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Getting the Celtics Under the Tax
Posted By Jason Fleming On October 26, 2011 @ 12:00 pm In All,NBA | No Comments
Heading into what will likely be a more restrictive environment with regards to the salary cap and luxury tax, quite a few teams will be faced with some major decisions with their roster. One of those teams is the Boston Celtics.
The Celtics have only seven players under contract for 2011-12 if the rookie scale contract for JaJuan Johnson, a first-round pick acquired on draft day, is included, totaling $65.5 million. They also have a Qualifying Offer out to forward Jeff Green for $5.9 million. If Green signs the QO, then the Celtics would be over the 2010-11 luxury tax line for $70.3 million and still need to add at least five players to fill out their roster, putting them firmly in luxury tax territory even under the old rules – and keep in mind, under the new ones, the tax level will likely be lower.
So what should the Celtics do about that? Do they care?
There are options being discussed in the collective bargaining agreement talks that may be able to lessen the commitments for a team. Much as Eric Pincus did yesterday in his discussion of the Los Angeles Lakers, let’s do the same for the Celtics.
First, the two provisions being discussed:
Amnesty: The amnesty clause in its current form would allow a team to waive one player. That player would be paid the full amount of his contract, but count only 25% of value against the cap for the duration of his contract. For example, if a player was due to make $4 million per season for the next three years, he would get a check for $12 million and the team would have a $1 million cap hit each year. That cap hit would also count towards the luxury tax, if applicable.
Stretch: The stretch provision being discussed would be available to a team who could cut a player, pay him his full outstanding contract value, and then spread out the amount over a fixed term. Seven years is the length that has been discussed. For the player above, he would get his $12 million check and then the team would have a $1.71 million cap hit in each of the next seven years.
Likely the amnesty clause would be a one-time deal, but the stretch clause is being discussed as something that could be used yearly, maybe even more often. It helps a team get out from under a bad deal and mitigate some of the damage. It’s similar in theory to what the NFL does with its “cap hits” for waived veterans (similar idea, not the same in practice).
This leads us back to the Boston Celtics, who have a lot of money committed to not very many players. They could absolutely decide none of this matters and instead simply pay the tax, filling out their roster as necessary.
The Celtics are an old team. Kevin Garnett, Ray Allen, Paul Pierce and Jermaine O’Neal – who are on the books for $52.8 million in 2011-12 – all have their best days behind them. Still talented and still capable, they simply will not give the Celtics $52.8 million worth of production next season, especially not in a market where the dollar has to be stretched further than before.
And besides, with the Chicago Bulls and Miami HEAT around and likely better next season than in 2010-11, are the Celtics championship material anymore? There is little doubt they are still competitive, but contenders? Yes, it could happen – it’s just not likely. Let’s take a closer look at each of the four players mentioned and what using the amnesty or stretch clauses could get the team.
Kevin Garnett: Garnett is owed $21.2 million in 2011-12, the final year of his contract. Amnesty would give the Celtics a cap hit of $5.3 million, cutting $16 million from their salary obligations. Using the stretch clause Boston would have a $3.04 million cap hit for the next seven years.
Of course, they would also then be in the market for a starting power forward and may not even be far enough under the cap to make a run at a serious talent.
Paul Pierce: Pierce is owed $47.5 million for the next three years (the last not fully guaranteed), so using either clause on him probably doesn’t get them much. Under the amnesty clause Boston would take cap hits of $3.83 million, $4.2 million, and $3.83 million the next three years. With the stretch clause they would take a $6.8 million for seven years.
And they would have to replace the heart and soul of the Celtics team. Pierce is probably as safe as any other Celtic.
Ray Allen: Allen is owed $10 million in the final year of his contract. Amnesty would give the Celtics a $2.5 million cap hit, while the stretch would be $1.43 million for seven years.
Fortunately for Allen, this doesn’t buy Boston much and they would not be able to replace his production in free agency.
Jermaine O’Neal: If there is a candidate for either of these clauses it’s O’Neal, owed $6.2 million in the last year of his contract. Amnesty would give the Celtics a $1.56 million cap hit in 2011-12. Using the stretch clause that becomes $0.89 million for the next seven years. Put another way, that’s less than a minimum salary contract for a veteran player.
O’Neal didn’t give Boston much last year, so using the amnesty clause here makes some sense.
Where does all of that leave the Celtics? It’s all about being able to find replacements, and even a combination of theses clauses would leave Boston ill-equipped to find players as good in free agency. With Garnett, O’Neal and Allen all only having one year left on their deals, it makes more sense for Boston to simply run out this core one more time, then really blow it up next summer. If they did that all three players come off the books and they could, should they desire to tear things to the ground around Rajon Rondo, use the stretch clause on Pierce then. At that point the last two years of his deal could be stretched out for seven years of cap hits at $4.59 million a season (actually, that’s still a lot).
And no, this doesn’t even begin to take into account fan reaction to tearing the Celtics limb from limb at a point most will deem too early. The backlash and what that could mean to ticket sales could be dramatic.
These clauses will generate a ton of discussion and speculation if they become reality, but when it comes to the Boston Celtics they will probably just need to sit tight and wait until 2012 before making major changes.
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