Why Dwight Howard will sign in Houston if traded here.

Not when we have a Yao or Lin on the team.

 

The only reason why Dwight will re-sign if traded to Houston...

Spoiler

Show me the MONEY!!!

 

question for Bima

continually see comments on this board stating why would Howard leave 25-30 million on the table by not resigning with Houston if he was indeed traded here and the Rockets having his Bird rights?

My question is, what would keep an owner like Cuban or Prokhorov (or any other owner who wanted Howard), who have billions, and have shown they're willing to spend it, from offering Howard a personal services contract to him when he retires? He could pay him the 25-30 million for the first yr of this personal services contract, which would make up for what he'd be losing out.

Is this legal and how could the NBA enforce what they pay an employee (not a player on the team)? If Alexander wanted to pay Morey 25 mil a yr that's HIS business, and the NBA would have NO say so. So why couldn't Cuban or Prokhorov just tell Howard, "sign with us for 4 yrs and the 25 or 30 million that you'd be losing by doing so I'll make it up to you on the back end?

 

You may be making a good point there.

+ Most players set up a 501c3 tax free foundation so they can pay their family members not to work and write off all the tax free donations they give to it.

"Hey mom.. all those years you cooked and cleaned"!! "You are now heading my new foundation and you get a new car.. paid cash money to shop and eat lunch at the best places... and I get to right it all off my taxes". " This is funner than fun right mom"??

And guess what mom.. all we have to do is hand out $500 in turkeys each year and get the picture in the paper and I can still pay you $80K plus and write it all off.

zzpot

 

fixed

opps

 

It's where the money is earned. I have some income from Indiana & I have to pay Indiana state income tax. If you live in Houston, but play for the Knicks; the money the Knicks pay you will subject to NY(I assume the Knicks are incorporated in NY) state income tax. You will pay federal income tax in Texas on the Knick money.

 

Wouldn't be surprised if stuff like that does happen...You have to be careful with Howard though. He has made habit of having things come out to the media unexpectedly lol.

 

That's possible, but you still have to pay the state income tax on whats left over. If nothing's left over, what's the use of playing there?

 

It matters a lot. Our players pay income tax to NY when they play in NY, even if they live in Texas. If a player comes here, and lives here, he will not pay state income tax in 41 home games, 2 road games in Dallas, 2 road games in San Antonio, 2 games in Memphis, and 1 game each for Miami and Orlando (49 games).

Now, if you live in a state with income tax, your home state will tax you on that income earned outside of your home state.

Most players don't seem to take it into consideration, but it will cost a max player a few million dollars.

 

So you are saying that most players create illegal charities?

 

yes.. your right...

Live in texas and do a job in another state with income tax and you have to file for state income taxes in that state. To reduce the taxes you pay for out of state to that state you file all kinds of write offs. ROS IRA's.. foundations.. out of state living costs.. and you don't have to show most of the time if you get a 'per diem' for those costs in the first place.. like food and hotel or housing costs. Not real sure of those rules today..but you get it.

Any and all tricks to show a reduction of wage will reduce the states claim to taxing you. If you don't live in the state claim 15 kids on your W4 form right away when you are filing your I-9's and stuff. You can always fix it as a typo latter... The state does not get to see your IRS return just the papers you file in the state and a w2... then you pay the gov for your extra write offs for the year.. you don't have 15 kids so you write a check to the gov for 1,000. to clear that up and you only paid $15 bucks in out of state taxes and your paper work is as clean as... well... states and the IRS don't talk a lot.

zzpot

Ps... please do not do this.. I am not a tax man... I pay my taxes... I am only saying that this has been done before and people have been caught, but every rarely... Ex-wife's and girlfriends snitching!!..LOL

 

This statement is in itself a misconception. Bird rights allow the team holding them to add an additional year and higher annual raises, that is correct. But the idea that he is leaving that last year on the table is a bit incorrect.

For sure, the contract he signs with a new team is one year shorter. But one may presume that there is a fair chance that at the end of the shorter contract, he will still be able to sign a new one, and the first year of that contract will in part defray what he loses by taking the shorter deal up front.

So really, it is about GUARANTEED money, because what they earn in a follow up contract depends on their health, production during the preceding years, etc., all of which could mean that they don't sign a follow up max deal. (e.g., Gilbert Arenas, who signed a near max like 112M deal with Washington, and then had all sorts of problems which would have prevented him from being offered max money in a follow up contract had he taken a shorter deal).

 

NO the 501c3 charities are legal... just the BS about them is suspect... Players handing out Turkeys in the hood at Thanksgiving,, Mike Tyson hands out Turkeys... P-Diddly... on and on and on... you see it every year.. why not hand out 50 turkeys a day all year long.. They make millions.

The foundations..AKA... charities are ruse and a tax code write off.


zzpot has spoken

 

Not necessarily true. I think these guys get taxed based on where they play, so for Texas team players, half their salary would not get state tax due to the home games they play.

 

I'm not 100% sure of this, but I think if he signs with a team that doesn't own his bird rights his max number resets. Right now he is making like 19 million a year. If he signs outright with Dallas I believe that number drops.

 

You can ask Kevin McHale why a team might not want to do this.

He got real cute with the wink-wink nudge-nudge "sign now and we'll take care of you financially later" with Joe Smith.

The Wolves ended up losing five first-round picks and have been a toilet franchise for over a decade.

Stern didn't think it was very cute.

 

So you're saying its okay to give up potentially good players so that we may do a SnT with a good team trying to be better? Meaning future first rounders of high 20's? Woot!

 

Only if you play for the Cowboys.

 

Its about the final guaranteed year of his contract.

As of now, yeah... he's young and he might not think he's going to have injury issues going into his final year and will command another max contract after this contract is up, but the advice coming from his agent and management will always be to force a trade beforehand to a team that can sign you and keep your bird rights to remove the risk.

If the Rockets refuse to trade him it will put him in a situation that no other superstar max free agent-to-be has ever been in. Making the decision to actually take less guaranteed money on a max contract.

The ONLY team that Dwight could walk to at this poing in free agency would be Dallas or a bottom feeder team that we have yet to mention like Sacramento that will have the capspace in free agency to sign a max contract.

Can Cuban legally throw money under the table to Dwight???? absolutely not. The NBA has strict legal rammifications for this type of action that Cuban would not be dumb enough to try.

Can he hire him as a coach or scout after he retires and pay him whatever he wants???.... Sure, but is Dwight going to take that risk based on a word of mouth hand shake deal 7 to 8 years in advance?

If I was his agent I would personally tell him to not engage in that discussion if brought up at any point in negotiations(when he is a free agent. Remember team officials are forbid to speaking with players when they are under contract) to eliminate any risk of breaking legal rules in negotiations in any way. Its not worth the risk of even discussing IMO.

Im not a lawyer, but I am a rep for a company that negotiates complicated contracts with the companies I represent so I do have some exposure to the legal side of these types of contracts in a corporate setting. Im sure Bima can break it down much more than this later on though, but IMO Dwight's lawyer/agent/manager would be giving him terrible advice to even bring something like this up when negotiating a new contract as a free agent.

 

What you are describing is illegal.