On Singletary and Ewing in the Artest trade (split from countdown thread)

[1kingzfan]

On Singletary and Ewing in the Houston trade...

The word is that Houston will accept them and then immediately cut both, so it's not that they're interested in them as players. It's for luxury tax purposes, so the only thing that makes sense is the portion of those contracts that are guaranteed are putting us over the limit.

I don't think it has anything to do with the luxury tax. Singletary and Ewing both had typical non-guaranteed contracts for 2nd rounders. As a result, Petrie could cut them both at any time. He did not need this trade to do that.

Look at the trade numbers:

Houston trades:

BoJax $6,987,888
Greene $971,160
Future 1st rounder $ no trade value

Total $7,959,048

Sacramento trades:

Artest $7,400,000

This is close enough under the CBA to do the deal as above.

Instead, Houston adds $1,000,000 cash.
New TOTAL: $8,959,048

And the Kings toss in:

Singeltary $442,114
Ewing $442,114

Extra Total $884,228
New TOTAL: $8,284,228

So, IMHO, when I look at these numbers, it appears that the Kings merely wanted some extra compensation for the Artest deal, and instead of just cutting our 2nd rounders, the Maloofs pocketed $1 million for two players that were going to be cut anyway.

Anybody else buy this or have another thought?

Note: I don't know how much of the non-guaranteed contracts are committed to the players, but I don't think it is very much if they never suit up in an NBA regular season.

 

[NME]

I don't think it has anything to do with the luxury tax. Singletary and Ewing both had typical non-guaranteed contracts for 2nd rounders. As a result, Petrie could cut them both at any time. He did not need this trade to do that.

It was specifically said in one of the early trade articles that it was for luxury tax purposes. It was also said that the Rockets are expected to immediately release them.

Their contracts have been called "partially guaranteed" which means that they are due something, just not the full deal even if they don't make the team. Apparantly, this is enough to make a difference in the tax limit.

 

[NME]

Instead, Houston adds $1,000,000 cash.
New TOTAL: $8,959,048

By the way, cash doesn't factor in for matching purposes, only the contracts.

 

[NoBonus]

I wonder if and by whom Singletary will be scooped up...

 

[1kingzfan]

It was specifically said in one of the early trade articles that it was for luxury tax purposes. It was also said that the Rockets are expected to immediately release them.

Their contracts have been called "partially guaranteed" which means that they are due something, just not the full deal even if they don't make the team. Apparantly, this is enough to make a difference in the tax limit.

Luxury tax limit is $71,150,000 for next season.

Kings current salaries (pre-trade) are at $70,978,510. Post-trade total salary for the Kings, if the 2nd rounders were omitted from the deal, would be $71,537,558, or about $400,000 over the luxury tax limit. So it is indeed very close.

So what if Geoff just cuts both Ewing and Singletary right now, then the team is $400K+ under the cap after the trade. No way that the partial guarantees of 2 contracts totalled at $884K would exceed about half of that amount.

Thoughts?

 

[Bricklayer]

Luxury tax limit is $71,150,000 for next season.

Kings current salaries (pre-trade) are at $70,978,510. Post-trade total salary for the Kings, if the 2nd rounders were omitted from the deal, would be $71,537,558, or about $400,000 over the luxury tax limit. So it is indeed very close.

So what if Geoff just cuts both Ewing and Singletary right now, then the team is $400K+ under the cap after the trade. No way that the partial guarantees of 2 contracts totalled at $884K would exceed about half of that amount.

Thoughts?

Partial guarantees are often about half the contract, so it could literally be that close -- we might be talking being $20,000 over the tax threshhold, no more.

Further evidence about just how close we must be comes from the fact we are releasaing BOTH guys. That tells you for sure that just releasing one would nto get it done, and means that it has to be a matter of less than $200,000, whatever the actual amount.

this is where a comment I made in another thread about this becomes critical -- the luxury tax is not only about paying a $1 for $1 over the tax penalty. If that were true than being $100,000 over would not be that huge a deal -- be a $100,000 penalty.

Problem is the second part of the luxury tax si that every team weho stays bneneath the limit, gets to divy up all the $1 for $1 penalties the teams over the limit have been paying. So if you go over the limit, not do you pay the $1 for $1 penalty, but you also LOSE your share of the peanlties everybody else is paying. And if teams like the Knicks etc. still are pumping in $20+mil over the tax threshhold, then all the team under it are due to be getting $1million+ apiece. In toher words being even $1 over the limit is very very expensive. And not worth a pair of second roudn flyers who could not average double figures in summer league.

 

[1kingzfan]

Partial guarantees are often about half the contract, so it could literally be that close -- we might be talking being $20,000 over the tax threshhold, no more.

Further evidence about just how close we must be comes from the fact we are releasaing BOTH guys. That tells you for sure that just releasing one would nto get it done, and means that it has to be a matter of less than $200,000, whatever the actual amount.

this is where a comment I made in another thread about this becomes critical -- the luxury tax is not only about paying a $1 for $1 over the tax penalty. If that were true than being $100,000 over would not be that huge a deal -- be a $100,000 penalty.

Problem is the second part of the luxury tax si that every team weho stays bneneath the limit, gets to divy up all the $1 for $1 penalties the teams over the limit have been paying. So if you go over the limit, not do you pay the $1 for $1 penalty, but you also LOSE your share of the peanlties everybody else is paying. And if teams like the Knicks etc. still are pumping in $20+mil over the tax threshhold, then all the team under it are due to be getting $1million+ apiece. In toher words being even $1 over the limit is very very expensive. And not worth a pair of second roudn flyers who could not average double figures in summer league.

Good points.

We also do not know for sure if the advertised team salary levels are exactly right, except for league minimum salaries, so the Kings could be even closer to the limit than we know.

I still wonder why the Rockets kicked in $1 million cash to do the deal.

 

[Anthonysam]

Good points.

We also do not know for sure if the advertised team salary levels are exactly right, except for league minimum salaries, so the Kings could be even closer to the limit than we know.

I still wonder why the Rockets kicked in $1 million cash to do the deal.

Birthday present..thought it would be sweet!!

 

[VF21]

Good points.

We also do not know for sure if the advertised team salary levels are exactly right, except for league minimum salaries, so the Kings could be even closer to the limit than we know.

I still wonder why the Rockets kicked in $1 million cash to do the deal.

Do we actually KNOW they kicked in the $$$?

 

[Bricklayer]

Do we actually KNOW they kicked in the $$$?

Well it was reported as part of the original deal. Suppose we may never truly know, but it was just what was reported.


thgouht that was interesting myself, just in that direct financial incentives like that are typically what you pay to smaller, poorer struggling owners to convince them to do a deal. For our owners to be taking that sort of cash isn't really a great sign for team finances.

 

[NME]

Well it was reported as part of the original deal. Suppose we may never truly know, but it was just what was reported.


thgouht that was interesting myself, just in that direct financial incentives like that are typically what you pay to smaller, poorer struggling owners to convince them to do a deal. For our owners to be taking that sort of cash isn't really a great sign for team finances.

We did take back a bit more in future guaranteed money with Greene's deal, and we are bumped right up to the luxury line. We got back good value for our needs in the trade regardless of the cash, so I don't think it's any more significant than a minor concession we were able to get thrown in. It's not like we're selling off 1st round picks to Portland.

 

[FakeInjury]

Thier owner is like 50 times richer than malloofs. I wonder what Petrie could do with a blank check and complete disregard for the luxury tax.

 

[Bricklayer]

Thier owner is like 50 times richer than malloofs. I wonder what Petrie could do with a blank check and complete disregard for the luxury tax.

We already know -- that advantage may have been a significant part of why he was able to succeed back in '98-'02.

But in any case I think you may be confusing Dallas (Mark Cuban) and Houston. The Rockets play by the financial rules so far as I know.

 

[FakeInjury]

My mistake, for some reason i was thinking portland....im nearing stupid recently.