Jerry Reinsdorf to "strongly consider" paying the luxury tax for "reasonable" chance at a championship

Jerry Reinsdorf to "strongly consider" paying the luxury tax for "reasonable" chance at a championship

One of the biggest questions of any Bulls fan planning for how to build a team is based on Jerry's approach to the luxury tax. A willingness to pay changes everything in terms of how the Bulls can approach team building.

Per KC Johnson:

Jerry Reinsdorf said he would give strong consideration to paying the NBA's luxury tax if he could acquire a player who gave the team a reasonable chance to win a championship.

Reinsdorf offered his thinking through a team spokesman Wednesday, the first day executives and coaches could comment on team affairs since the NBA lockout began on July 1.

Does this quote really give you the warm fuzzies? Not me.

However, I will would rate four possibilities from best to worst.

1: He goes Mark Cuban style on this thing and announces "I trust John and Gar. They have my permission to spend as much financially as it takes to win a title".

2: This hedging statement which says he'll pay it, but only if he's pretty certain that it will be worth it.

3: No comment at all.

4: The insanely stupid comment of "no way I'm paying the tax.

So I guess that gives this statement a solid "B" on the grade school scoring scale, but it kind of feels like kissing your sister. The quote reeks of "I'll only pay the luxury tax because I'm going to get the money back anyway if we win a title".

Forbes hasn't released its profit analysis yet this year for last years NBA, but the Bulls likely banked 70-80 million in profit last season. At Salaries would rise another 12 million to get to the luxury tax border. Say the Bulls go 10 million into the tax and have to pay 20 million on top of that. [it's still 1 to 1 for two more years].

That gives Reinsdorf a profit of around 40-50 million anyway. Look, I'm not asking the guy to go profitless in order to win a championship [though I feel that's actually a fairly reasonable request given what he has sucked out of his fan base during the years the team won 15-20 games a season], but even a foray of 10 million into tax territory probably leaves the Bulls as the third most profitable team in the NBA.

Now maybe Reinsdorf's commitment is stronger than his words. Conservative men tend to hedge their words even when they feel strongly about something. Reinsdorf is a conservative man, and so while his phrasing here is a bit wishy washy, I'll leave open the possibility that the sentiment behind it is stronger than the statement made.

I'd also state that I absolutely believe what he's saying here. I expect that the Bulls will enter the luxury tax territory.

Let me say this though. If the Bulls refuse to make a move due to financial consequences prior to hitting the 85 million in salary mark in year two then I will view it as an epic failure on ownerships part. I'd still view it as an ownership failure if they refuse to pay any amount of luxury tax, but at 85 million it starts to get understandable at least.

There are several counterarguments to this theory:
1: It's Jerry's money you shouldn't tell him what to do with it.

As a season ticket holder for roughly a decade, I've personally invested roughly $50,000 into Bulls tickets and merchandise, and that money as a percentage of my net worth is certainly a far greater hit financially than anything I'm asking Reinsdorf to make as a percentage of his.

2: The luxury tax doesn't correlate to winning

That's true, of course, no one is saying if Jerry spent into the luxury tax in 2003 that he'd have won a title. However, the Bulls were a final four team in the NBA last season. They are incremental improvement away from winning a title. In their case, incremental improvements CAN lead to a championship.

How many titles would the Phoenix Suns have right now if their ownership was willing to pay the luxury tax? More than 0 most likely.

How many titles would the Dallas Mavericks have if they weren't willing to pay the luxury tax? 0.

How about the Lakers? Certainly a couple less.

Simply spending doesn't equate to a championship, but for teams that are on the cusp and still need more a lack of spending dooms their chances. The Bulls are such a team. LeBron, Bosh, and Wade all took pay cuts to play together.

The Bulls don't have any big name talent on cheap deals after this season. They're going to need to outspend the Heat to put together a similar talent pool, and the Heat are going into the tax.

Is Andre Iguodala a legitimate possibility?

Iguodala fits the profile of a guy that meets Jerry's requirements in my opinion. I think you add Iguodala while only subtracting your role playing perimeter players, and you've given yourself a reasonable chance to win a title.

The question will only be on how available he is and whether or not Philly is looking for salary relief or talent back. If they want salary relief plus picks the Bulls can make a nice offer with the Charlotte pick + their own first and expiring deals.

Watson + Bogans + Brewer should work for Iguodala should work under the new trade rules and save Philly over around 33 million dollars in total. Whether that combination plus a couple picks is enough and whether the Bulls have legitimate interest remain to be seen.

Filed under: Salary cap

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  • I have no idea what Jerry Reinsdorf is going to do? However, I'm glad to see you acknowledge that the Heat will be a luxury tax team. Mickey Arison has the resources and desire to play ball with Jerry Buss, James Dolan, and Mark Cuban.

  • I like the Iggy idea. He isn't the greatest 3pt threat, but he can create his own shot and play defense. He's not a #1 option like he's been forced to be in Philly, but he'd be the perfect #2 option on the Bulls. Hopefully Philly is willing to take our junk in order to clear some cap space.

  • In reply to NateTags:

    He's not a bad 3 pt threat either, not by any means

  • In reply to ChiRy:

    You're right, he's not bad...just not on par with some of the other guys (without looking at the stats) like Richardson, Afflallo, etc.

  • In reply to NateTags:

    True, but as you mention, his ability to create his own shot & play defense, along with his size, athleticism, & passing ability really sets him apart from the other guys.

  • In reply to ChiRy:

    Exactly, that's why I think it would be a great move.

  • In reply to NateTags:

    Me too, wonder if this is really being discussed at all.

  • I'd love us to get Iggy!
    I however hate losing Brewer who is a athletic SG/SF player and plays hard!
    Iggy is a established proven scorer and pro and we need someone like this to carry the offensive load that Rose carried like Hercules on his shoulders last year to be the youngest MVP ever! :-)
    I rather have a person like Iggy that can attack the basket rather then a 3rd pt shooter like Ray Allen.
    We have that already in KK.
    CJ did a decent job especially later on in the season to lead the mob squad but he is a short SG that had to learn to be a PG.
    You could say that about Rose too but he absolutely had to shoulder the scoring burden and look for his own shot because we didn't have the offensive weapons on the team.
    Its a lot to ask your PG to do that for you, much better obviously in a traditional scenario to have your SG or SF do the bulk of your scoring!
    If we can't get Iggy I would be fine with Jason Richardson or even Stephen Jackson as most of us were considering even a somewhat questionable character guy like JR Smith but can score in bunches!
    We got CJ from Golden State where they are used to jacking up shots and have been trying to keep but Ellis and Curry happy together both high volume SGs.

  • In reply to smiley:

    One good thing about Iggy is that he's a decent ball handler. He could initiate the offense on occasion with Rose running off of some screens, lob passes, etc. It would be another option to throw at opposing defenses rather than the same old thing.

  • Your main error is that, unlike Cuban it is not Jerry's money. Jerry is just the managing partner and face of several limited partnerships, including the one that owns the Bulls. See, e.g. this Hoover's profile summary: http://www.hoovers.com/company/Chicago_Professional_Sports_Limited_Partnership/cjxtri-1.html

    So, Jerry may be talking, but you should know that if Gar or Pax came up with someone real expensive, the limited partners would have to approve it. Heck, even though it is the "Ricketts Family" who owns the Cubs, it was said that Theo still must adhere to a budget, even though he is in charge of baseball operations. Similarly, Kenny might have said that the White Sox were all in last year, but is owned by Chicago White Sox, Ltd.

  • In reply to jack:

    Reinsdorf doesn't completely own the team, but he is the majority partner in it and certainly has the ability to approve whatever he feels like.

  • In reply to jack:

    Jack ... that's incorrect ... the other partners have absolutely no say in operations. Only the managing partner does.

  • In reply to jack:

    Right, and Steve Jobs couldn't make any decision he wanted at Apple.

  • Doug, there was a question from the previous thread that I have been wondering about for some time. Bigway was asking about Asik & Gibson, with regards to signing them with Bird Rights. I noticed in your team salary chart, you used the MLE for both Asik & Gibson. I remember hearing Asik's deal was for 2 years, and I believe you need 3 for Bird Rights. So would they have to use the MLE to keep him? And would they then be in danger of losing him if another team outbids them, which is likely?

  • In reply to ChiRy:

    They would not need to use the MLE to keep either. I used the MLE because I expect that to be the max another team would offer that the Bulls would need to match to keep them.

  • In reply to DougThonus:

    Ok, but then how do they keep Asik if his contract ends this summer?

  • Doug, What are your thoughts on setting up a fantasy league on a site for fun for the regulars on this blog? Just a thought, it could be fun.

    Also, I may appear to be new here, but I was a regular last season under the name kayak0109, but for some reason chicagonow lost my info when the site changed so I just opened a new account recently.

  • In reply to NateTags:

    I was a massive fantasyfootball addict and promised my wife I'd quit playing fantasy sports, but I agree it would be a fun idea otherwise.

  • In reply to DougThonus:

    My wife would probably like that too ;)

  • I would say Jerry might be more inclined to allocate more resources to the Bulls, because I believe the White Sox are going to be facing some tough financial times ahead. Jerry knows better than most that Championships bring money, and a better use of his cash is with the Bulls at this point.

  • Doug...
    Is there any rule that owners like Micky Arison or Mark Cuban who make money out of a different business cannot invest that money in their NBA teams. It is one thing to buy a team but if the owners want some kind of parity, only basketball related income(merchandise selling, tv contracts, tickets etc..) should be invested on the team(signing new players, new contracts, extending contracts or paying luxury tax). Otherwise, it doesn't make much sense as a league to want parity as it looks like US Economy Vs Mexico's economy in terms of ability to spend.

  • In reply to schaumburgfan:

    No, there's no such rule, and it would be the equivalent of making a hard salary cap to create such a rule, plus it would have a greater impact on teams losing money. The nets could only invest like 40 million into payroll.

  • fb_avatar

    What about.... RUDY GAY ??? If it work out, I really think he could be the "Pippen" that Rose is waiting for, a sometimes underrated All-star material, that can help us to delivery it... much more than those that we are proposing so far. What do you think ?

  • In reply to Falcão Bauer:

    I don't think the bulls can really move Deng, so I think bringing in a pure SF wouldn't work for them.

  • Technically speaking Brewer, Korver and Watson don't have expiring deals ... however, their 12-13 contracts are not guaranteed if waived.
    Of those 3, I'd personally like to keep Brewer. He's so damn strong on the boards and defensively ...
    I'd love to have Iggy ... giving up the Charlotte draft, ours, and Korver & Watson ... Philly saves $5mm this year and roughly $30.5mm over the next 2.
    You run into trouble in 13-14 which would be the 1st year of DRose's max contract.

  • Just heard Caron Butler wants to stay in Chicago (where he has been working out). The interest appears mutual. Could he play SG?

  • In reply to ChiRy:

    I saw that same thing...could be an interesting pickup, but he'd definitely have to move to SG for it to work.

  • Caron Butler wouldn't be a bad pickup. He can score and defend. He was excellent defending Lebron James during the 2 regular season games against the Heat. Not a great three point shooter though.

  • Caron Butler wouldn't be a bad fit in my estimation. What he lacks in youth, he more than makes up for in experience. I kinda like this prospective signing.

  • Butler shoots a poor percentage from three. For a wing anymore and this Bulls team that's a big drawback. I'm still rooting for Prince on an MLE who is a two way player and a winner who albeit at 31 and Detroit's coup de tat, still scores at a very nice field goal percentage. Granted Tayshaun doesn't shoot many attempts from the 3-pt line either, but he does shoot a solid percentage. If they did get Iguodala, his slashing would help burn extended doubles by forwards on Rose including the playoffs big time.

  • In reply to RoadWarrior:

    He's not that bad - .319 for his career
    .340 2 years ago
    .431 last year

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