Celtics could end up paying luxury tax? (Paging Celtics2021)

[Roy H.]

I posted when Marc Stein talked about something similar, but this is odd to me:

Bobby Marks@BobbyMarks42

Boston is $358K below the tax.

They become a tax team (which they will rightfully take) if they win the NBA Championship.

Brown has a NBA Championship bonus.

https://sports.yahoo.com/championship-cost-celtics-11m-luxury-180008129.html

I wonder, was there any way to avoid this?  Like, why not stretch Jabari Parker?  Obviously, the team is happy to pay the tax if we win a title, but it's just strange to trigger the repeater tax over NBA chump change.

[jbpats]

I'm by no means a cap expert. I feel like officiating reviews, the cap rules get made up as they go along..

That said, as simply as an opinion, I don't feel that same-season performance related bonuses should count against our future hard cap.

But for the sake of the conversation I also heard that Horford is now fully guaranteed next season, or will be if we win. Something in his contract about the NBA finals. Thats going to be a huge cap hit for a 36 year old. Something like 36 mil guaranteed vs. 14

[Roy H.]

I'm by no means a cap expert. I feel like officiating reviews, the cap rules get made up as they go along..

That said, as simply as an opinion, I don't feel that same-season performance related bonuses should count against our future hard cap.

But for the sake of the conversation I also heard that Horford is now fully guaranteed next season, or will be if we win. Something in his contract about the NBA finals. Thats going to be a huge cap hit for a 36 year old. Something like 36 mil guaranteed vs. 14

With Horford, his contract provided of three levels of guarantees for next season:

* $14.5 million out of $26.5 million guaranteed no matter what
* $19.5 million out of $26.5 million guaranteed if Celtics make the Finals
* $26.5 million out of $26.5 million guaranteed if Celtics win Finals

There have been some reports that the Celtics have already guaranteed the full $26.5 million no matter what happens in the Finals.

[timpiker]

I trust what Wyc said a long time ago...about if we are "contenders" the owners will pay the tax.  So I'm looking forward to more big happenings this summer. 

[Vermont Green]

Celtics2021 is my go to cap guy here.  He seems to have the best knowledge of all of this.  But here is the exact language regarding Brown's contract as reported on Spotrac:

Contract Notes:
$4 million likely incentives (plays 65 or more games, team wins 49 or more games and reaches second round of playoffs) [ LTBE = 65 games played + All-Star Game]
$8 million unlikely incentives (MVP, DPOY or one of three All-NBA Teams) (@ChrisHaynes)
2020-21: LTBE: $446,429 (65 games played), ULTBE: $2,232,143
2021-22: LTBE: $482,143 (65 games played), ULTBE: $964,286 + $1,446,428 (All-Star)
2022-23: LTBE: $1,380,952 (65 games played, 2nd Round, Conf Finals), ULTBE: $1,035,714 + $1,553,571 (All-Star)
2023-24: LTBE: $553,573 (65 games played, 2nd Round, Conf Finals), ULTBE: $1,107,143 + $1,660,714 (All-Star)

He played 66 games and we won over 49 games plus reached the second round so he gets the $4 but that incentive was considered "likely" so it was already figured in when we are $358K under the tax.

He was not MVP, DPOY, or an All Star so he did not get the $8M one.

I don't see anything here that says that for this season, if we make the finals or win the title, that there is an additional bonus related to that.  It is listed that way for 2022-23 and 2023-24, but not for 2021-22 (this season).  Spotrac is not official and may not be fully accurate but this is what I am seeing.  The entry for ULTBE for 2021-22 lists two values ($964,286 + $1,446,428) but then lists only one condition (All star) so that may be an incomplete description.  If one of those values is triggered by making the finals and the other by all star selection, then we would be over the tax.

[Smartacus]

I trust what Wyc said a long time ago...about if we are "contenders" the owners will pay the tax.  So I'm looking forward to more big happenings this summer.

To Roy's point though, this is not a question of if the owners should pay the tax or not. It's a matter of could the tax have been avoided this year even accounting for Jaylen's bonus structure.

Every consecutive year paid into the tax even by a small amount increases the penalty of the repeater tax so to pay any amount of tax this year that could have been avoided will put the team on the repeater tax clock a year earlier than what would have been necessary. This could end up hamstringing the team down the road if the Celtics are still a championship contender in 4 years but are staring down a Billion dollar tax bill.

[Celtics2021]

It’s curious.  What Marc Stein has beenreporting is very different than what Bobby Marks, John Hollinger, and Eric Pincus have reported about Jaylen’s bonuses.  Not saying he’s wrong, but they all have front office sources too.

[Moranis]

I'm going to go out on a limb and say that Boston wouldn't have made all of the signings when they made them if this was a real possibility.  They would have just waited or not made them at all to keep the team below the potential tax level for an essentially useless 15th roster spot.

[kraidstar]

If true it's a catastrophic clerical error by Brad Stevens. Getting to the repeater tax a year earlier is not good for this franchise.

And before anyone chimes in with the obvious "yeah, but if that means a title now I'll take it."

It's still a massive mistake that could hurt our ability to make deals down the road in the Jays' primes.

[kraidstar]

I'm going to go out on a limb and say that Boston wouldn't have made all of the signings when they made them if this was a real possibility.  They would have just waited or not made them at all to keep the team below the potential tax level for an essentially useless 15th roster spot.

You would hope so. If Fitts/Hauser/Stauskas/whoever end up costing us $80M in luxury tax down the road due to the repeater penalty then those were reckless signings indeed.

[jambr380]

If true - and it would be really odd if it were - is there any way to get under the tax before the new year begins?

[Celtics2021]

It’s curious.  What Marc Stein has beenreporting is very different than what Bobby Marks, John Hollinger, and Eric Pincus have reported about Jaylen’s bonuses.  Not saying he’s wrong, but they all have front office sources too.

If Marks has updated, then I guess that's the case.  The bonuses on Spotrac, which came from Eric Pincus, show that Jaylen could have up to $760k of unknown bonuses.  Players are allowed to have bonuses of up to 15% of their base salary.  In Jaylen's case, that means he could have $3.72 million in bonuses, whereas Spotrac/Pincus had him at $2.96 million.

This was very avoidable if that's true.  Signing Nik Stauskas to a rest of season deal instead of a multi-year deal would have covered it.  It's really weird that they might have made this error.

[Roy H.]

This was very avoidable if that's true.  Signing Nik Stauskas to a rest of season deal instead of a multi-year deal would have covered it.  It's really weird that they might have made this error.

Really?  Because it's subsidized vs. unsubsidized on a two year minimum?

[Celtics2021]

This was very avoidable if that's true.  Signing Nik Stauskas to a rest of season deal instead of a multi-year deal would have covered it.  It's really weird that they might have made this error.

Really?  Because it's subsidized vs. unsubsidized on a two year minimum?

Yep.  Since I don't have the total details Marks is using, they might have also needed to hold off on Juwan Morgan for a few days as well, but this was something that they should have been able to manage in early March.  They're $100-150k over if they win based on Marks and Stein, and they would have saved a shade over $100k if Stauskas were subsidized.

[jambr380]

Saw a post on Reddit this morning with a Keith Smith tweet saying that the Cs are indeed a tax team:

The Boston Celtics finished 2021-22 as a taxpayer at $216,630 over the luxury tax line. Incentives earned by Jaylen Brown and Derrick White pushed the Celtics over the tax line.

When you go to click on the tweet, it seems to have been removed. Obviously we knew this was possible if we won the Title - and this appears to be a mistake, as I don't see it reported anywhere else - but can you imagine if we were over the tax and didn't win? Oof, I am happy to see the tweet gone, but I would still like official word that this isn't the case.

Edit: Relief, just saw this posted under Smith:

After re-working some incentive information, the Boston Celtics did indeed just duck in under the luxury tax for 2021-22.

Sorry for the confusion yesterday. Bonuses can be tricky to figure.

Boston still currently projects to be a taxpayer in 2022-23, so not much changes there.

Seriously, Keith, this was way too causal for something that would have been an enormous deal. Maybe double check next time. You weren't going to be the guy to break this.