[BimaThug Memorial Thread] The Myth of the Rockets and the McGrady Trade

I'm not thrilled about the possibility of losing the diamond Lori...

 

In the overall scheme of things (summer of 2010 and beyond), McGrady will only bring an incremental upgrade (relatively, speaking) to the roster. Incremental being defined as a step closer to a championship contender. And even that may be optimistic. Depends on what "dominoes" fall as a consequence. If the Rockets lose any significant pieces of the current team (a Brooks, a Budinger or a Lowry), whose to say how the "chemistry" changes?

So far, Morey seems pretty level-headed and somewhat conservative in moves; although the team was willing to take Cook's contract to get Lowry. (In fact, that would imply the value for Lowry was beyond the money paid to him.) I don't see the younger players being sacrificed very easily. Trying to get a roster of role players with the talent level the Rockets currently have is what Morey has painstakingly worked at. I don't see him giving this up easily. I think one could argue that the backcourt of Brooks and Lowry has given opposing teams problems more than a few games this season. Even when the Rockets don't play well they usually don't lose big.

The difficulty in trying to tweak the team with any trade at this point is: How do you not mess up the good you have worked hard to get to make it even better?

 

Agreed.

You don't know what's going to happen until the season pans out.

If we make a McGrady + Cook trade, then you can bet it'll bring us below the tax line for this season.

Save $4million in immediate salary, and also save $3million in tax. That's $7million which could go towards paying tax next season. (not to mention the 'rebate' - somewhere in the order of $4million)

If we made 'the deal' with Philly to bring back Iguodala and Dalembert, then surely that makes Battier somewhat expendable? Trading him to a 'contender' for expirings THIS season saves us almost $7.3 million next season.

One would wonder if Hayes AND Andersen would both be 'required' on a roster that included Ming, Scola, Landry and Dalembert. The most cost effective way of approaching it would be not to take up Hayes' extension.

Those moves reduces salary by 9.5million - or brings it down to $68million (including Iggy and Dalembert).

There's also no guarantee that the luxury tax level will be $66 million next season. But even if it is, the $11million saved this season (not to mention the insurance Les is picking up off the cash cow Ming) would well and truly cover the $2million tax bill. That is, assuming we pay it and don't move someone like Dalembert for $2million less in salary returns.

The trick then becomes the amount you pay Landry, Brooks and Ming in 2011 - $30million would be coming off the books, and I'd like to think all 3 could be resigned under that amount.

 

Maybe trade Anderson to Golden State for expiring contracts, too? Anderson is the perfect C for Nellie. Then, we don't HAVE to pick up Hayes' option (as much as I love Hayes, the offensive machine), if we have Dalembert. That should save some money.

 

I understand every word and appreciate you making this clear to all!

 

I said it before earlier in this thread but didn't Les basically pocket millions over the last few years(certainly more than $20mil) by having insurance pay Yao & Tmac's injury salary?

FWIW, I really don't care for Dalembert as a player but in the bigger picture I think Les should have the extra funds to cover a large tax hit for at least an extra year if the talent we can get is significant.


My question to the group: someone earlier said the Lakers(for instance) spend roughly 90mil on salary. When figuring how much a team spends, does that mean the Lakers spend 90 mil on salary alone, or does that include the luxury tax hit? The numbers seem to balloon quickly after the teams who meet the cap figure so my question is does it really take $70mil+ in salary to put together a consistently contending team or are these teams really only one contract over which puts them over drastically?

...one last question - Bima said if we go over we pay more and don't get the benefits of being under. What does that mean - does that effect the MLE since it's made up of the money from teams who go into the luxury tax?

 

That is just the required policy, they could have additional insurance too.

DD

 

For heaven's sake, who has ever seen 'the insurance policy'? These type policies are not boilerplate. The details are all unique, and they are unknown to us.

 

Great point, forgot that Les pocketed all the insurance money.

 

I have no problem with Les making money. I enjoy my 30 dollar hotdog and soda when I go to the game, but I also expect some of that money being invested back in the team, especially if its only a one year hit.

 

Have you seen their individual policies?

From what I understand McGrady's policy stated that he was covered for games missed - and if that number hit 41 games in a row, then every additional game he missed was covered. Ie, he could play a few, then sit 2 and be covered.

Insurance doesn't necessarily HAVE to kick in at 41 games - it could be much earlier, the 41 games was for additional benefit.

 

Dorsey's contract is so small, it is not significant.
I already mentioned TMac and Cook as two significant dead weights. But they are expiring.
I also mentioned that one could see Yao as a dead weight, depending on how you look at it. Anyhow, he is not going to be traded as a salary dump. That was the point of my post.

So what are you not agreeing? Dorsey's small contract?

 

Just wanted to rate this. (5)

Also say its been one of the best reads on this forums for a long time. :grin:

 

The MLE has nothing to do with the luxury tax. Basically, teams that are over the cap are entitled to use the Mid-Level Exception (or MLE), which allows those teams to sign one or more players to an aggregate amount of the "average player salary". This amount is determined on or about July 8 of each year, the beginning of free agency and is based on some function of Basketball Related Income (or BRI).

BRI is the same basis for computing the salary cap and the luxury tax threshold (hence your confusion, perhaps?).

What I think you're referring to in your question is regarding the shared luxury tax revenues. When the league collects all of the luxury taxes from the tax-paying teams, it then re-distributes them to all of the teams that did not pay the tax. Each of those teams gets 1/30th of the tax money. The leftovers are used to fund "league programs", with the tiny remainder then redistributed to all teams.

THIS is why you see many owners unwilling to pay even $1 of luxury tax. They don't want to lose out on this (typically between $3-4M) in extra revenue.

 

It would be very difficult to say the Rockets made or lost money on the insurance. True the season tickets were sold in lieu of Yao's injury so it would be a net gain from that but I'm sure they are seeing a pretty huge drop in merchandise sales and ad revenue's with a decreased interest from China.

1 million Yao jerseys instead of 5 million would mean could mean something like $40 million dollars.

 

That's a lot of money - but it does highlight how Yao's return next season can provide a 'cushion' of cash to offset luxury tax owed.

If we make a trade that gets us under tax treshold this season, we'll be effectively something like $11 million better off.

Play that money into next season along with a potential windfall on Yao jersey sales (do they sell knock offs in China??) - and it's possible that the team might be something like $20million ahead altogether. That would offset some of the $14-15million in lux tax.

I DO think Les is in a strong position to pay the tax for a year provided it brings the right player to Houston.

Is Iguodala that player? I dunno, but it'd be fun finding out!