Hoops Rumors Originals

Hoops Rumors Originals: 3/15/20 – 3/21/20

Every week, the Hoops Rumors writing team publishes original content to complement our news feed. Listed below are our original segments and features from the past seven days:

  • We explored what the lottery odds for the 2020 NBA draft look like if the season doesn’t resume.
  • We also explored which traded 2020 picks would and wouldn’t change hands based on the current league-wide standings.
  • Luke Adams explained everything you need to know about luxury tax penalties in the latest Hoops Rumors Glossary post.
  • He also examined the minimum salary exception, one of the NBA’s most commonly used cap exceptions.
  • Our Community Shootaround this week focused on the best NBA games to re-watch during the league’s hiatus.
  • Our poll question relates to whether the NBA should change its calendar in response to the coronavirus pandemic. Would you be in favor of shifting the entire NBA calendar back by roughly six-to-eight weeks on a permanent basis?
  • NFL free agency is continuing to push forward in the midst of this hiatus. Be sure to check out Pro Football Rumors to stay in the loop on all NFL-related updates.

Hoops Rumors Glossary: Luxury Tax Penalties

Although some NBA teams can become hard-capped during a given league year if they use specific exceptions or make certain transactions, the NBA doesn’t have a set hard cap for all teams. In addition to its soft cap though, the league does have a luxury tax threshold, which serves to discourage excessive spending. When a team’s total salary ends up over that line at season’s end, the NBA charges a tax for every extra dollar the club spends.

[RELATED: Recent History of NBA Taxpaying Teams]

The formula to determine the luxury tax line is a complicated one, related to the NBA’s projected basketball related income (BRI) and projected benefits. Generally though, it comes in around 20-22% above the salary cap line. For instance, in 2019/20, the league’s salary cap is set at $109,140,000, while the luxury tax threshold is at $132,627,000. So any team whose total ’19/20 salary exceeds $132,627,000 on the last day of the regular season is subject to a tax bill.

The NBA’s luxury tax system is set up so that the penalties become more punitive if teams go further beyond the tax line. Here’s what those penalties look like:

  • $0-5MM above tax line: $1.50 per dollar (up to $7.5MM).
  • $5-10MM above tax line: $1.75 per dollar (up to $8.75MM).
  • $10-15MM above tax line: $2.50 per dollar (up to $12.5MM).
  • $15-20MM above tax line: $3.25 per dollar (up to $16.25MM).
  • For every additional $5MM above tax line beyond $20MM, rates increase by $0.50 per dollar.
    • Note: This would mean $3.75 for $20-25MM, $4.25 for $25-30MM, etc.

For instance, if a team is over the tax by $12MM, its tax bill would be $21.25MM: $7.5MM for the first $5MM over the tax, $8.75MM for the $5-10MM bracket, then $5MM for the final increment in the $10-15MM bracket.

While those are the rates that apply to most taxpayers, including the Trail Blazers, Heat, and Timberwolves this season, a team can become subject to a “repeater” penalty if it paid the tax in three of the previous four seasons. This scenario currently applies to Oklahoma City — the Thunder were a taxpaying club in 2016, 2018, and 2019, which means they’ll be a repeat offender this season. Here are the penalties that apply to repeat taxpayers:

  • $0-5MM above tax line: $2.50 per dollar (up to $12.5MM).
  • $5-10MM above tax line: $2.75 per dollar (up to $13.75MM).
  • $10-15MM above tax line: $3.50 per dollar (up to $17.5MM).
  • $15-20MM above tax line: $4.25 per dollar (up to $21.25MM).
  • For every additional $5MM above tax line beyond $20MM, rates increase by $0.50 per dollar
    • Note: This would mean $4.75 for $20-25MM, $5.25 for $25-30MM, etc.

If the hypothetical team we described in our first example, over the tax by $12MM, was a repeat taxpayer, its bill would increase to $33.25MM.

Generally speaking, luxury tax penalties are calculated by determining a team’s total cap hits at the end of the regular season. So a team that starts the year above the tax line could get under it before the end of the season by completing trades or buyouts. The Warriors did just that in February, slipping below the luxury tax threshold by completing a series of trades that reduced their overall team salary.

[RELATED: Projected Taxpaying Teams For 2019/20]

However, team salary for tax purposes is calculated slightly differently than it is for cap purposes. Here are a few of the adjustments made at season’s end before a team’s tax bill is calculated:

  • Cap holds and exceptions are ignored.
  • “Likely” bonuses that weren’t earned are removed from team salary; “unlikely” bonuses that were earned are added to team salary.
  • If a player with a trade bonus is acquired after the final regular season game, that trade bonus is added to team salary.
  • If a player with 0-1 years of NBA experience signed a minimum-salary free agent contract, the minimum-salary cap charge for a two-year veteran is used in place of that player’s cap charge.
    • Note: This only applies to free agents, not drafted players. For example, Raptors rookies Dewan Hernandez (second-round pick) and Terence Davis (UDFA) are each earning $898,310 in 2019/20. Hernandez would count for $898,310 for tax purposes, while Davis would count for $1,620,564.

So let’s say that five teams finish the season owing a total of $50MM in taxes. Where does that money go? Currently, the NBA splits it 50/50 — half of it is used for “league purposes,” while the other half is distributed to non-taxpaying teams in equal shares. In that scenario, the 25 non-taxpaying teams would receive $1MM apiece.

As cap expert Larry Coon explains in his CBA FAQ, “league purposes” essentially covers any purpose the NBA deems appropriate, including giving the money back to teams. In recent years, the NBA has used that money as a funding source for its revenue sharing program. Coon also notes that the CBA technically allows up to 50% of tax money to be distributed to non-taxpaying teams, but there’s no obligation for that to happen — in other words, the NBA could decide to use 100% of the tax money for “league purposes.”

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

Earlier versions of this post was published in 2012 and 2018.

Community Shootaround: NBA Games To Rewatch

With no new games to watch as the NBA continues its coronavirus-related suspension, the league announced this week that it’s making League Pass available for a free trial through at least April 22.

That means that NBA fans will have the opportunity to rewatch any games from the 2018/19 or 2019/20 seasons, along with a few dozen games from previous seasons deemed to be classics.

With that in mind, a panel of ESPN writers picked out 30 games – one for each team – worth rewatching from the last two seasons, including the Celtics‘ double-overtime win over the Clippers last month, the Rockets‘ 159-158 win over the Wizards earlier in the season, Kawhi Leonard‘s first return to San Antonio last season, and several memorable playoff games from the 2019 postseason.

ESPN’s list is a good start, but it’s hardly exhaustive. So we want to open up the conversation to you.

Are you taking advantage of the free League Pass preview? If so, which games from the last two seasons are you watching first? Which of the league’s classic games are you curious to rewatch or perhaps check out for the first time? And which games would be your all-time top picks for rewatching, regardless of NBA League Pass availability?

Hoops Rumors Glossary: Minimum Salary Exception

The minimum salary exception is something of a last resort for capped-out teams looking to add players, as well as for players seeking NBA contracts, but it’s one of the most commonly used cap exceptions. It allows an over-the-cap team to sign a player to a one- or two-year minimum-salary deal, as its name suggests.

Teams can use the exception multiple times in a league year, giving clubs that have used all of their cap room and other exceptions an avenue to fill out their rosters. The exception also accommodates teams’ acquisitions of minimum-salary players via trade, as players signed via the minimum salary exception don’t count as incoming salary for salary-matching purposes.

Players are entitled to varying minimum salaries based on how long they’ve been in the NBA. In 2019/20, a player with no prior NBA experience was eligible for a $898,310 minimum salary, while a player with 10 or more years of experience was eligible for $2,564,753.

[RELATED: NBA Minimum Salaries For 2019/20]

Over the course of the current Collective Bargaining Agreement, the minimum salary will be adjusted each season to reflect the year-to-year salary cap change. For instance, if the cap increases by 5%, so will minimum salaries.

There’s a wide disparity between the minimum salary for rookies and for long-tenured players, with a minimum-salary veteran of 10+ seasons earning nearly three times as much as a rookie making the minimum next season. The NBA doesn’t want those pricier deals to discourage clubs from signing veterans, however, so the league reimburses teams for a portion of a minimum-salary player’s cost if he has three or more years of experience, as long as the contract is a one-year deal.

For example, when the Lakers signed 15-year veteran Dwight Howard to a one-year pact for 2019/20 using the minimum salary exception, the contract called for a salary of $2,564,753, but the team’s cap hit was just $1,620,564. The league would reimburse the Lakers for the remaining $944,189 at season’s end.

Most salary cap exceptions can only be used once each season. For example, when a team uses its full mid-level exception to sign one or more players, the club can no longer use that exception until the following season. Unlike the mid-level and other cap exceptions though, the minimum salary exception can be used any number of times in a single season. The Lakers, for instance, used the minimum salary exception to sign Jared Dudley and Troy Daniels in addition to Howard.

While many exceptions begin to prorate on January 10, the minimum salary exception prorates from the first day of the regular season. The season is typically 177 days long, so if a player signs after 28 days have passed, he would only be paid for 149 days.

That’s what happened this season with Carmelo Anthony, who joined the Trail Blazers via the minimum salary exception on November 19, the 29th day of the regular season, making his salary and cap hit 149/177ths of their usual amounts. Instead of a $1,620,564 cap charge for Portland, Anthony’s cap charge is $1,364,204. His salary is $2,159,029 instead of $2,564,753.

Here are a few more notes on the minimum salary exception:

  • Players signed using the minimum salary exception are eligible for trade bonuses, but not incentive bonuses. A minimum-salary player with a trade bonus cannot be acquired in a trade using the minimum salary exception unless he waives that bonus.
  • A minimum-salary player also can’t be acquired in a trade using the minimum salary exception if his contract is for more than two years or if his salary exceeded the minimum in any previous year of the contract.
  • When a minimum-salary player is traded during the season, any reimbursement from the NBA is split between his two teams. It’s prorated based on the number of days he spends with each club.
  • If a minimum-salary player with a non-guaranteed salary is waived before he exceeds the minimum for a two-year veteran, his team won’t be reimbursed for any portion of his salary.
  • Virtually every 10-day contract is for the minimum salary — often the minimum salary exception is the only way for clubs to accommodate any 10-day deals. The NBA also reimburses teams for a portion of the 10-day minimum salary for veterans with three or more years of experience. We have more details here.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ and the Basketball Insiders salary pages were used in the creation of this post.

Earlier versions of this post were published in previous years by Luke Adams and Chuck Myron. Photo courtesy of USA Today Sports Images.

Where Traded Draft Picks Would Land If Season Doesn’t Resume

Earlier today, we explored what the lottery odds for the 2020 NBA draft would look like if the regular season doesn’t resume. We’re now applying that hypothetical to another aspect of the draft and examining which traded 2020 picks would and wouldn’t change hands based on the current standings.

Our projections below assume that the NBA will sort its standings by winning percentage in scenarios where teams haven’t played the same number of games this season. Again, this is just a hypothetical exercise — if the season resumes, the order below would likely change.

With that in mind and with the help of our reverse standings, let’s take a closer look at where this year’s traded draft picks would land if the NBA has played its last regular season game of 2019/20.


First round:

  1. Minnesota Timberwolves (from Nets)
  2. Boston Celtics (from Grizzlies)
  3. Brooklyn Nets (from Sixers)
    • Note: Could be No. 20 depending on random tiebreaker.
  4. Milwaukee Bucks (from Pacers)
    • Note: Could be No. 19 depending on random tiebreaker.
  5. Philadelphia 76ers (from Thunder)
    • Note: Could be No. 22 depending on random tiebreaker.
  6. Denver Nuggets (from Rockets)
    • Note: Could be No. 21 depending on random tiebreaker.
  7. Oklahoma City Thunder (from Nuggets)
  8. New York Knicks (from Clippers)
  9. Boston Celtics (from Bucks)

Protected picks:

  • Golden State Warriors (to Nets; top-20 protected)
  • Cleveland Cavaliers (to Pelicans; top-20 protected)
  • Utah Jazz (to Grizzlies; top-7 and 15-30 protected)

Notes:

  • The Thunder pick would be the one worth watching closest if the season does resume. It’s top-20 protected, so OKC would keep it if it were to move up a spot or two, sending the Sixers second-round picks in 2022 and 2023 instead.

Second round:

  1. Dallas Mavericks (from Warriors)
  2. Charlotte Hornets (from Cavaliers)
  3. Philadelphia 76ers (from Hawks)
  4. Sacramento Kings (from Pistons)
  5. Philadelphia 76ers (from Knicks)
  6. Washington Wizards (from Bulls)
  7. New York Knicks (from Hornets)
  8. New Orleans Pelicans (from Wizards)
  9. Memphis Grizzlies (from Suns)
  10. Boston Celtics (from Nets)
  11. Chicago Bulls (from Grizzlies)
  12. Golden State Warriors (from Mavericks)
  13. Atlanta Hawks (from Rockets)
    • Note: Could be No. 51 depending on random tiebreaker.
  14. Sacramento Kings (from Heat)
  15. Golden State Warriors (from Jazz)
  16. Brooklyn Nets (from Nuggets)
  17. Charlotte Hornets (from Celtics)
  18. Philadelphia 76ers (from Lakers)
  19. New Orleans Pelicans (from Bucks)

Protected picks:

  • Indiana Pacers (to Nets; 45-60 protected)
  • Portland Trail Blazers (to Nets; top-55 protected)

Notes:

  • The Hawks will receive the more favorable of Houston’s and Miami’s second-round picks, while the Kings will receive the less favorable of those two picks. Those two picks could end up right next to one another, since the Rockets (40-24) and Heat (41-24) have nearly identical records.
  • The Celtics’ pick looks like it will be one of the rare second-rounders with heavy protection that will actually change hands. Boston would have kept it if it had fallen in the top 53.

Community Shootaround: Monumental Star Movement

Earlier today, we saw NFL legend Tom Brady change teams, opting to take his talents to Tampa Bay (be sure to check out our sister site Pro Football Rumors for the latest during NFL free agency).

The NBA has seen many great star players change teams in recent years. LeBron James did it three times, leaving the Cavaliers for the Heat, the Heat for the Cavs, and then the Cavs for the Lakers.

Some have compared the Brady signing to LeBron’s move, while others have matched it up with Michael Jordan joining the Wizards in the early 2000s. Brady is the greatest QB to play football and many consider Jordan the best to ever play basketball. Yet, the comparison of the two moves doesn’t go much further than that. Jordan came out of retirement to play for Washington while Brady just came off a season where he led his team to a division title and a playoff berth.

That leads us to tonight’s question: Where does Brady moving to Tampa Bay rank in terms of monumental moves among star players and what NBA move would you compare it to? Is it bigger than LeBron going to Miami or – with the 43-year-old quarterback on the last leg of his career – is the signing not as colossal?

Take to the comment section below to share your thoughts and opinions. We look forward to what you have to say!

What 2020 Lottery Odds Would Look Like If Season Doesn’t Resume

While the NBA hopes that resuming the 2019/20 season will be possible, there are scenarios in which the league could proceed directly to the postseason or has to cancel the rest of the ’19/20 campaign entirely. If such measures are necessary, it would mean that the NBA’s current standings will be its final standings.

It’s tricky to say exactly what that would mean for an event like the 2020 NBA draft, which hinges in large part on the previous season’s standings. After all, some teams have played as few as 64 games, while others have played as many as 67.

Teams like the Hawks (20-47) and Cavaliers (19-46) are an equal number of games back of the clubs ahead of them the standings, but Atlanta has the better winning percentage. Presumably, that would mean Cleveland moves ahead of the Hawks in the projected draft order and for lottery odds purposes. Based on winning percentage, the Cavs would also have better lottery positioning than the Timberwolves (19-45), despite having the same number of wins.

With that in mind, we’re looking today at what the lottery odds would be if the NBA’s regular season doesn’t resume and the league ranks its teams by winning percentage. It’s a hypothetical exercise, but one which could become increasingly relevant the longer the league’s hiatus extends.

For a full breakdown of how the NBA draft lottery works, be sure to check out our glossary entry on the subject. The standard odds chart for the new draft lottery format is included in our glossary entry, but the numbers in that chart don’t quite match up with 2020’s lottery, since the Kings and Pelicans currently have identical records. That tie would impact the odds for this year’s lottery.

With the help of our reverse standings and data from Tankathon.com – which is worth bookmarking for all sorts of draft-related info – we’ve listed the new, hypothetical odds for 2020 in the chart below.

The numbers in the chart indicate percentages, so the Warriors, for example, have a 14% chance of landing the No. 1 pick and a 47.9% chance of ending up at No. 5. If a team’s odds are listed as >0, that percentage is below 0.1%.

Here’s the full chart:

Team 1 2 3 4 5 6 7 8 9 10 11 12 13 14
GSW 14 13.4 12.7 12 47.9
CLE 14 13.4 12.7 12 27.8 20
MIN 14 13.4 12.7 12 14.8 26 7.1
ATL 12.5 12.2 11.9 11.5 7.2 25.7 16.8 2.2
DET 10.5 10.5 10.6 10.5 2.2 19.6 26.7 8.8 0.6
NYK 9 9.2 9.4 9.6 8.6 29.6 20.6 3.8 0.2
CHI 7.5 7.8 8.1 8.5 19.7 34.1 12.9 1.3 >0
CHA 6 6.3 6.7 7.2 34.5 32.1 6.7 0.4 >0
WSH 4.5 4.8 5.2 5.7 50.7 25.9 3 0.1 >0
PHX 3 3.3 3.6 4 65.9 18.9 1.2 >0 >0
SAS 2 2.2 2.4 2.8 77.6 12.6 0.4 >0
SAC* 1.3 1.4 1.6 1.8 86.1 7.6 0.1
NOP* 1.2 1.3 1.5 1.7 92.0 2.3
POR 0.5 0.6 0.6 0.7 97.6

* The Kings and Pelicans have matching 28-36 records and would be subject to a random tiebreaker to determine which team gets the No. 12 slot and which gets No. 13. Their spots in this list (and their odds) could be flipped.

Check Out Pro Football Rumors For NFL Offseason Updates

None of North America’s major sports leagues are currently playing games, but the NFL is in the midst of one of its biggest weeks of the year, and Pro Football Rumors is covering all the action.

The NFL’s free agency period kicked off on Monday with a series of agreements on major deals, including the Texans trading DeAndre Hopkins to the Cardinals, the Vikings sending Stefon Diggs to the Bills, and Amari Cooper reaching a $100MM deal with the Cowboys.

Tuesday began with Tom Brady dropping a bombshell, announcing that his time with the Patriots has come to an end. Brady’s eventual landing spot is one of the biggest NFL offseason questions still to be answered, but Pro Football Rumors is keeping tabs on every potential roster move, big and small.

If you’re suffering from NBA rumor withdrawal and you’re an NFL fan, be sure to follow PFR (@pfrumors on Twitter) for all the latest offseason updates.

Poll: NBA’s Annual Calendar

With the NBA considering the possibility of resuming its season in June and potentially completing the NBA Finals in August, ESPN’s Bobby Marks laid out on Twitter how the league’s calendar could hypothetically change for the 2020/21 league year if the NBA decided to push everything back.

As Marks detailed, a new experimental calendar might look something like this:

  • Mid-June: Start of playoffs
  • Early August: NBA Finals
  • Late August: Draft
  • September 1: Start of free agency
  • September 10: Fall league (In place of Summer league)
  • December 10: Training camps open
  • December 25: 82-game regular season begins
  • Mid-June: Regular season ends

That calendar is almost exactly the one Hawks CEO Steve Koonin proposed earlier this month at the Sloan Conference, as we noted last week. Koonin’s argument was that pushing everything back by a couple months would result in less overlap between the NBA and NFL seasons and would increase the amount of time that MLB regular season games are the NBA’s only competition among the four major sports.

Of course, Koonin didn’t have the current situation in mind when he put forth his proposal, but depending on how the coronavirus spread plays out, the layoff may line up in a way that allows the NBA to test the idea if the league doesn’t want to shorten the 2020/21 season too.

NBA reporters and fans who responded to Koonin’s proposal and Marks’ tweet have had mixed opinions. Many have pushed back against losing the summer break that typically follows free agency and Summer League play in July, August, and September. This schedule would also limit NBA players’ ability to participate in international offseason competitions, such as the Olympics or World Cup.

Still, there has been a good amount of support for the idea. The fall is one of the busiest times in sports, with the MLB and MLS postseasons happening, as well as the NHL and NFL regular seasons. Pushing the NBA’s opening night back to December would mean avoiding much of that overlap and turning the Christmas Day showcase into an event that occurs at or near the start of the regular season. Plus, as Marc Stein of The New York Times tweets, many NBA teams would actually be in favor of their players not participating in offseason events like the Olympics.

At this point, even with the NBA’s hiatus threatening to upend this year’s schedule, the idea of making a permanent change to the league’s calendar is probably just a pipe dream. But we want to know what you think.

Would you be in favor of shifting the entire NBA calendar back by about six-to-eight weeks on a permanent basis? Or do you prefer the current setup?

Vote in our poll, then head to the comment section below to share your thoughts!

Trade Rumors app users, click here to vote.

Hoops Rumors Originals: 3/8/20 – 3/14/20

Every week, the Hoops Rumors writing team creates original content to complement our news feed. Here are our original segments and features from the past seven days:

  • Luke Adams broke down the seven NBA players on active 10-day contracts when the NBA suspended its season. The postponed season will pause all the players’ tenure with their current teams.
  • Adams examined the 2019/20 disabled player exceptions due to expire last week.
  • For our Free Agent Stock Watch, Dana Gauruder took a look at the Southwest Division. Marquese Chriss and Alex Len‘s recent play had both centers on the ascent.
  • In this week’s poll, we wondered which team was the biggest threat to an all-L.A. Western Conference Finals. (link)
  • In our Community Shootaround this week, we asked you to weigh in on who you felt were the best coaches available in the coming offseason. (link)