As teams wait to see the details of the new CBA, there are two provisions in particular that figure to have a lot of influence on whether the Hawks pay the luxury tax.
The most important consideration for the Hawks is the amount of the cash distribution non-taxpaying teams can expect to receive under the new CBA. Under the previous CBA, non-tax teams shared in 1/30th of the total tax pool. Last season the share came out to $2.4 million per team, meaning non-tax teams made out by not paying the tax and also getting that distribution.
The distribution is not expected to be as generous under the new CBA, according to cap expert Larry Coon:
2011 CBA: No more than 50 percent of the tax funds can go exclusively to teams that did not pay tax. . . .
However, while the new agreement stipulates that no more than 50 percent of the tax funds can go exclusively to teams that did not pay tax, it doesn’t specify what happens to the other 50 percent. It is possible the remaining tax money will be distributed to all teams in equal shares, but it’s also possible the NBA will reserve this money for “league purposes.”
My educated guess: If it isn’t as lucrative for the Hawks to be a non-taxpaying team anymore, that might be the thing that prods them to spend into the tax. And outside of using the amnesty now, which I’m still hearing they won’t do, I can’t think of any scenario under which they can avoid paying the tax if they add veteran players.
Trades, sign-and-trades, mid-level, bi-annual–all involve the Hawks taking on salary. They can bring back a little less in salaries than they send out in trades but rounding out the roster after the trade almost certainly would mean eventually paying some tax. Unless, of course, they fill five roster spots with nothing but undrafted rookie free agents but let’s not go there.
The other CBA element that comes into play for the Hawks is revenue-sharing. According to Coon: “A new plan approximately triples the amount of money that is revenue-shared. Details of this plan are yet to be finalized. ” The Hawks are in the large-market/low-revenue gray area so it’s not clear how big of a piece of that pie they will get. But if it’s a significant chunk it would boost their bottom line and could be another incentive to go ahead and pay the tax.
Your daily CP3
ESPN’s Chris Broussard and Marc Stein report that the Hawks are among the teams to call the Hornets about Chris Paul. That makes sense because, as the story notes, “virtually every team in the league has called” about Paul.
Certainly the Hawks have the assets to offer for Paul but I just don’t see how it’s feasible without Paul first committing to an extension, and it isn’t in his or (Dwight’s) financial interest to do that. Stein and Broussard report that Dallas and Boston are among “a small handful of teams” willing to trade for Paul with no assurances of an extension, and SI.com’s Sam Amick adds Houston to that list.
I’ve gotten a lot of questions about a previous Broussard report that mentioned Paul. So let’s review one more time exactly what he reported: “It’s not known whether Paul would consider signing an extension with the Hawks but he is known to be fond of the city of Atlanta.” Well, most of the league is fond of Atlanta–hell, it seems as if half the players live here–but that’s not the same as Paul wanting to play here and/or being willing to sign an extension to do so.
I sincerely feel for my blog people because of your history of heartache when it comes to Paul. So it makes me feel like kind of a jerk for downplaying the possibility of him coming here, and maybe it does happen, but I just wanted to make sure it’s clear what is out there.
Michael Cunningham, Hawks beat