Exclusive: Owners proposing 4 luxury tax levels

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By Chris Sheridan

NEW YORK — As noted in this earlier post, a few details of what was in the owners’ latest proposal to the players’ union have come to light.

Here is another one: SheridanHoops.com has learned that the owners have proposed four different levels of the luxury tax, with the tax increasing from a dollar-for-dollar levy on teams slightly above the luxury tax threshold (which was  $70.307 million last season, when the Lakers, Magic and Mavericks were reportedly the only tax-paying teams), up to a 4-to-1 tax for teams that go more than $10-15 million over the threshold.

There are also separate triggers for a 2-to-1 tax and a 3-to-1 tax.

Negotiations are resuming this morning in New York, and David Stern has called it a “key day” as the sides are not expected to meet Thursday or Friday because of the Jewish holiday Rosh Hashanah. 

But from what I can gather through my discussions with sources is this: Don’t expect any significant breakthroughs today, as the 11th hour has not yet arrived. That’ll come roughly a week from now, when a deal must be cut in order to save the scheduled Nov. 1 start of the regular season. 

 

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  1. Totally called this at 4 a.m. scope the earlier lockout article where i proposed a soft cap with a luxury tax that increases the more you go up. I say get rid of all exceptions though.

  2. So it appears that this provision was written in Moscow and kindly provided to the NBA owners.

    Is there anything in these proposals that don’t benefit Mikhail Prokhorov and his $25 billion forture. Double amnesty, four levels of luxury tax.

  3. If the they keep the #s around the same for the cap, I think this is very reasonable for both sides. So teams that are only up to $5 mil over the luxury tax pay $2 for every $1 over, and then around $10-$15 (like you said) would pay $3-4 for every $1 over. It might even make sense to make a rule about how many times a team can go over every couple of years (which I don’t support, but I see the owners pushing it), but that makes it even more like a hard cap.
    Overall, if the Hunter and Fisher agree to that it might not matter because the agents and some players could easily decline it (although I don’t think they can find a much better deal without losing the whole season).

    Chris, what do you expect to happen in todays meeting?

  4. So basically the owners want to keep the system they currently have, call it something different, but want to pay MORE when they keep spending as they’ll still be allowed to do? You think that owners aren’t going to still feel forced to pay to retain their talent just because they’ll face a bigger luxury tax?

    Makes absolutely no sense.

    But great news for teams with super wealthy spending owners like Lakers, Nets, Knicks, and Mavs. There still won’t be parity, but with revenue sharing perhaps other small-spending/market owners will be happier with their continuing loss of players and games.

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  1. [...] thresholds. Zimbalist says he would not be surprised if penalties got as high as a 3-to-1 ratio. Chris Sheridan reports today that the proposed tax would jump to a 4-to-1 ratio for teams that get more than “$10 million [...]

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