Celtics New TPE

[ozgod]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

[Celtics2021]

Otto Porter had a bad year in Toronto after a good one in GS. He makes 6.15m and might be gettable.

Wow, that would be great. I'd love Otto Porter.

Otto Porter is ALWAYS hurt.

I did not realize how much he was out injured these last few years. I knew he was out all last season. But he had a healthy year the year before in GS (63gms + playoffs) which is what stands out in my memory. But the two years before that 28 games and 56 14 games.

Man, he was always healthy early in his career. Almost 80 games a season for 4 straight years after missing time as a rookie.

I'd risk it. Not sure he is any less of an injury risk than Rob Williams, Brogdon or Porzingis. At least it is another body who may be healthy.

Fixed it for you.  14 games, not 56.

Man, I looked at that twice and felt that was wrong but couldn't see it. Thank you.

Yeah, that is a tough one. So only 1 healthy year out of the last 4. I'd rather bring Muscala back.

Warning:  don't look at KP's games played.  They're not as bad as Porter's, but they're in the ballpark.  (65, 51, 43, 57, 0, 48).  It's a good bet that he misses 20+ games this year.

It's why I'd like to bring in a more reliable 4th big man than Kornet.

Porzingis has played almost 2x as many games since '19-'20. Not sure that's the same ballpark tbh

Where do you start the clock?  KP has 216 games played since 2019, Porter has 169.  I'd call that ballpark.  Go back a year further, or count playoff games, and the gap decreases even more.

It's not a pretty picture for either.  It would be a bad idea to bring Porter on, and it's a bad idea not to have a backup plan for when KP has significant injury.

Well, the original discussion was about four years, so that’s why we started there.  But it also seems fair to look at post-knee injury Porzingis, as opposed to including the knee injury season that also had contractual and trade reasons contributing to his not playing.

He’s not been the bastion of health, and I think you’re right about him missing 20 games, and it’s why I felt and still feel they should have kept Grant.  But Porter has been able to handle regular reserve minutes once in the last four seasons, and should not be counted on at all.  If he were a free agent, sure, give him the minimum, but trading for him at a $6.1 million salary would be pure folly.

[Roy H.]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

The MLE would hardcap us at the second apron.

The TPE could be used to take us above the second apron.

However, in each instance, our committed salary and the second apron remain the same.

We have $177,459,126 committed toward active salaries (both guaranteed and non-guaranteed) plus dead money (Demetrius Jackson).

The Second Apron is $182,794,000.

However, if we're concerned about the MLE, we can't go a penny over $182,794,000, no matter what.  That means we need to account for unlikely bonuses, totaling $1,946,431, as they theoretically could be tacked on later in the season.  So, for hardcap purposes, we have $179,405,557 on the books currently.  That means we could use the MLE up to $3,388,443 as of right now.  (Waiving Kornet or Champagnie would increase that, although I think there's still a minimum roster charge that would then have to be applied.)

With the TPE, if Wyc absolutely wants to avoid the Second Apron (for the sole reason of saving luxury tax this season), Brad would be bound by the above spending limits.  If Wyc is willing to live with the risk of White and Timelord missing their unlikely bonuses, we could add up to another $1,946,431, meaning we could use up to $5,334,874 and still be below the Second Apron before unlikely bonuses are accounted for.

And, if Wyc wants to pay additional luxury tax, he can go as far above the Second Apron as he wants, so long as we don't utilize the MLE.  That would mean, at minimum, having access to the full $6.15 TPE and filling out the roster with vet minimums.

[BitterJim]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

TPEs have a cap hold (as does the MLE, and any rights we hold to FAs), but that's only used in cap space calculations, not in luxury tax or apron calculations.

[ozgod]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

The MLE would hardcap us at the second apron.

The TPE could be used to take us above the second apron.

However, in each instance, our committed salary and the second apron remain the same.

We have $177,459,126 committed toward active salaries (both guaranteed and non-guaranteed) plus dead money (Demetrius Jackson).

The Second Apron is $182,794,000.

However, if we're concerned about the MLE, we can't go a penny over $182,794,000, no matter what.  That means we need to account for unlikely bonuses, totaling $1,946,431, as they theoretically could be tacked on later in the season.  So, for hardcap purposes, we have $179,405,557 on the books currently.  That means we could use the MLE up to $3,388,443 as of right now.  (Waiving Kornet or Champagnie would increase that, although I think there's still a minimum roster charge that would then have to be applied.)

With the TPE, if Wyc absolutely wants to avoid the Second Apron (for the sole reason of saving luxury tax this season), Brad would be bound by the above spending limits.  If Wyc is willing to live with the risk of White and Timelord missing their unlikely bonuses, we could add up to another $1,946,431, meaning we could use up to $5,334,874 and still be below the Second Apron before unlikely bonuses are accounted for.

And, if Wyc wants to pay additional luxury tax, he can go as far above the Second Apron as he wants, so long as we don't utilize the MLE.  That would mean, at minimum, having access to the full $6.15 TPE and filling out the roster with vet minimums.

Great explanation, TP (gotta make a dent in those negatives  ) . In that case, my personal opinion is that the MLE won't get used at all. I could see the TPE being used mid season to pick up a player where a need has been demonstrated. I doubt it would be used beforehand, and it probably won't be used for a just-in-case or nice-to-have selection - I doubt those are things that Wyc and Brad would want to pay luxury tax for. But I could see it being used to pick up a vet ballhandler like Patty Mills ($6.8m) or Ricky Rubio ($6.1m)  if it became apparent that Brogdon and White need help and Payton isn't cutting it, or alternatively a big like a Javale McGee ($5.7m) or Precious Achiuwa ($4.3m) in the event of an injury to either KP, Al or Timelord. It probably won't be used for the sake of it in the offseason.

Though Patty might be bought out after being traded for the third time in a week or might not fit in that TPE in any case 

[ozgod]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

TPEs have a cap hold (as does the MLE, and any rights we hold to FAs), but that's only used in cap space calculations, not in luxury tax or apron calculations.

Gotcha, TP!

[Vermont Green]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

The MLE would hardcap us at the second apron.

The TPE could be used to take us above the second apron.

However, in each instance, our committed salary and the second apron remain the same.

We have $177,459,126 committed toward active salaries (both guaranteed and non-guaranteed) plus dead money (Demetrius Jackson).

The Second Apron is $182,794,000.

However, if we're concerned about the MLE, we can't go a penny over $182,794,000, no matter what.  That means we need to account for unlikely bonuses, totaling $1,946,431, as they theoretically could be tacked on later in the season.  So, for hardcap purposes, we have $179,405,557 on the books currently.  That means we could use the MLE up to $3,388,443 as of right now.  (Waiving Kornet or Champagnie would increase that, although I think there's still a minimum roster charge that would then have to be applied.)

With the TPE, if Wyc absolutely wants to avoid the Second Apron (for the sole reason of saving luxury tax this season), Brad would be bound by the above spending limits.  If Wyc is willing to live with the risk of White and Timelord missing their unlikely bonuses, we could add up to another $1,946,431, meaning we could use up to $5,334,874 and still be below the Second Apron before unlikely bonuses are accounted for.

And, if Wyc wants to pay additional luxury tax, he can go as far above the Second Apron as he wants, so long as we don't utilize the MLE.  That would mean, at minimum, having access to the full $6.15 TPE and filling out the roster with vet minimums.

Thanks for this Roy.  One thing I am not clear on though.  Is there something different about luxury tax requirements if we are over the apron vs. not over the apron?  Does the rate go up or is there a surcharge or something?  All added salary is taxable at this point, whether we are over the second apron or not, right?  But does the second apron trigger additional tax liabilities?  We are a tax payer now, that is why we can only use the tax payer MLE.  I am wondering if there is some aspect of the second apron related to tax charges that I don't understand.

[boscel33]

The Grant trade created a traded player exception (TPE) worth $6.2 million. Assuming ownership allows Brad to use it… I’d like the C’s go after Jalen Smith or Jordan Nwora. Any others?

Ownership will "allow" them to spend it just like the larger ones that expired over the past couple of years.  As long as Wyc and the gang are putting the Benjamin's in their pockets, I don't think they give two hoots!

[Roy H.]

I don't think they'll use it unless they dump further salary.  The Celts seemingly have no interest in going above the 2nd apron.

Isn't the TPE already counted as part of our salary cap though? I thought it was already baked in to the overall cap number which currently has us at $7m below the second apron. I thought it was the MLE that would cause us to go over the 2nd apron which is why it's unlikely to be used.

The MLE would hardcap us at the second apron.

The TPE could be used to take us above the second apron.

However, in each instance, our committed salary and the second apron remain the same.

We have $177,459,126 committed toward active salaries (both guaranteed and non-guaranteed) plus dead money (Demetrius Jackson).

The Second Apron is $182,794,000.

However, if we're concerned about the MLE, we can't go a penny over $182,794,000, no matter what.  That means we need to account for unlikely bonuses, totaling $1,946,431, as they theoretically could be tacked on later in the season.  So, for hardcap purposes, we have $179,405,557 on the books currently.  That means we could use the MLE up to $3,388,443 as of right now.  (Waiving Kornet or Champagnie would increase that, although I think there's still a minimum roster charge that would then have to be applied.)

With the TPE, if Wyc absolutely wants to avoid the Second Apron (for the sole reason of saving luxury tax this season), Brad would be bound by the above spending limits.  If Wyc is willing to live with the risk of White and Timelord missing their unlikely bonuses, we could add up to another $1,946,431, meaning we could use up to $5,334,874 and still be below the Second Apron before unlikely bonuses are accounted for.

And, if Wyc wants to pay additional luxury tax, he can go as far above the Second Apron as he wants, so long as we don't utilize the MLE.  That would mean, at minimum, having access to the full $6.15 TPE and filling out the roster with vet minimums.

Thanks for this Roy.  One thing I am not clear on though.  Is there something different about luxury tax requirements if we are over the apron vs. not over the apron?  Does the rate go up or is there a surcharge or something?  All added salary is taxable at this point, whether we are over the second apron or not, right?  But does the second apron trigger additional tax liabilities?  We are a tax payer now, that is why we can only use the tax payer MLE.  I am wondering if there is some aspect of the second apron related to tax charges that I don't understand.

Under the prior CBA, the tax rate increased every $5 million.  That doesn't align neatly with the second apron, so if the same system stays in place, teams would pay the same tax rate if they were below the apron by $1 million as they would if they were $1 million above the apron.

However, I think that part of the new CBA is adjusting the tax brackets, and I haven't had the time or desire to do a deep dive yet.

[Vermont Green]

The Grant trade created a traded player exception (TPE) worth $6.2 million. Assuming ownership allows Brad to use it… I’d like the C’s go after Jalen Smith or Jordan Nwora. Any others?

Jalen Smith from IND is an interesting option.  His salary is $5.3M.  IND drafted a PF (Jarace Walker) with the 8th pick and also traded for a PF (Obi Toppin), giving up 2 future second round picks.  Maybe they are ready to move on from Jalen Smith.  Statistically, Smith was kind of just OK for a bench PF last season.  I have not seen Smith play that much, don't feel I have a good read on what he can be, but in theory, seems very promising.

Nwora seems like a carbon copy of Brissett.  I don't see him as quite as good a fit for our needs.

[Vermont Green]

Thanks for this Roy.  One thing I am not clear on though.  Is there something different about luxury tax requirements if we are over the apron vs. not over the apron?  Does the rate go up or is there a surcharge or something?  All added salary is taxable at this point, whether we are over the second apron or not, right?  But does the second apron trigger additional tax liabilities?  We are a tax payer now, that is why we can only use the tax payer MLE.  I am wondering if there is some aspect of the second apron related to tax charges that I don't understand.

Under the prior CBA, the tax rate increased every $5 million.  That doesn't align neatly with the second apron, so if the same system stays in place, teams would pay the same tax rate if they were below the apron by $1 million as they would if they were $1 million above the apron.

However, I think that part of the new CBA is adjusting the tax brackets, and I haven't had the time or desire to do a deep dive yet.

I guess I still don't get the "staying under the second apron for the sole reason of saving luxury tax this season" statement.  The taxes paid have nothing to do with the second apron.  They may choose to avoid the second apron because of the draft pick and trade restrictions, but they are going to be paying tax no matter what.  In fact, they have already added to their tax bill with the trade for Porzingis.  Then they declined to overpay Grant, that decision could have been affected by tax implications, could have been the second apron, could have been both.  But unless I am missing something, I don't see how being under or over the second apron has anything to do with tax.

To me, ownership/management is paying attention to spending and tax bills, they are spending, but not spending recklessly (I feel signing Grant at $53M would have been reckless spending).  Tax is no doubt part of the equation when they consider adding any new player/spending.  I am fine with that.  It is still not clear how much the second apron is going to play into decisions moving forward, at least for this season.  I don't think they sign Grant to that contract, second apron or not.  Maybe they will use the second apron as an "excuse", but that is still just speculation at this point.

As to the TPE, the track record is pretty clear that they are not going to use the TPE just to use it, just to have a useless contract for some other future trade.  You can debate whether that is the right thing for ownership to do or not.  There was lots of debate on that last season.  But I still believe that they will make a trade to help the team, even if it adds salary (as they did with the Porzingis trade).  Fans will never know what deals were on the table with this TPE, that the Celtics passed on.  I hope they do find a good back up PF and bring him in with the TPE or otherwise, but I understand it is not that simple.

[keevsnick]

Thanks for this Roy.  One thing I am not clear on though.  Is there something different about luxury tax requirements if we are over the apron vs. not over the apron?  Does the rate go up or is there a surcharge or something?  All added salary is taxable at this point, whether we are over the second apron or not, right?  But does the second apron trigger additional tax liabilities?  We are a tax payer now, that is why we can only use the tax payer MLE.  I am wondering if there is some aspect of the second apron related to tax charges that I don't understand.

Under the prior CBA, the tax rate increased every $5 million.  That doesn't align neatly with the second apron, so if the same system stays in place, teams would pay the same tax rate if they were below the apron by $1 million as they would if they were $1 million above the apron.

However, I think that part of the new CBA is adjusting the tax brackets, and I haven't had the time or desire to do a deep dive yet.

I guess I still don't get the "staying under the second apron for the sole reason of saving luxury tax this season" statement. The taxes paid have nothing to do with the second apron.  They may choose to avoid the second apron because of the draft pick and trade restrictions, but they are going to be paying tax no matter what.  In fact, they have already added to their tax bill with the trade for Porzingis.  Then they declined to overpay Grant, that decision could have been affected by tax implications, could have been the second apron, could have been both.  But unless I am missing something, I don't see how being under or over the second apron has anything to do with tax.

To me, ownership/management is paying attention to spending and tax bills, they are spending, but not spending recklessly (I feel signing Grant at $53M would have been reckless spending).  Tax is no doubt part of the equation when they consider adding any new player/spending.  I am fine with that.  It is still not clear how much the second apron is going to play into decisions moving forward, at least for this season.  I don't think they sign Grant to that contract, second apron or not.  Maybe they will use the second apron as an "excuse", but that is still just speculation at this point.

As to the TPE, the track record is pretty clear that they are not going to use the TPE just to use it, just to have a useless contract for some other future trade.  You can debate whether that is the right thing for ownership to do or not.  There was lots of debate on that last season.  But I still believe that they will make a trade to help the team, even if it adds salary (as they did with the Porzingis trade).  Fans will never know what deals were on the table with this TPE, that the Celtics passed on.  I hope they do find a good back up PF and bring him in with the TPE or otherwise, but I understand it is not that simple.

Ya to back this up: there's no financial reason to stay under the 2nd apron at least not in the sense that the 2nd apron line itself is important.

The new CBA essentially sets up a new series of tax brackets. For this year each bracket is 5 million in size, so being 0-5 million above is one bracket, 5-10 is the second bracket, 10-15 for the third, ect. There is an established tax for each bracket. 1.5 per dollar, 1.75 per dollar, 2.5 per dollar, 3.25 per dollar for the first four brackets. In the future those bracket will grow with the cap (ie will expand from 5 million up). Also in the year 25-26 the tax rates change to 1.00/1.25/3.5/4.75 for the first four brackets, so lower end gets less expensive but higher end more expensive.

All of this is just to say the 2nd apron is just sort of in the middle of a bracket, for this year in the middle of the 4th bracket. There's no extra penalty for being above it. And there's no extra penalty team building wise for it this year either. All you lose is the tax MLE. Other penalties like draft pick freezing don't kick in until 24-25.

So why so much talk about the second apron for the Celtics? The first answer is they might be worried about taking on long term salary that would put them over in 24-25, because that year the team building penalties kick in. And if they are way over this year it could get hard to get under next year. The second option is that the second apron might just be, coincidentally, the limit of their budget. The second apron is set at about 182.7 million. Having a team salary of 182 million would lead to a total tax bill of about 35 million, plus the extra salary cost of 17 million over the tax is about 52 million in total money out the door for being over the tax. that might just be their spending limit.

[Celtics2021]

Thanks for this Roy.  One thing I am not clear on though.  Is there something different about luxury tax requirements if we are over the apron vs. not over the apron?  Does the rate go up or is there a surcharge or something?  All added salary is taxable at this point, whether we are over the second apron or not, right?  But does the second apron trigger additional tax liabilities?  We are a tax payer now, that is why we can only use the tax payer MLE.  I am wondering if there is some aspect of the second apron related to tax charges that I don't understand.

Under the prior CBA, the tax rate increased every $5 million.  That doesn't align neatly with the second apron, so if the same system stays in place, teams would pay the same tax rate if they were below the apron by $1 million as they would if they were $1 million above the apron.

However, I think that part of the new CBA is adjusting the tax brackets, and I haven't had the time or desire to do a deep dive yet.

I guess I still don't get the "staying under the second apron for the sole reason of saving luxury tax this season" statement. The taxes paid have nothing to do with the second apron.  They may choose to avoid the second apron because of the draft pick and trade restrictions, but they are going to be paying tax no matter what.  In fact, they have already added to their tax bill with the trade for Porzingis.  Then they declined to overpay Grant, that decision could have been affected by tax implications, could have been the second apron, could have been both.  But unless I am missing something, I don't see how being under or over the second apron has anything to do with tax.

To me, ownership/management is paying attention to spending and tax bills, they are spending, but not spending recklessly (I feel signing Grant at $53M would have been reckless spending).  Tax is no doubt part of the equation when they consider adding any new player/spending.  I am fine with that.  It is still not clear how much the second apron is going to play into decisions moving forward, at least for this season.  I don't think they sign Grant to that contract, second apron or not.  Maybe they will use the second apron as an "excuse", but that is still just speculation at this point.

As to the TPE, the track record is pretty clear that they are not going to use the TPE just to use it, just to have a useless contract for some other future trade.  You can debate whether that is the right thing for ownership to do or not.  There was lots of debate on that last season.  But I still believe that they will make a trade to help the team, even if it adds salary (as they did with the Porzingis trade).  Fans will never know what deals were on the table with this TPE, that the Celtics passed on.  I hope they do find a good back up PF and bring him in with the TPE or otherwise, but I understand it is not that simple.

Ya to back this up: there's no financial reason to stay under the 2nd apron at least not in the sense that the 2nd apron line itself is important.

The new CBA essentially sets up a new series of tax brackets. For this year each bracket is 5 million in size, so being 0-5 million above is one bracket, 5-10 is the second bracket, 10-15 for the third, ect. There is an established tax for each bracket. 1.5 per dollar, 1.75 per dollar, 2.5 per dollar, 3.25 per dollar for the first four brackets. In the future those bracket will grow with the cap (ie will expand from 5 million up). Also in the year 25-26 the tax rates change to 1.00/1.25/3.5/4.75 for the first four brackets, so lower end gets less expensive but higher end more expensive.

All of this is just to say the 2nd apron is just sort of in the middle of a bracket, for this year in the middle of the 4th bracket. There's no extra penalty for being above it. And there's no extra penalty team building wise for it this year either. All you lose is the tax MLE. Other penalties like draft pick freezing don't kick in until 24-25.

So why so much talk about the second apron for the Celtics? The first answer is they might be worried about taking on long term salary that would put them over in 24-25, because that year the team building penalties kick in. And if they are way over this year it could get hard to get under next year. The second option is that the second apron might just be, coincidentally, the limit of their budget. The second apron is set at about 182.7 million. Having a team salary of 182 million would lead to a total tax bill of about 35 million, plus the extra salary cost of 17 million over the tax is about 52 million in total money out the door for being over the tax. that might just be their spending limit.

I agree with most everything you’ve said, except that I don’t think it’s a coincidence that the second apron is the limit of their budget.  I think management of the Celtics and several other teams are using the second apron as a reason to set the budget limit there, as opposed to it just happening to fall there.

[Roy H.]

The second option is that the second apron might just be, coincidentally, the limit of their budget. The second apron is set at about 182.7 million. Having a team salary of 182 million would lead to a total tax bill of about 35 million, plus the extra salary cost of 17 million over the tax is about 52 million in total money out the door for being over the tax. that might just be their spending limit.

I think this is probably right.  I think the Celtics, and most teams, will treat the second apron as a sort of cap on spending.  As I mentioned elsewhere, it's again to how the Red Sox cry poverty when they're up against the competitive balance tax.  Next thing you know, Brad will be trading Tatum for the equivalent of a mediocre outfielder and a backup catcher.

[otherdave]

I agree there are no financial reasons for staying below the 2nd apron this season.

I believe there are more harsh penalties if a club gets into a repeater 2nd apron offender status (over 2nd apron 3 out of 5 yrs).

Maybe Wyc just doesn't want to start the repeater clock.