About a month ago, Max Weisberg looked at the Brooklyn Nets projected spending, in salary and the luxury tax, here at The Brooklyn Game. We projected that Brooklyn Nets owner Mikhail Prokhorov would spend a wild $47 million in the luxury tax alone.
Since then, a lot has changed. Duh. On July 12th, the Nets will finalize a trade that reportedly sends Kris Humphries, Gerald Wallace, Kris Joseph, MarShon Brooks, and three first-round draft picks to the Boston Celtics to acquire future Hall of Famers Kevin Garnett and Paul Pierce, along with guard Jason Terry.
The Nets are picking up a fair amount of salary in the short-term, and it’s going to cost Prokhorov — a lot.
Once this trade goes through, the Nets will have 11 players under contract for the 2013-14 season: Deron Williams, Joe Johnson, Paul Pierce, Kevin Garnett, Brook Lopez, Mirza Teletovic, Reggie Evans, Tyshawn Taylor, Tornike Shengelia, and Mason Plumlee. Those 11 players (assuming the Nets give Plumlee 120% of the rookie scale, which is customary) will make a combined $94,910,500 in 2013-14 alone.
If we make two reasonable assumptions:
- 1) The Nets sign someone — Kyle Korver, Bojan Bogdanovic, or someone else — to the mini mid-level exception (worth $3.183 million);
- 2) The Nets fill out their bench with three minimum-level contracts (which will count as $884,293 each against the cap)
The Nets total salary would be bumped to $100,746,379.
What does that mean for the luxury tax? Max explained the math for paying the luxury tax last month:
The math: 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.
If you use the NBA’s projection of $71.6 million for the luxury tax level (which won’t be guaranteed until the league audit), that puts the Nets almost $30 million into luxury tax territory, meaning they’ll pay into the luxury tax a grand total of…
That’s right. With their current salary situation, the Nets will spend over $81 million on the luxury tax alone. To compare, the Miami Heat paid $80,736,455 in salaries for their championship team this past season, and they had the third-largest salary figure in the league.
If you add up the projected salary for a 15-man roster, the tax level, the amount the Nets still pay Travis Outlaw ($4 million), Prokhorov will end up shelling out a grand total of $186,118,490 on the Brooklyn Nets roster in 2013-14.
The luxury tax is so punitive that the Nets might keep open a roster spot just to save money:
- Because they’re so deep in the tax, one minimum-salary player will actually cost the Nets $4.64 million.
- Signing a player to the taxpayer mid-level exception worth $3.183 million actually costs the Nets $16.7 million just this season alone.
- Signing a minimum-level player instead of the taxpayer midlevel exception saves the Nets a little over $12 million.
Is it worth it to Mikhail Prokhorov? Probably. Championship aspirations aside, Prokhorov bought his majority stake in the Nets for $225 million. The team’s worth is now estimated somewhere between $750 million and $1 billion.
Still: an enormous price to pay for the billionaire owner. Let’s hope it leads somewhere worthwhile.