Q. How much room do the Nets have before they hit the luxury tax?
A. Enough to make a significant deal without having to pay the tax.
The luxury tax threshold for the coming season is $71.15 million. The Nets, according to our best estimates, currently have salary commitments of $62 million (including a buyout for Keith Van Horn), giving the Nets about $9.15 million in wiggle room. That's also about $7 million less than last year's payroll and puts the Nets in the middle of the pack among NBA teams, roughly 17 out of 30. Last year, the Nets' payroll was seventh.
What does that mean in terms of flexibility on trades...if indeed the Nets are willing to spend?
Here are two examples of how the flexibility could be helpful:
--If the Nets wanted to trade Stromile Swift's expiring contract, a draft pick or two and some cash in a straight-up trade or a sign-and-trade, he could bring back contract(s) worth $7.85 million. Additional cost to the Nets' salary cap: $1.65 million, leaving them more than $7.5 million under the threshold.
--If the Nets wanted to trade Swift, Keith Van Horn's contract, a draft pick and enough cash to buy out KVH, they could bring back as much as $12.6 million in contract(s). The additional cost would amount to a little less than $6 million, which would put the Nets $3.15 million short of the threshold.
One player who would fit into the first example is Andres Nocioni in a straight trade. So would J.R. Smith in a sign-and-trade. One who would fit under the second in a sign-and-trade scenario is Josh Smith. The Nets have expressed an interest in all three. All would put a crimp in the Nets plans to get way under the cap by the 2010 free agent season, however.
Our numbers are admittedly imprecise. The NBA doesn't release official salary figures, so we're basing our numbers on those provided by Hoopshype and DraftExpress. Neither site has complete or precise numbers...and there are a couple of significant conflicts.
Hoopshype's breakdown includes two of the Nets' rookies--Brook Lopez and Ryan Anderson--but not Chris Douglas-Roberts, who will earn $442,000 this season. DraftExpress doesn't include Keyon Dooling or any of the rookies and their numbers for Devin Harris and Vince Carter are considerably lower than those reported by Hoopshype. Harris will earn $7.8 million according to Hoopshype, $7.0 million according to Draft Express. Carter will earn $15.2 million according to Hoopshype, $14.72 million according to DraftExpress, a $475,000 difference. In calculating the numbers for this exercise we decided to go with DraftExpress on Harris, Hoopshype on Carter--based primarily on what other media reported at the time the two players signed their most recent contracts.
We're also adding a $500,000 for Van Horn's buyout, doing a little bit of guesswork on KVH's contract. Van Horn had to be signed to a three year deal under league rules, with only the first year guaranteed. According to reports, the second year would pay him anywhere from $3.75 million to $4.2 million but no one expects that to happen. The contract permits the Nets to keep his contract on the books for trade purposes until October. At that point, he would receive a "small" buyout when he is waived. The buyout could be more, could be less, than $500,000.
Why the change from the earlier item? Two respected capologists pointed out that while Nenad Krstic's $2.76 million qualifying offer counts against the salary cap, it doesn't count against the luxury tax threshold, since no money is actually expended with the QO.