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Plan Ahead: The repeater tax looms for Nets

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Geoff Burke-USA TODAY Sports

Let's put aside the Nets chances for a playoff spot and the number of NCAA bracket combinations -aren't they both 1 in 9.2 quintillion? -- and take a look at next year. It's not a pretty picture.

The Nets brass keep referring to next season as the "bridge year" before the 2016 free agent madness, fueled by the influx of national TV money.  They could also refer to it as the "year of fiscal sanity" as the Nets try to get under the luxury tax threshold so they can avoid the (dreaded) repeater tax. Any team that goes over the tax threshold four consecutive years will have to pay the repeater tax, the add-on tax above and beyond the incremental tax load. We could get into the gory details, but just know this: it's bad.  The Nets will have been, at  the end of this season, a taxpayer three straight years, paying more than $115 million over the span.

The front office will have some time to come up with ways to avoid it. Luxury taxes are based on the payroll at the end of the regular season, roughly April 15 every year, just like those of us wrestling with the 1040.  That means they have through the trade deadline next February to get the team's financial house in order.

The two big money issues are: the $20+ million salaries paid Brooklyn's Backcourt (trademarked), Joe Johnson ($24.9 million) and Deron Williams ($21 million) and the two big player options held by Brook Lopez ($16.7 million) and Thaddeus Young ($10.2 million).  That's a big hunk of change

Beyond that, Jarrett Jack is guaranteed $6.3 million and Bojan Bogdanovic $3.4 million next year.  Add those all up and you're already at $82.6 million for six players, assuming Lopez and Young don't opt out. The luxury tax threshold next season is projected at $80.2 million.

If Alan Anderson exercises his $1.3 million player option and you add a new deal for Mirza Teletovic, at around his qualifying offer of $4.25 million, and a good player at the mini-MLE which will be nearly $3.5 million; keep young players like Cory Jefferson and Markel Brown; sign a first round pick at around $1 million and retain Mason Plumlee ($1.4 million) and Sergey Karasev ($1.6 million), you're up to $95 million. That's more than what the Nets payroll was at the beginning of this season but not quite as drastic as it was after the Boston trade.

That plus the repeater tax would put the Nets luxury tax payments high up in the eight figures again. Under the scenario we laid out, around $40 million. Of course, that will NOT happen. The team has been a major disappointment and (current) ownership does not want to pay the repeater tax. Maybe if the Nets go a million dollars over the luxury tax threshold, it wouldn't be a big deal, but the goal is to get under the threshold, and not just to save money. By being over the threshold, the Nets have been unable to sign-and-trade for another team's players, been limited to the taxpayer or mini-MLE, a little more than half the full MLE, and been ineligible for the bi-annual exception which is now closing in on $3 million.

So how do the Nets do this? It won't be easy to dump all that money and still make the playoffs. What about Lopez, you ask? Isn't if possible that he'd opt out and either signs elsewhere -- leaving the Nets with nothing -- or goes for a longer deal with the Nets at less than $16.7 million?  Unlikely.  Agents with players in the last year of multi-year deals or with a player option next year are likely to recommend their clients wait a year, till the huge national TV rights money starts to flood in.  Same goes for Thaddeus Young, who also has a player option.  Both Lopez and Young are still only 26. They're in the prime of their careers. They can wait a year. (And don't think Lopez will necessarily want the security of a longer term deal this summer because of his foot issue. He feels that issue is behind him.)

So, look for modified salary dumps, the kind that the Nets toyed with before this year's deadline...

--Trade Lopez to the Thunder for Reggie Jackson, Kendrick Perkins and either Ish Smith or Perry Jones, dump Perkins on the 76ers for whatever picks they have left, then deal Jack for Martell Webster and a future pick swap. The Nets would have maxed out Jackson in July, according to reports, and had to make decisions on what to do with either Smith or Jones as well as Webster who's on the tab for another year plus a guaranteed $2.5 million in 2016. But if it had happened, the Nets would have gotten under the tax threshold this season. It didn't.

--Trade Johnson to the Hornets for Lance Stephenson, Gerald Henderson and Marvin Williams. The Nets might have had to add a smaller salary to the mix as well. (One problem with dealing big salaries is that you get too many players with smaller salaries back).

--Trade Williams and Plumlee (who was the deal breaker) to the Kings for Darren Collison, Derrick Williams, Jason Thompson and possibly Nik Stauskas.

Certainly, the Nets would like to replenish their draft stock in deals like that or others, but opposing GM's, knowing the Nets fear of the repeater tax and lack of picks, are likely to drive a hard bargain.  Maybe the Nets could add a trade exception or two to the four they already have, but using a TE adds to the payroll.  Do you add money when you’re trying to cut salary?  No, you do not.

Bottom line: there could be a lot of reasons to blow this all up in the off-season and very few to keep it together.  Get ready to buy new Nets gear, with a lot of new names on it.