Celtics' hard decisions in luxury tax battle: Hollinger from the Athletic

[rocknrollforyoursoul]

Boston’s lone spend would be using it’s $5.7 million taxpayer exception on a combo guard.

This is hilarious. Does Hollinger not pay attention to Boston? Half of Danny's picks in recent years have been "combo guards"—more specifically, combo guards who can't shoot. We definitely don't need anymore of those.

As for the overall financial picture, I admit that I'm not well versed in the fine points of NBA economics—contracts, luxury tax, etc.—but it seems to me that finances are always "an impediment" for Boston, and I don't understand why. Doesn't matter if the Cs are rebuilding, retooling, or contending, there's always talk such as "Well, Boston can't do X because of [insert financial reason]." Seems like we're always limited to draft picks and scrap heap/castoff players. Like, we can't even afford Kyle Korver, so forget about getting a great bench guy like Lou Williams.

I'm presuming that other teams have to deal with similar issues, because they have to play by the same rules, yet finances don't seem to be "an impediment" for teams like the Lakers and Heat and Bucks when it comes to things like building a good bench. Maybe you all can enlighten me.

[Roy H.]

In 2019 the Celtics made $88 million in profit, not including accounting tricks.  The year before they made 100 million, and the year before that they had $85 million in profit. The Celtics have been profitable every single year that Wyc has owned the team.


The team has made around $700 million in profit since 2002, again not including whatever the team has made from his other ventures not related strictly to basketball income.

$700 million in profits and $2.7 billion in appreciation.  And yet we can’t afford to pick the number 14 pick in the draft? Come on. I thought we were an educated fan base.

[PhoSita]

I suggest anybody who is interested in the Celtics' long term team building / cap picture check out Ryan Bernardoni's 3 part off-season series, which is super comprehensive and well explained:

https://www.dangerc.art/post/celtics-offseason-preview-part-1-the-boring-stuff



Here's what he wrote about the luxury tax:

First, the team will be in the luxury tax and so the only way to sign free agents would be the Taxpayer MLE (A maximum of three seasons starting at $5.7M in this hypothetical) or the Minimum Exception. The Non-taxpayer MLE and Bi-annual Exception both invoke an untenable hard cap and so cannot be used without other significant steps being taken first.


Acquiring a player via sign-and-trade also triggers that same hard cap and so would be challenging to work with. The outgoing player(s) in that trade would likely have to make more than the player being received to relieve some of that pressure. It's not mathematically impossible to build an offseason where a sign-and-trade acquisition happens but it's not worth discussing unless other moves happen first.


The roster crunch is the main driver in a lot of decisions. There isn't space to carry 3-4 second year players plus three rookies within the 15 man roster of a contender, of course. Everyone who looks at this roster knows that a consolidation trade, trade to roll picks into the future, or multiple draft-and-stash picks are necessary. They might also have to use a draft pick to dump a salary like year with Aron Baynes, though now it would be for roster spot and budget reasons, not to clear cap space for a max signing.

[PhoSita]

if your goal is a championship you have to pay the luxury tax. If that is what ownership is worrying about then clearly a championship is not the #1 goal.

False dilemma. You also want to be sure that you have a championship-caliber team when you commit to the luxury tax, otherwise you've limited and hurt your flexible to improve your team.

Exactly -- you need to be prepared to pay the luxury tax when your team is good enough to win a title.

The Celts are in that zone.

Play too stingy right now and they won't be in that zone for long, because Tatum will start eyeing the door and we know what happens when superstars decide they might rather play elsewhere.

[NKY fan]

if your goal is a championship you have to pay the luxury tax. If that is what ownership is worrying about then clearly a championship is not the #1 goal.

False dilemma. You also want to be sure that you have a championship-caliber team when you commit to the luxury tax, otherwise you've limited and hurt your flexible to improve your team.

Exactly -- you need to be prepared to pay the luxury tax when your team is good enough to win a title.

The Celts are in that zone.

Play too stingy right now and they won't be in that zone for long, because Tatum will start eyeing the door and we know what happens when superstars decide they might rather play elsewhere.

Danny might be one of the few GMs perfectly ok with that. He loves trading for draft picks and rebuilding 😬

[PhoSita]

Danny might be one of the few GMs perfectly ok with that. He loves trading for draft picks and rebuilding 😬

I know this is the easy joke line about "Trader Danny" -- although people can't seem to decide if Danny likes trading too much or too little -- but Danny engineered the trades that started the KG era and then kept that team in the "competing for a title" zone for 4-5 seasons despite the age of the stars. 

I think there's even an argument to be made that Danny's focus on veterans over trying to bring in youth during the KG run actually hurt the team to a certain extent.


Anyway, Danny is in his 70s and has already had a couple heart attacks.  I don't think he's planning to stay in his position for too much longer and I dont' think he wants to rebuild again.  Building this team around Tatum and Brown was not Plan A.  Danny clearly wanted to try for a title with Kyrie, Hayward, and Horford. 

Then, when that got ruined due to Hayward's injury, he aimed for Kyrie and Davis.  Unfortunately that didn't pan out either, thanks to Kyrie being an all-time weirdo and LeBron / Klutch taking over and guaranteeing that AD ended up in LA.


Thankfully, the Celtics are in an all-time lucky position of having their two main plans for building a contender fall through only to have the third plan still leave them with the talent to contend and a relatively open window to do it in.  I don't expect Danny to let that go easily, since if Tatum leaves early the Celts are in for an extended reset.

[Moranis]

if your goal is a championship you have to pay the luxury tax. If that is what ownership is worrying about then clearly a championship is not the #1 goal.

False dilemma. You also want to be sure that you have a championship-caliber team when you commit to the luxury tax, otherwise you've limited and hurt your flexible to improve your team.

Exactly -- you need to be prepared to pay the luxury tax when your team is good enough to win a title.

The Celts are in that zone.

Play too stingy right now and they won't be in that zone for long, because Tatum will start eyeing the door and we know what happens when superstars decide they might rather play elsewhere.

Is Boston really good enough to win a title?  Even assuming Tatum continues his upward progression, is he going to really jump up into that top 5 player discussion that he really needs to be in, for Boston to really be a true and legit contender.  Even if he does, is him with Brown, Walker, and a bunch of role players (or super injury prone players like Hayward) and an otherwise ill fitting roster really going to compete with the LA's, Milwaukee, Brooklyn, etc. next year.  I mean even if Tatum takes a huge leap is he going to be better than Davis, Lebron, Giannis, or Kawhi next year?  What about Durant or Curry or Harden?  Is he even going to be better than Embiid, Simmons, George, Butler?  Is Boston going to be better than Denver?  What about Philly with a coaching upgrade like Doc (and still having two top 15 players)?  Presumably, Bam, Herro, and Robinson are all going to be better putting Miami right there again?

I honestly don't see Boston realistically competing for a title next year, which is why Boston should be looking to really and truly build around Tatum and Brown, something Ainge has consistently not done.  He has continued his trend of trying to win now by sacrificing the future.  And by doing that he has significantly harmed the championship window of a team built around Tatum and Brown.  I just worry that when Tatum and Brown are truly good enough to lead a team to a title, the cupboards are just going to be too bare and the team will be too hamstrung financially that it won't be able to effectively build a team around the stars and that the stars just won't be collectively good enough for it to not matter (Lebron is probably the only player in history where supporting cast doesn't really matter, he is truly a unicorn in that regard).  The Danny Ainge philosophy of the last 5 or 6 years of trying to have your cake and eat it too, just isn't working.  It has been time for him to make a decision for years, he has to do it this off season or he should retire.  This really is the last point in time before it is too late.

[PhoSita]

Is Boston really good enough to win a title?

With the right supporting cast and some luck, yes.

Tatum has hit that zone where he can put up 30 / 10 / 5 on efficient scoring over the course of a playoff series or even an entire playoff run. 



Once you have a guy like that in place it's a matter of having the right supporting cast, earning a favorable route to the Finals, and enjoying some luck with injuries.


I see the Celts in that Mavericks zone where they are never going to be the favorite, but if their best player gets really hot and some things go their way, they can make the Finals and have a chance to win a hard fought series.

How many people thought of Dirk Nowitzki as a top 5 player in the league before the 2011 playoff began?  I think people generally thought of him a superstar player who was in the top 10 discussion but not among the uppermost tier.  That didn't matter because during the four series the Mavs won on the way to the title, Dirk was the best player in the world.

A similiar thing happened with Paul Pierce in 08, although KG was obviously a huge component and better than anybody playing next to Dirk on that Mavs team.


Name of the game now is to maximize the team around Tatum and keep him happy and under contract for as long as possible.

[BitterJim]

What hollinger doesn’t mention is all these seasons that we were barely above the salary floor. Owners should have built up their rainy day fund. More than enough to pay luxury taxes for a few years.

What years were those? We've dipped below the cap during a couple of offseasons, but we haven't been anywhere near the salary floor in Ainge's entire tenure (and he dipped below for the first time when we signed Horford in 2016, hence all of the old holds we had to renounce). 2016-17 was the only time we finished a season under the cap, and that was by a whopping $1.1 million (still keeping us well over $8 million above the floor)

For a team that consistently plays 15+ playoff games we have been outside top 10/ top 20 in payroll more often than not. Ok they were above the floor by 7-10 mill in 6 of the last 8 seasons but you get the idea. Money should not be an issue for them in the next 5-6 years. If it is they have been mismanaged financially.
Also do you really want to turn into OKC failure to launch? They gave away harden for peanuts because of 5-6 extra million dollars to get him to his 4 yr max extension was too much... Cuban dismantled his championship team in 2012 because he was afraid of some mere $2-3 mill a year in luxury tax.
I would say Celtics should be ok with up to $50 mill a year ( if not more) in tax payments if they are making finals runs

I didn't say anything about how much tax the Celtics have paid in the past few years, I said that you made up "all those seasons that we were barely above the salary floor".

The team should absolutely be willing to pay tax for a contender, and we should be one next year. But you also have to keep in mind that the repeater tax is harsh, and down the line that may mean tough decisions for the team (not on the scale of trading Harden, but more on the scale of not signing a 2011-12 David West-type of guy that could put us over the top). We can talk all we want about how it's not a big deal for ownership to pay the tax, but at the end of the day we don't control how we spend their money.

[RodyTur10]

Thanks for posting this. Very good article.

First thing is that I don't get why Ainge didn't get the Celtics out of the tax last year. Simply moving Morris would have been enough (and that also would have yielded another pick). He must have known about all the internal struggles in the locker room, but did absolutely nothing with that information and just stubbornly let it play out with false hope that the present talent would overcome those difficulties eventually.

By the way, I find it a good thing that teams get punished harshly for having four (almost) max contracts on the roster.
Philadelphia (Embiid, Harris, Simmons, Horford) and Golden State (Curry, Thompson, Green, Wiggins) have a ridiculous payroll and should pay up for not being able to properly manage their salaries.

Same goes for Boston with Walker, Brown, Hayward and Tatum. I'd like to re-sign Hayward (70/3 or something) or trade him, where I prefer the first option. But as this article illustrates getting us out of the luxury tax next season to avoid repeater taxes in 2023 and beyond, would save the owners money it would bring a huge luxury tax if Hayward were to be re-signed for like $20M a year.

Therefore trading Hayward (just as an example) for guys like Vucevic, Gobert, Hield or Turner still brings longterm tax issues. In fact you'd need to trade Hayward with the objective to lower the payroll this year and upcoming years. Possibly Otto Porter, Adams, Aldridge, Dieng, Olynyk, Gay+Mills, Rose+Snell or Redick emerge as options then.

Do nothing and just let Hayward leave at the end of the season and try to get below the luxury tax level the following year (2021-22 season) has become more difficult now that Tatum will get 5% more of the cap due to his All NBA selection (can we protest that?). It might still be possible (depending on cap increase), but it would require to fill 8 roster spots while having $120M locked up in Walker, Tatum, Brown, Smart, Langford, Rob Williams, Grant Williams (and Yabusele dead cap) alone.

It's indeed a very difficult situation for the Celtics. But one thing I know is that Tatum and Brown are our nr 1 and nr 2. I'm not sure why Ainge didn't follow up with trades for veteran role players after he signed Walker as a win-now move, but with all the injury concerns around both Walker and Hayward I don't find them as hugely important to our team given the situation now.

At all cost we must avoid a future situation where we could not re-sign Smart or having to consider to trade Brown as a result of tax implications. Neither should the team be limited in its resources to accommadate Tatum and Brown when they hit their prime as a consequence of moves we made or didn't make in the present.

My path would be to just focus on the development of Brown, Tatum, Smart, but also Robert Williams, Langford, Grant Williams and picks we make in the draft. I'm not confident that our chances to win a title next year would improve in comparison to this year without making moves that could jeopardize our future. Walker and Hayward haven't shown that they can lead this team when it matters. I like both of them, but due to financial and injury issues I don't trust them to be a vital part of a championship team.

I'd ship the veterans Walker, Hayward, Kanter, Ojeleye and maybe even Theis for the right trade to make room for our youngsters. We kept all those picks year after year, might as well use them.

Smart/Langford/Brown/Tatum/G.Williams/R.Williams + 3 first rounders is not a bad foundation for a future real contender.

[BitterJim]

At the end of the day, I think it comes down to this: if we're gonna be in the tax this year, we may as well go whole hog. Bring in as much talent as you can without worrying about the tax bill (the one exception being trading low-salary guys with cash to teams with cap space, that's a purely financial move with little/no effect on the rotation).

If the team needs to, and can, avoid the tax without impacting the team's ability to contend now and later, then that might prove to be the right move. But I don't see any way that that happens (short of Hayward opting out and resigning for the right amount long term - him leaving wouldn't fit the criteria in italics). So I think we will be a tax team next year, repeater tax be [dang]ed. Hopefully that doesn't come back and bite us when Tatum enters his prime.

[Rondo9]

if your goal is a championship you have to pay the luxury tax. If that is what ownership is worrying about then clearly a championship is not the #1 goal.

False dilemma. You also want to be sure that you have a championship-caliber team when you commit to the luxury tax, otherwise you've limited and hurt your flexible to improve your team.

Exactly -- you need to be prepared to pay the luxury tax when your team is good enough to win a title.

The Celts are in that zone.

Play too stingy right now and they won't be in that zone for long, because Tatum will start eyeing the door and we know what happens when superstars decide they might rather play elsewhere.

Is Boston really good enough to win a title?  Even assuming Tatum continues his upward progression, is he going to really jump up into that top 5 player discussion that he really needs to be in, for Boston to really be a true and legit contender.  Even if he does, is him with Brown, Walker, and a bunch of role players (or super injury prone players like Hayward) and an otherwise ill fitting roster really going to compete with the LA's, Milwaukee, Brooklyn, etc. next year.  I mean even if Tatum takes a huge leap is he going to be better than Davis, Lebron, Giannis, or Kawhi next year?  What about Durant or Curry or Harden?  Is he even going to be better than Embiid, Simmons, George, Butler?  Is Boston going to be better than Denver?  What about Philly with a coaching upgrade like Doc (and still having two top 15 players)?  Presumably, Bam, Herro, and Robinson are all going to be better putting Miami right there again?

I honestly don't see Boston realistically competing for a title next year, which is why Boston should be looking to really and truly build around Tatum and Brown, something Ainge has consistently not done.  He has continued his trend of trying to win now by sacrificing the future.  And by doing that he has significantly harmed the championship window of a team built around Tatum and Brown.  I just worry that when Tatum and Brown are truly good enough to lead a team to a title, the cupboards are just going to be too bare and the team will be too hamstrung financially that it won't be able to effectively build a team around the stars and that the stars just won't be collectively good enough for it to not matter (Lebron is probably the only player in history where supporting cast doesn't really matter, he is truly a unicorn in that regard).  The Danny Ainge philosophy of the last 5 or 6 years of trying to have your cake and eat it too, just isn't working.  It has been time for him to make a decision for years, he has to do it this off season or he should retire.  This really is the last point in time before it is too late.

It's funny how every team is a contender but the Celtics despite having two stars. It's amazing how good things don't apply to them.

[BitterJim]

Do nothing and just let Hayward leave at the end of the season and try to get below the luxury tax level the following year (2021-22 season) has become more difficult now that Tatum will get 5% more of the cap due to his All NBA selection (can we protest that?)

Protest what? The team offering him the 30% max, and instead signing him for 25% (or somewhere in between)? Or are you saying the team should protest the NBA for the CBA making him eligible?

No one is forcing us to sign Tatum for the 30% max, but it would irreparably damage the relationship if we didn't offer it (ditto if we tried to get the league and player's association to agree to CBA changes just to avoid paying Tatum what he's earned)

[libermaniac]

Anyway, Danny is in his 70s and has already had a couple heart attacks.  I don't think he's planning to stay in his position for too much longer and I dont' think he wants to rebuild again.

He's 61.

[libermaniac]

Do nothing and just let Hayward leave at the end of the season and try to get below the luxury tax level the following year (2021-22 season) has become more difficult now that Tatum will get 5% more of the cap due to his All NBA selection (can we protest that?)

Protest what? The team offering him the 30% max, and instead signing him for 25% (or somewhere in between)? Or are you saying the team should protest the NBA for the CBA making him eligible?

No one is forcing us to sign Tatum for the 30% max, but it would irreparably damage the relationship if we didn't offer it (ditto if we tried to get the league and player's association to agree to CBA changes just to avoid paying Tatum what he's earned)

He was joking, I assume.