(For what's it's worth, I believe the owners are gonna pay whatever it takes as long as we have a legit shot to win the title.)
Don't count on it. The tax becomes too severe too quickly.
Say the total salary is $150m with a cap of $100m. That puts the tax starting at $120. You're only $30m over, right? How bad can it be?
The answer is BAD. Really bad. For a non-repeater, it breaks down like this:
$7.5m for the first $5m over.
$8.75m for the next $5m.
$12.5m for the next $5m.
$16.25m for the next $5m.
$18.75m for the next $5m.
$21.25m for the next $5m.
That's a massive $85m tax bill. Forbes estimates Celtic revenue at $200m but that may be a bit low after the last TV deal. Call it $225m and you realize how large that $85m penalty is. Add in the salary of $150m plus the tax and you're $10m over the total team revenue! That's about -$70m in operating income. While the franchise value would undoubtedly go up some, they're already #4 or #5 in the league estimated at $2.2b. Given the market size there's not a lot of room for growth.
Then there's the repeater penalty - a taxpayer in 3 of the previous 4 years. In the above scenario, $30m equates to a incredible $115m penalty. At that rate the team - before anything else is paid - is in the hole $40m to start and you're looking at -$100m in operating income.
Ownership might not care about making much money year-to-year given that the franchise was purchased for $360m back in 2002 and is now worth 7 times that number. But losing $100m a year is something they're not going to do.
Well, it may be even worse than that.
Assuming we trade for PG, our payroll in 2019-20 will look like this :
1. George $32,724,000
2. Hayward $32,700,690
3. Kyrie $32,400,000
4. Horford $30,123,015
5. Tatum $7,830,000
6. Brown $6,534,829
7. Ojeleye $1,618,520
8. Celtics 2018 pick : let's assume we keep the pick and we end up with #29 --> $1,895,400
9. Lakers/Kings pick : since we got both Brown and Tatum at #3, let's assume we keep the pick and we end up with #3 once again
(in the 2019 draft) --> $7,758,000
Demetrius Jackson $92,857
(I got the rookie scale numbers from here)
https://basketball.realgm.com/nba/info/rookie_scale/2020SUM : $153,677,311
I'm not including Yabu and Nader cause based on this scenario they are part of the package for PG. Not including other future picks either (Clips, Grizzlies, our own pick in 2019). Let's just assume we fill out the rest of the roster with vet minimum guys and a couple of MLE guys as well.
10. $8,568,000 (Non-Taxpayer MLE in 2018-19) Even if we trade for PG, most likely we are gonna finish the season under the apron.
11. $5,659,000 (Taxpayer MLE in 2019-20)
12. $2,537,964 (10-year vet)
13. $2,537,964
14. $2,537,964
15. $2,537,964
(I got the MLE numbers from here)
https://basketball.realgm.com/nba/info/salary_capSUM : $178,056,167 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
If projections hold, the luxury tax threshold in 2019-20 will fall at approximately $129.2 million.
https://www.blazersedge.com/2017/9/28/16382498/nba-salary-cap-projections-2018-2019$178,056,167 - $129,200,000 = $48,856,167
$7.5m for the first $5m over.
$8.75m for the next $5m.
$12.5m for the next $5m.
$16.25m for the next $5m.
$18.75m for the next $5m.
$21.25m for the next $5m.
$23.75m for the next $5m.
$26.25m for the next $5m.
$28.75m for the next $5m.
$31.25m for the next $5m.
7.5 + 8.75 + 12.5 + 16.25 + 18.75 + 21.25 + 23.75 + 26.25 + 28.75 + ~24.1 = 187.85
We are talking about $187,851,043.75 in luxury tax!!!!!!!!!!!!!!!!!!!!!!!!!
So yeah, I guess we won't trade for PG after all.