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Heavy luxury tax bill looms for Brooklyn Nets

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Debby Wong-US PRESSWIRE

We've done the math about how much the Nets committed to their Brooklyn rebuild last summer. With new contracts, acquired contracts, purchased draft picks, a buyout, and other miscellaneous costs, the total worked out, by our calculations, to $345.5 million.

Now, Max Weisberg of The Brooklyn Game looks at the first year's luxury tax bill, based on all that spending. By his calculations, the bill will come to $47.1 million, or as he puts it, "a whopping $47,129,228" to be precise. That's because of the new way the tax bills are put together. As he notes:

For every dollar up to $5 million above the luxury tax, teams pay $1.50. For every dollar from $5 million up to $10 million, teams pay $1.75. From $10 million up to $15 million, $2.50. From $15 million up to $20 million, $3.25. For every $5 million above the tax level after $20 million, you add another 50 cents per dollar.

The numbers will go higher as the years pass, with a repeater tax kicking in once the team goes over the tax threshhold three times in four years. For the Nets that would be 2015-16, when they will still be paying Deron Williams, Joe Johnson, Brook Lopez and Gerald Wallace. Yikes! Sure hope everyone knew the consequences going in!

Of course, Mikhail Prokhorov will have to spend a lot of money to make his original investment look bad. He paid $220 million for 80 percent of the team, 45 percent of the arena operating company and a yet unexercised 20 percent option on the rest of Atlantic Yards. With the small market Kings being valued at $535 million, Moscow believes the value of that investment has grown to between $700 to $800 million.