Could Philadelphia 76ers help Lakers ditch luxury tax?
If the Philadelphia 76ers are willing, the Lakers might have a way under the luxury tax and, more important, the repeater tax.
The league currently levies a progressive tax that penalizes teams for every $5 million they spend on salary over the threshold of $71.7 million.
The repeater tax, which won’t start until the 2014-15 season, adds a dollar-for-dollar tax in addition to the progressive tax. A $90-million roster at the current threshold would cost a team $39.3 million (progressive) plus $18.2 million (repeater).
The only way to avoid repeater taxes is to stay under the line for two out of five seasons.
The Lakers will be under the tax for the 2014-15 season -- even if they land two max players. If the team scores in free agency, it might be in a position to spend above the luxury tax for the 2015-16 season in an attempt to build a true contender.
Its best option would be to get out of the tax for the coming season, where it projects to be about $7.4 million over the line (based on a projected team salary of $79.2).
That’s not an easy task, given the team’s apparent commitment to Kobe Bryant, Pau Gasol and Steve Nash.
If they could find a taker for Steve Blake and Jordan Hill, the Lakers would shed $7.5 million. That’s just enough to get under the tax.
Blake makes $4 million and Hill $3.5 million in the final year of their contracts. The difficulty is in finding a team that is able and willing to take on salary without sending any players in return.
As reported by Hoopsworld.com, the Philadelphia 76ers are the only team significantly under the league’s minimum team salary.
After Philadelphia signs its two first-round draft picks (Nerlens Noel and Michael Carter-Williams), it’ll still be about $8 million under the minimum. If it doesn’t spend that amount on players, the team will be forced to cut a check at the end of the season to the players on its roster for the shortfall.
The Sixers would presumably want draft considerations and cash from the Lakers, who could send up to $3.2 million in the deal to help pay for Blake and Hill. The Lakers can’t send a future first-round pick until 2019, although they have all of their second-rounders starting in 2016.
There’s certainly no guarantee Philadelphia would consider such a move. The 76ers may have grand designs for their cap space -- or find other teams simply offering more than the Lakers are able to.
If Lakers General Manager Mitch Kupchak were able to push through such a bold move, perhaps summer-league standout Lester Hudson could serve as the team’s third point guard behind Nash and Jordan Farmar.
Lamar Odom remains a free agent. If he’s willing to sign for a minimum contract, he could step into the starting lineup at power forward alongside Pau Gasol -- replacing Hill.
Blake is coming off a strong season with the Lakers, despite injuries. Hill still has a lot of potential as a rebounder and shot-blocking forward-center.
Losing both might be a difficult decision for the Lakers but avoiding the repeater tax should be the priority in this transition year. Cutting $7.5 million now could save in the neighborhood of $60 million over three future years.
Even if the Lakers sent $3.2 million in cash to the Sixers, the Lakers would still benefit by about $18 million in reduced salary and taxes, among other advantages from getting under the threshold.
Sacrificing solid veterans like Blake and Hill might sting, but if it helps put the Lakers in a better position to rebuild, it’s the right move to make.
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