Was the Tax ever an issue??? Larry Coon had the number estimated back in July (salaries/benefits where pretty well locked in by then), and this is what Cuban said in the ESPN article. "All you had to do was the math from Day One," said Dallas Mavericks owner Mark Cuban. "It was not hard to determine in advance. Attendance had to fall off a cliff and teams had to spend more than they had in order for the tax to take hold for this just completed season." I do see how Salaries might go up next yr from long-term contracts and use of Middle Class Exceptions, despite big money contracts expiring. So I can buy ESPN saying that next yr might have a Tax. But, I don't see how they are calling revenues static for next year, considering Stern can deliver a significant amount of new revenue from China TV deals and merchandising. There might be a tax next yr, but I just don't see it after that, since China deals should really deliver well. The huge contracts like Hakeem's and Malone's are expiring every year, and max salaries levels are directly tied to growth. I've always thought the Tax was being used as an excuse by the owners to negotiate. Besides the Player have 10% of their salary at stake if a Tax kicks in. <b>The Tax Robs Players First</b> In the opinion of Larry Coon, the Luxury Tax is another means the owners screw the players. The Tax doesn't kick in UNLESS the Players escrow of 10% their salary is exhausted. Every player get 10% of their salary taken out of their pay as a tax, and placed in an escrow account. That money is divided amount the owners before the Luxury Tax kicks in. Can you believe that?? Basically, the owners rob the players of 10% of their pay, before they rob themselves with a Luxury Tax.
Actually the players will be getting some of that money back according to ESPN. I also do not feel bad for the players. they will make more money in a year than i will in a lifetime.
but MR, the players wouldn't get <i>any</i> money back in a Luxury Tax year. This year, they lost 5% of their pay to an NBA tax, to prevent the owners from getting taxed. Point is, the argument about players making a lot of money applies to owners as well. The fair way to keep greed in check is to have the Player Escrow Tax on the players kick in side-by-side with a Owner Luxury Tax. One shouldn't be charged before the other.
I think that the players will be just fine considerering their average salary is like ~$2 million. In comparison, the average salary for a UT Electrical Engineering grad is a mer $55K.
Baqui99 I can't believe it when people justify robbing the players to pay the owners?? Are you saying the owners deserve it more than the players? Or should Electrical Engineers from UT get it? Your salary comparison just makes no sense to me. The owners (who many of them are trust fund babies on a joy ride) redistribute 10% of player's money to all owners before they redistribute a penny of Luxury Tax amongst themselves. These owners make a killing, and the fact the Luxury Tax didn't hit this year, proves their margins are high!! Look at the bottom paragraph. The owners each got $3m from the Player Tax. And that was only half of what they'd get in a Luxury Tax year. Had this been a Tax year, <b>each owner would have gotten $6m.</b> You know what that means, right? That means the Luxury Tax threshold is not really $50m; it is $56m. The owners who go over the threshhold merely exhaust the money they got from the players <b>before they pay a penny of tax.</b>
But they have to make alot of money to cause going over the cap to get taxed. Its kinda like complaining that I pay too much taxes when I alot of money. I would rather make the money and pay alot of taxes then make no money at all and pay no taxes.
I'm not going to lose too much sleep over basketball players getting screwed out of some money. They make more money than most of us ever will so why should I care. All I care about is that the owners keep the league competitive and do not bend over and take it like baseball owners do. Look how that is working out.
The Real Shady, That's fine, but don't let me see you complaining about the effects of the Luxury Tax, then. I'm not going to lose too much sleep over basketball owners (many of whom are trust fund babies handed fortunes) overspending and taxing themselves. The point is, a salary cap should suffice to keep player's in line. A Player Escrow Tax on every player is merely a means for the Owners to delay their own checks and balances, which is the Luxury Tax. The fact that baseball owners line up to "take it up the ass" is even further proof that basketball is far and away the most lucrative sport to own. If baseball survives with outrageous salaries, basketball must be making a huge fortune. The Luxury Tax didn't hit, and that guarantees a huge gross margin. Yet, basketball tickets (as a season ticket total) is far and away the most expensive ticket. So, these owners are lining their pockets left and right. The Luxury Tax is lip service. Read Cuban's remarks. He knows the league is making a fortune. but they don't miss a chance to tax the players or raise ticket prices, do they.
Look at it this way. If you have no owners you have no jobs. The people that put up the money and make the system work do deserve more of the money. Look at baseball the players keep getting greedier and greedier and soon the number of teams will drop and then there will be fewer players. So who gets it in the end may not matter if there is nothing to get.
MysticRyder, You are missing my point. My main point was the Luxury Tax is used as a bargaining chip, and is a lie, because it won't ever happen. All year long the media and the owners said it would happen. It didn't. Larry Coon and Cuban said they knew LAST SUMMER it wouldn't, and it wasn't really even a guess, according to both. Now we are supposed to believe the media and the owners all over again that the Luxury Tax will happen this time, with China TV deals coming online. Yeah right. Why do players need a salary cap and a tax, yet the owner's tax never will hit. The artificial salary cap is perfect, but that should be enough, and it works just fine. Mathematically, with big salaries from the no cap days like (Hakeem's, Malone, Robinson, Big Country, Juwan Howard, Jayson Williams, Mutombo, Larry Johnson, Ilgauskas, Pippen, Mourning, etc) expiring or reducing greatly every year, the NBA has the most fiscal control of any sport or entertainment industry around. The Players Tax is not only the owners putting Player's profits at risk to cover their's, but it is a lie when used by owners who say they are worried about going over it. If they really believe that, then the owner and player taxes should go into effect together. Everytime you read the media, fans or owners say that player X can't be paid that much because of the Luxury Tax, remember that the Luxury Tax will never hit until ALL PLAYERS salaries are reduced by 10%, and given to the owners...they take back that piece of the pie for themselves. <b>As for who makes the system work:</b> You really think the owners of NBA franchise licenses do? That is like saying the owner of a Burger King franchise makes it work. No s/he doesn't. The Product does. The Franchise owners of Burger Kings simply cash in on it and put their investment at risk. And let me tell you, an NBA franchise license carries about as little risk of going down in value as anything. Forget ticket sales and all that: Their licenses to own a team routinely go for 2x or 3x what they bought them for. The license itself rises in value, independent of the sales. Who makes the system of Basketball Entertainment work??? The entertainers do. Why do we never hear much about music and hollywood performers making too much and the owners of labels and studios "taking it up the ass" like (ironically) The Real Shady said in this thread? Because they all make money together. The players deliver the goods, and the rest are cashing in on it or paying to see it. The product is the entertainers. And in the NBA, there salaries are *directly* tied to the profitability of the league. The NBA is fine with the cap. The owners applying a Player Escrow Tax of 10% is unnecessary and just flat out grabbing more share of the pie for themselves.
This has been predicted for several weeks now, well before Troy made his "revelation". Trust me, he didn't exactly scoop this one either.
