Mikhail Prokhorov will pay more than $82 million in luxury taxes on top of salaries of $101 million if the Nets roster remains static through June 30, the day salary numbers are actually tallied up and taxes assessed. If the Nets were to complete the two deals reported Monday, those numbers would skyrocket, making the Nets the NBA's first $200 million team.
By one calculation, the acquisition of Jordan Hill alone could cost them $17.5 million. Trading Jason Terry for Jarrett Jack, who has two years and $13.1 million guaranteed left on his deal after this season, could put the Nets into repeater tax territory by 2015-16. It could also make getting under the luxury tax threshold the year before --and have access to the sign-and-trade and MLE-- extremely difficult.
As Woj tweeted Tuesday morning...
As Nets consider Jordan Hill and even larger tax bill, a GM says, "It pushes teams even harder to stay under (tax) as payouts get bigger."— Adrian Wojnarowski (@WojYahooNBA) February 18, 2014
A league source told NetsDaily Monday evening that nothing is "imminent," and that "the cart is before the horse here," indicating the rumors are outpacing reality.
But assuming these deals reach the decision stage, does money matter? Would Prokhorov pay the bill if Billy King presented it to him on Thursday? There are mixed signals.
King said recently that he has some leeway on money. In late December, when he announced Brook Lopez was out for the season, King told reporters, "If there's a deal out there that we feel is going to make us a better team, we'll do it, regardless of tax or the future," King said. "But we're not going to panic and do a move just to make a move because we feel we have to."
On the other hand, the minor deals that brought in Marquis Teague and sent Toko Shengelia to Chicago and Tyshawn Taylor to the Pelicans were aimed at reducing luxury taxes as well as adding roster flexibility. The Nets saved $3.5 million in taxes on those deals.
Ohm Youngmisuk, who covers the Nets and Knicks for ESPN New York, doesn't think money is an issue, telling ESPN, "I don't think the luxury tax is going to stop the Nets from doing anything they think can improve the team."
"I don't think that would really be a deterrent for Nets ownership because Mikhail Prokhorov has shown he's willing to spend no matter what it takes to make improvements to the team," said Youngmisuk, who first reported the Jarrett-for-Terry rumor.
Maybe. It's easy to see the Nets being willing to make the Jarrett-for-Terry deal. It wouldn't cost them much more than what they saved on the two deals last month. And Ken Berger reports the Nets are pushing to get back a draft choice from the pick-rich Cavaliers. The Hill deal would be much more problematic since it would be for a two or three-month rental. And it appears it was the Lakers, trying to get under the tax threshold, who initiated the talks.
How soon will we know about the deals? A second league source says don't expect much before 3 p.m. on Thursday. At that point, Prokhorov and his No. 2, Dmitry Razumov, would have take some time off from the biathlon in Sochi to make the call ... and write the check.
- Sources: Terry For Jack Deal Discussed (Video) - Ohm Youngmisuk - ESPN