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Luxury Tax
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Andrew
Posts: 26493
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Joined: 7/24/2001
Member: #1
USA
7/26/2001  8:25 AM
Got this info from a Houston Rockets forum. Interesting.

First off, there might not be a Luxury Tax this year. It all depends how much money the league makes as a whole versus the amount of salaries and benefits paid to players. Salaries and benefits must exceed 61.1% of league-wide revenues for a tax to kick in.

Secondly, if one does kick in, they are predicting the tax threshhold to be about $54m.

At this point, the best guess is that the league will make enough money to prevent ANY luxury tax this year. We will not know officially whether a tax kicks in or not until the BRI is calculated in the 2001-2002 audit. But preliminary Salary numbers from the Coon group and revenue estimates indicate the league is healthy and robust and keeping salaries in line with growth...thus no Luxury Tax will likely be needed.

What does this mean? This means that anytime your hear an owner or an agent or journalist mention the Luxury Tax as a reason to make trades or offer salaries, that statement is based on no certainty that there will even be a tax this year.

If you really want to know more about the tax...
http://www.members.home.net/lmcoon/salarycap.htm#15
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cowboy
Posts: 20007
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Member: #13
7/26/2001  2:28 PM
good post, interesting info. Keep in mind though: the owners are business men first and foremost. Any "excuse" they can give to not spend money, they will certainly use, especially if the understanding of the salary cap and luxury tax is not fully understood by the fans. Hey, thank god we aren't a small market team and that Dave Checketts has set a path in place whereby NY will spend money to get players. I can't get tickets anyhow, so what do I care about ticket increases <sigh>.
Fordy74
Posts: 20257
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Joined: 8/1/2001
Member: #51
USA
7/31/2001  11:26 PM
good post, interesting info. Keep in mind though: the owners are business men first and foremost. Any "excuse" they can give to not spend money, they will certainly use, especially if the understanding of the salary cap and luxury tax is not fully understood by the fans. Hey, thank god we aren't a small market team and that Dave Checketts has set a path in place whereby NY will spend money to get players. I can't get tickets anyhow, so what do I care about ticket increases <sigh>.

sorry I cant figure out how to simply reply without using reply with qoute.

I just was going to mention maybe Layden went after spoon and paid him all that dough because he is hoping the luxury tax wont kick in.
Luxury Tax

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