now I'd think it would be on the lower end of that.

For the Celtics it could be interesting to opt for a 3-year deal and thus having Walker and Hayward expiring at the same time to create cap space in the summer of 2023 (although with all this uncertainty in the world it remains to be seen what that's worth with Tatum (upcoming max) and Brown on large contracts).

The salary number for Hayward next year needs to drop to at least $28M or less. At around $23M the Celtics can afford to keep Kanter and fill out the roster without much problems (while still having to make decisions what to do with their picks and players like Waters, Langford, Edwards, Green, Ojeleye, G.Williams, R.Williams, Poirier and Fall). In that 25-28 million range it's (probably) necessary to trade Kanter (and Poirier). 

So ideally Gordon Hayward signs a new contract for 70/3 ($23.3 million a year). Which would be 36 million for 2 extra years added to his player option of 34 million. Although Hayward's agent will probably think getting more than 18 million a year on the open market in 2021 is easily achievable, it's still guaranteed money right now.

In the current NBA climate it's hard to say what players will accept. Personally I think Hayward would only accept something in the 25-28 million a year range and that Kanter needs to go to avoid the repeater tax. I assume ownership wanting to avoid repeater tax is a priority for them, if not this post is a complete waste of time  ;D.
« Last Edit: August 01, 2020, 10:43:38 AM by RodyTur10 »
Rationalism over beliefs

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #1 on: August 01, 2020, 10:45:24 AM »

Online Roy H.

  • Forums Manager
  • James Naismith
  • *********************************
  • Posts: 41868
  • Tommy Points: -27135
  • 33,333 posts and counting . . .
Lots of good analysis here, but why the focus on the repeater tax?  Aren’t we well below the luxury tax this year?  I think we’ve only been above the tax line once in recent memory (last year)
Once a CrotoNat, always a CrotoNat. CelticsBlog Draft Champions, 2009 & 2012.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #2 on: August 01, 2020, 10:57:13 AM »

Offline BitterJim

  • NGT
  • Tiny Archibald
  • *******
  • Posts: 7845
  • Tommy Points: 1030
First of all an overview of the Celtics salary structure for next season (currently based on the salary cap staying at $109.1M and luxury tax at $132.6M). Blue: player options, Green: team options, Red: renounced Wanamaker, Black: dead cap, Pink: minimum deals Waters/Fall, Yellow: rookie scale on projected picks.

PLAYER2020/2021
Kemba Walker34.38
Gordon Hayward34.19
Jaylen Brown23.88
Marcus Smart12.95
Jayson Tatum9.90
Enes Kanter5.01
Daniel Theis5.00
Romeo Langford3.63
Vincent Poirier2.62
Grant Williams2.50
Robert Williams2.03
Semi Ojeleye1.75
Carsen Edwards1.52
Javonte Green1.52
Brad Wanamaker0
Guerschon Yabusele1.04
Demetrius Jackson0.10
Tremont Waters0.90
Tacko Fall0.90
#17 pick2.45
#26 pick1.68
#30 pick1.60
TOTALS149.55

With Yabusele, Jackson as dead cap and assuming Wanamaker is leaving, that's 19 (potential) players directly in the mix for 15 roster spots. After reducing this to 15 players (making some decisions on the lower end of the roster and picks) the Celtics will always be well over $140M in salary and thus in the luxury tax => repeater tax.

Trading some small contracts or stashing picks can save a million here and there, but that's not going to make a big difference. If Kanter leaves (not exercising player option/traded) that's not enough and picking up the team option of Theis for the Celtics is basically a no-brainer to not leave a huge hole at the center spot (and even without Kanter and Theis it creates very little wiggle room for the Celtics to operate).

The only ways for the Celtics to get under that luxury tax is trading one of our core guys (Walker, Hayward, Brown, Smart or Tatum) and take less salary back or get an agreement with Hayward for an extension on a lower annual salary. I think the majority of us want the latter and it should be feasible. Pre-crisis I estimated that Hayward could possibly get a new contract on the open market at about 15-25 million a year (his max days are over). Right now I'd think it would be on the lower end of that.

For the Celtics it could be interesting to opt for a 3-year deal and thus having Walker and Hayward expiring at the same time to create cap space in the summer of 2023 (although with all this uncertainty in the world it remains to be seen what that's worth with Tatum (upcoming max) and Brown on large contracts).

The salary number for Hayward next year needs to drop to at least $28M or less. At around $23M the Celtics can afford to keep Kanter and fill out the roster without much problems (while still having to make decisions what to do with their picks and players like Waters, Langford, Edwards, Green, Ojeleye, G.Williams, R.Williams, Poirier and Fall). In that 25-28 million range it's (probably) necessary to trade Kanter (and Poirier). 

So ideally Gordon Hayward signs a new contract for 70/3 ($23.3 million a year). Which would be 36 million for 2 extra years added to his player option of 34 million. Although Hayward's agent will probably think getting more than 18 million a year on the open market in 2021 is easily achievable, it's still guaranteed money right now.

In the current NBA climate it's hard to say what players will accept. Personally I think Hayward would only accept something in the 25-28 million a year range and that Kanter needs to go to avoid the repeater tax. I assume ownership wanting to avoid repeater tax is a priority for them, if not this post is a complete waste of time  ;D.

Since it's really only the first year of Hayward's deal that we need to worry about next season (and we have Bird Rights to allow 8% raises), we could give him a 3/75 deal without going over a $23.3 million cap hit. I think we'll need to be more in that range for Gordon to take the deal (or maybe a bit lower per year if we had a third or fourth year player option)

If we can stash a pick and trade away Poirier and Javonte Green's contracts, I think we'll be in good shape, but it's also possible that the cap drops and we're better off just paying the tax
I'm bitter.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #3 on: August 01, 2020, 11:12:46 AM »

Offline RodyTur10

  • Don Chaney
  • *
  • Posts: 1520
  • Tommy Points: 190
  • Always offline from 9pm till 3am
Lots of good analysis here, but why the focus on the repeater tax?  Aren’t we well below the luxury tax this year?  I think we’ve only been above the tax line once in recent memory (last year)

Repeater tax is 'awarded' to teams that have been in the luxury tax for 3 of their last 4 seasons.
Currently the Celtics have indeed only been over the luxury tax in 2019 (2018/2019 season).

So if the Celtics can stay out of the luxury tax next year that means that they can avoid to pay repeater tax for two more years, when the Celtics could be in the luxury tax for a couple of years after Tatum's extension and keeping Hayward.

See example:

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: luxury tax
2021/2022: luxury tax (+ repeater tax)
2022/2023: luxury tax (+ repeater tax)
2023/2024: luxury tax (+ repeater tax)

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: below
2021/2022: luxury tax
2022/2023: luxury tax
2023/2024: luxury tax (+ repeater tax)

So staying below the luxury tax level for two years in a row will save you from repeater tax for the next 2 years.

Edit: maybe in 2023/2024 the Celtics can get below the luxury tax again, because Walker's huge contract ends in 2023.
« Last Edit: August 01, 2020, 11:25:00 AM by RodyTur10 »
Rationalism over beliefs

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #4 on: August 01, 2020, 11:19:44 AM »

Online Roy H.

  • Forums Manager
  • James Naismith
  • *********************************
  • Posts: 41868
  • Tommy Points: -27135
  • 33,333 posts and counting . . .
Lots of good analysis here, but why the focus on the repeater tax?  Aren’t we well below the luxury tax this year?  I think we’ve only been above the tax line once in recent memory (last year)

Repeater tax is 'awarded' to teams that have been in the luxury tax for 3 of their last 4 seasons.
Currently the Celtics have indeed only been over the luxury tax in 2019 (2018/2019 season).

So if the Celtics can stay out of the luxury tax next year that means that they can avoid to pay repeater tax for two more years, when the Celtics could be in the luxury tax for a couple of years after Tatum's extension and keeping Hayward.

See example:

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: luxury tax
2021/2022: luxury tax (+ repeater tax)
2022/2023: luxury tax (+ repeater tax)
2023/2024: luxury tax (+ repeater tax)

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: below
2021/2022: luxury tax
2022/2023: luxury tax
2023/2024: luxury tax (+ repeater tax)

So staying below the luxury tax level for two years in a row will save you from repeater tax for the next 2 years.

I’ve seen this explained two ways.  The first is how you suggest:  teams pay repeater tax in the third out of four seasons.  The other interpretation is that being in the tax those three seasons triggers the tax for the next season, meaning a team doesn’t actually pay the repeater penalty unless they’ve been over the tax four out of five seasons.

For instance:

Quote
One of the key components to the luxury tax is the repeater tax – if a team has been a taxpayer in three of the past four seasons, then they are subject to the repeater tax in that fifth year, which institutes harsher financial penalties.

https://earlybirdrights.com/2019/11/29/idea-sliding-luxury-tax-repeater-tax-nba/

Once a CrotoNat, always a CrotoNat. CelticsBlog Draft Champions, 2009 & 2012.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #5 on: August 01, 2020, 11:21:44 AM »

Offline RodyTur10

  • Don Chaney
  • *
  • Posts: 1520
  • Tommy Points: 190
  • Always offline from 9pm till 3am
Since it's really only the first year of Hayward's deal that we need to worry about next season (and we have Bird Rights to allow 8% raises), we could give him a 3/75 deal without going over a $23.3 million cap hit. I think we'll need to be more in that range for Gordon to take the deal (or maybe a bit lower per year if we had a third or fourth year player option)

If we can stash a pick and trade away Poirier and Javonte Green's contracts, I think we'll be in good shape, but it's also possible that the cap drops and we're better off just paying the tax

Not certain how much cap space the Celtics could possibly have in 2023, when they have Brown, Tatum (max), Smart (extension), some rookies contracts and Langford/G.Williams cap holds (?). Will a player option really impact the Celtics at that time? (on the other hand you might now want a 33-year old Hayward at 20+ on the roster then).

Hadn't thought about Hayward's bird rights to offer annual raises (so TP for you), nonetheless that Celtics payroll is looking to become enormous quite soon.
Rationalism over beliefs

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #6 on: August 01, 2020, 11:58:20 AM »

Offline footey

  • Ed Macauley
  • ***********
  • Posts: 11079
  • Tommy Points: 1400
If Tatum keeps going 1/17 there will be no issue, LOL.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #7 on: August 01, 2020, 12:27:42 PM »

Offline RodyTur10

  • Don Chaney
  • *
  • Posts: 1520
  • Tommy Points: 190
  • Always offline from 9pm till 3am
Lots of good analysis here, but why the focus on the repeater tax?  Aren’t we well below the luxury tax this year?  I think we’ve only been above the tax line once in recent memory (last year)

Repeater tax is 'awarded' to teams that have been in the luxury tax for 3 of their last 4 seasons.
Currently the Celtics have indeed only been over the luxury tax in 2019 (2018/2019 season).

So if the Celtics can stay out of the luxury tax next year that means that they can avoid to pay repeater tax for two more years, when the Celtics could be in the luxury tax for a couple of years after Tatum's extension and keeping Hayward.

See example:

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: luxury tax
2021/2022: luxury tax (+ repeater tax)
2022/2023: luxury tax (+ repeater tax)
2023/2024: luxury tax (+ repeater tax)

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: below
2021/2022: luxury tax
2022/2023: luxury tax
2023/2024: luxury tax (+ repeater tax)

So staying below the luxury tax level for two years in a row will save you from repeater tax for the next 2 years.

I’ve seen this explained two ways.  The first is how you suggest:  teams pay repeater tax in the third out of four seasons.  The other interpretation is that being in the tax those three seasons triggers the tax for the next season, meaning a team doesn’t actually pay the repeater penalty unless they’ve been over the tax four out of five seasons.

For instance:

Quote
One of the key components to the luxury tax is the repeater tax – if a team has been a taxpayer in three of the past four seasons, then they are subject to the repeater tax in that fifth year, which institutes harsher financial penalties.

https://earlybirdrights.com/2019/11/29/idea-sliding-luxury-tax-repeater-tax-nba/

I see, my explanation was wrong. The repeater tax is indeed based on being in the luxury tax in 3 of the last 4 previous seasons (the word "previous" is omitted in a lot of articles, which creates confusion).

In that case the Celtics would still extend the repeater tax for 2 years. Instead of 2022/23, the earliest the Celtics would qualify for the repeater tax would be at 2024/2025:

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: luxury tax
2021/2022: luxury tax
2022/2023: luxury tax (+ repeater tax)
2023/2024: luxury tax (+ repeater tax)

2017/2018: below
2018/2019: luxury tax
2019/2020: below
2020/2021: below
2021/2022: luxury tax
2022/2023: luxury tax
2023/2024: luxury tax
Rationalism over beliefs

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #8 on: August 01, 2020, 01:49:36 PM »

Online Csfan1984

  • Paul Silas
  • ******
  • Posts: 6806
  • Tommy Points: 151
I am kind of in the mind that if he opts into his last year you trade him. If he opts out and wants to sign a 4 year deal at under $23 million per year than you resign him. So it's all up to Hayward for me. Would be nice to sign and trade him if he finds a higher bidder but if team is over the cap there are restricted options.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #9 on: August 01, 2020, 02:03:40 PM »

Offline jambr380

  • Danny Ainge
  • **********
  • Posts: 10124
  • Tommy Points: 1256
  • Sometimes there's no sane reason for optimism
TP for giving this subject its own thread and laying out all of the details. Since it is quite possible for the Cs to stay under the tax next season without affecting the overall structure of our roster, I believe Danny will make every effort possible to do so.

With Brown's and Tatum's extensions kicking in soon, there likely won't be another opportunity to get below the tax again. Of course that could change if Hayward just left after his contract, but I do think the Cs would prefer to keep him around.

While we do have a very good team right now, it would be a shame to not look towards the future when we will most certainly need to be in the tax. Pushing the repeater tax a couple of years down the road could really make a big difference in how much money ownership is willing to spend. Of course if we come close to winning the title this year, then maybe management will make the determination that now is as good of a time as any to go for all-in.

Re: A renegotiated deal with Hayward is key to avoid repeater tax
« Reply #10 on: August 01, 2020, 02:09:16 PM »

Offline jambr380

  • Danny Ainge
  • **********
  • Posts: 10124
  • Tommy Points: 1256
  • Sometimes there's no sane reason for optimism
I am kind of in the mind that if he opts into his last year you trade him. If he opts out and wants to sign a 4 year deal at under $23 million per year than you resign him. So it's all up to Hayward for me. Would be nice to sign and trade him if he finds a higher bidder but if team is over the cap there are restricted options.

This has been my take as well and I had previously come up with some possible options on where he could be traded (I would have to look up those deals again - I believe one of them was to ORL for Aaron Gordon. Don't shoot!  :D  And another was for one of the Indy bigs)

However, if the plan is just to let Hayward walk at the end of his contract (maybe the Cs don't want to take chances with him on a mega contract as he ages), then we should be able to get back under after next season - even with Tatum's extension kicking in. It seems somewhat unreasonable for Hayward to pick up his extension AND for the Cs to sign him to a big multi-year deal in 2021. I'd imagine it's one or the other, and we should find out this off-season what that decision is.