Whew! How the Celtic trade helped Nets avoid "repeater tax"

John E. Sokolowski-USA TODAY Sports

Mark Deeks of Sham Sports, writing for SB Nation, looks at how the repeater tax will affect the NBA, noting that if a team is a luxury tax payer for three out of four years, starting next year, it's going to get slammed and hard.

Teams susceptible to the repeater tax get $1 extra added to each dollar of tax that they would otherwise pay. The aforementioned incremental ratios therefore would become $2.50/$1 for teams up to $5 million over and up to $4.75-$1 for teams between $20-$25 million over.

Et cetera.

Deeks then calculates what the nets WOULD pay IF they had to pay the repeater tax this season, based on their current roster.  The number is indeed staggering, hypothetically $117,662,302 on top of the payroll would mean a bill of $219,873,311, or about $3 million less that what Mikhail Prokhorov paid for interests in the team and Barclays Center.

BUT the Nets won't be paying the repeater tax, thanks in large measure to the Celtic trade. One big, underappreciated aspect of the deal is that the Nets dumped Gerald Wallace's contract.  In doing so, the Nets will likely go under the luxury tax in 2015-16.

Losing Wallace's final year has two advantages for the Nets: 1) they avoid the dreaded repeater tax and 2) if they can work with their cap space, they could have the MLE and the BAE, as well as the ability to accept players in sign-and-trades. Could.

Deeks does a less abstract analysis of the Bulls situation.  Chicago, he notes, "cannot keep its current team together without paying the repeater tax."

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