How much tax will the Bulls stomach this season?

The Chicago Bulls will pay the luxury tax for the first time this season, but will quickly follow that up with some more luxury tax next season unless they find something awfully creative to do during the off-season. How much tax will the Bulls stomach though?

Player 2013/14 Salary
Derrick Rose $17,632,688
Carlos Boozer $15,300,000
Luol Deng $14,312,125
Joakim Noah $12,100,000
Richard Hamilton buyout $1,000,000
Kirk Hinrich $4,059,000
Taj Gibson $7,550,000
Jimmy Butler $1,174,080
Marquis Teague $1,074,720
Pick #20 $1,472,400
2nd Rounder $490,180
Min Salary $884,293
Min Salary $884,293
Min Salary $884,293
TOTALS: $78,818,072
Projected Luxury tax $71,600,000
Total Paid $90,199,698

The Bulls, if they do the minimum from here without selling out their 2013 draft pick, will already pay an actual salary of around $90 million dollars. Now I included 120% of the rookie salary scale for their first rounder, they could try and save a few hundred grand by cutting him down 200k and could also replace some min salaries with undrafted FAs to save 400k per slot.

The Bulls are above the apron and into the secondary tax level that gets to a 1.75 per dollar penalty. I've frequently said Reinsdorf is cheap, and well, I still think he'll effectively do the minimum here, but it's hard to blame him.

If the Bulls were to use the MMLE then they'd have to effectively pay that player 10 million in this next season due to the luxury tax penalties, and it's not hard to see why ownership may doubt any player at the MMLE is really adding 10 million bucks worth of impact to the team. This is especially true for Bulls who have a pretty solid roster as is.

Chicago could use another big man, but otherwise they already have a pretty solid eight man rotation. If they can get someone who can play a role out of the draft and hit on just one of their minimum salary players then they'll have another solid team.

The Bulls salary situation also means we can likely kiss Marco Belinelli and Nate Robinson goodbye. Given that the tax man's already coming for 12 million, the odds are the Bulls are looking to cut salary rather than add it. Chicago could resolve their tax problems by amnestying Carlos Boozer, but they'll be left with a gaping hole on the court.

I know Boozer's not the most popular guy on the team, nor will I convince (or try to) anyone that he's worth his 15.3 million dollars next season. That said, if the Bulls amnesty Boozer they still won't have any significant flexibility to add anyone and will then need to figure out how to fill another 30 minutes in a front court that's already short one body while just using the MLE.

The team will still pay more total money next season as they'd only save the tax money and still have to pay Boozer's salary plus the salary of the MLE player they'll need to replace him with (an exception could occur if some team bids 8 million or so on Boozer, but that seems unlikely).

In short, the Bulls are in a tough spot financially due to the new penalties. The NBA isn't in a hard cap environment, but teams going for it will really have to look into the risk/reward of doing it. One thing to note is that in the past, the early projections have frequently come in low, so I expect the tax number to rise some and provide the Bulls (and others) a little relief.

While you could argue the Bulls aren't getting much bang for their buck and management sucks, that really isn't the case. It's very difficult to put together an elite team without spending a ton of money, and Chicago is still in the top 5-6 teams in the NBA when the season starts next year while paying an appropriate amount for that squad. We simply want to be the best, and that's not easy.

So when going into this off-season don't expect the MMLE to be used, don't bother suggesting trades where the Bulls take on additional salary, and don't be shocked if there are a bunch of cost cutting moves instead. The Bulls won't be adding pieces this season outside of replacing all of last years cheap players with new cheap players and hoping that they can build enough chemistry for this season to be the year.

Filed under: Free Agency

Tags: chicago bulls, nba, salary cap

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  • Looking at the roster, we have 3 overpaid players.

    Boozer - Doubt anyone will trade for him

    Deng - He is more a 10 million player, we can possibly trade him to a team and get back a lesser quality SF and the right to swap draft pick(s)

    Gibson - I don't think he is worth this contract unless he can stay healthy and improve on his jump shot. I wouldn't be upset with a swap of gibson with Mahinmi, Mahinmi's contract is only 4 million, he should be able to play both C and PF position which is what we want.

  • In reply to handushk:

    you forgot Hinrich at 4 million--definitely overpaid. The Bulls will be looking for cost cutting trade moves, maybe using that second round pick as a sweetner to unload Boozer or Deng for a lesser player with smaller contract. It's pretty sad when we have to depend and hope on vet min players to get a significant part of our scoring. Too much money being spent on non-scorers and players that don't fit with what we need most......scoring.

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  • Rumor is Toronto called bulls again about boozer for bargnani. I say make trade. Start taj Gibson. Bargnani off the bench. FO need to take some chances. Maybe bargnani needs a change of scenary. Who knows what thibs can get out of him. I was against this trade at first but just want bulls to at least take a chance. Bulls won't have amnesty but I don't think they would ever use it anyway. Can hope bargnani have good year , he is still young and can be packaged if they can make major trade. Not sure what 2014 plan is but bulls will not get any big names anyway.

  • In reply to bullzfan:

    I think that would really hurt the Bulls. It would officially take away all our size/rebounding. I know Bargs is seven feet but he plays on the perimeter and doesn't play D at all. Couple that with you maybe get the same scoring output that Boozer gives you at around 16 a game and seems like it would be a huge mistake. I have no interest in Bargnani.

    If you want a really risky move with possible huge upside then I think Eric Gordon is the best target as he would be fairly cheap asset wise to aquire as the Pelicans just want to dump his bloated salary... His knees make me super nervous but if he is dogging it some because he hates the team, which is possible given he tried desperately to leave, then it could be a great move for the Bulls. Although if true he would be in the Vince Carter class of NBA players.

  • In reply to Chad:

    This his work against heat. bargnani was both posting, driving to basket and shooting from the outside. I saw some recent games but of choose heat because it seem like he was going toe to toe with bosh. http://m.youtube.com/watch?feature=fvwrel&v=mXm7ec9mQCg

  • In reply to bullzfan:

    Bargnani has money owed in 2014, trading bozo for him takes away the amnesty option in 2014, thus removing any significant cap room in 2014.

    As much as I want to get rid of the BozoHole, this does not seem like a prudent move for the Bulls. But if it is really on the table I would have to think real hard about it.

  • In reply to BigWay:

    I don't see who we will get in 2014 that's why I say make the trade take a chance for once. Lebron is not coming here. Who knows if bargnani plays well he may opt out. I think he has opt out option not sure though.

  • Not looking good to win a title in the Derrick Rose era with the Bulls FO history in not spending over the tax. Not many players in the league willing to take less to sign with a team unless they know they have a very good chance to get to the Finals and compete for a championship. If the Bulls are really serious about trying to compete for a championship, their gonna have to spend big and pay the luxury tax. It's not like they can't afford it since they never have paid the tax. Question is...and I'm sure Rose would like to know the answer to this question, are the Bulls willing to pay the tax for a championship contending team??? My guess would be NO!!!

  • In reply to Reese1:

    My concern is not how much they spend but how they spend it. The Bulls FO is undeniably terrible at large Free Agent acquisitions. Combined with a proclivity for overspending to retain their own players. They just don't seem to manage their cap very well.

    But I agree Regressing for the second straight offseason when they weren't exactly world beaters to begin with tells the whole story to me. If they had a plan to be serious contenders they would have made a big move last offseason but didn't. That says we want to be good as long as possible but don't care about going all in for a title run. Personally I think the Bulls FO is way over rated based soley on meaningless regular season success.

  • Great article but the Bulls with Deng's contract ending this season coming and the probably amnestying of Boozer , would that leave the Bulls 29 plus mil cap space? Or does it calculate into some other figure.

    As much as many people think that the Bulls wont use the amnesty clause I have to say they will something has to give I think the will resign Deng and amnesty Boozer to use Boozer's money to sign and impact player which could easily be Mirotic and someone else to improve the bench.

  • In reply to BullySixChicago:

    Even letting Deng and Hinrich walk and amnestitizing the BozoHole leaves us with a cap number between $45 & $50 million going into the summer of 2014. Rose, Noah and Taj are almost $40 million by themselves. Then you've got Butler, Teague, this year and next years draft picks, $5-6 million, plus 5-6 veterans minimum deals for another $4-5 million.

    That is why I keep saying that the bulls will not likely have enough cap space for a full max deal(at least not a Lebron/Dwight Howard type deal starting at over $20 Million) in the summer of 2014 unless the cap goes up a lot. It is expected to be $58.5 million this season, virtually no increase from last season.

    to have had max cap room, we would have had to let Taj walk, just like we did Asik.

    In fact, the numbers are starting to make it look like we should have just kept Asik last offseason, while bringing over Mirotic in 2014.

  • fb_avatar

    Any good draft-and-stash possibilities at the 20th pick? Not that we should do this, necessarily, but it's one way for them to save a little money.

    Also, Malcolm Thomas has an unguaranteed contract through 2014 and could be one of those minimum roster spots.

  • I think the Bulls should just trade Deng for cap space & a pick, amnesty Boozer, and sign Josh Smith. Then sign a cheap 2-guard (Mayo, Gary Neal, Beli, JJ Redick)

  • Thanks for putting the real numbers on the table. I've been saying pretty much the same thing for a year now. The Bulls have no moves to make because they are already a significant tax payer.

    The best we could hope for is a one year MMLE guy, but as you said that would cost us nearly triple the cash value of the contract.

    The only quibble I have is that the MMLE guy would cost about $8.25 million($3 x 1.75) not $10 million, probably not enough of a difference to make a difference in the bulls calculus.

    Also, while I don't believe that they will amnestitize the BozoHole this summer, there are clearly major financial benefits to doing so.

    Also, I think that your amnesty calcs are a bit off. First, don't we get back any money that the BozoHole signs for, not just the money over a certain amount.

    Second, they get to pay him off over 4 years, for an annual cost of $8 million per($32 million/4 years), so they save $7.3 million cash this season($8.8 million next), which would more than pay for the full MLE guy to replace him. Secondly, getting Bozo off the cap gets us under the tax by nearly $8 million, which leaves us under the tax even after signing a full MLE, thus saving us another $12 million in tax payments.

    So amnestitizing Bozo this summer saves about $15 million in cash this year and gets you out of the reapeater tax which the Bulls could owe in 2014-15 if they are in the tax for next season. The savings would likely be closer to $20 million if the Bozo signs for even $5 million per.

    Clearly, Belli and Nate are gone. The only hope for a major move is a Deng trade and/or a BozoHole amnesty.

    I would like the Bulls to go after bigs like Elton Brand for the vet minimum and to see what Samuel Dalembert can be had for on a one year deal.

    To me the Bulls would be a better team overall with Taj, Brand and Dalembert than they are with the BozoHole wasting 30 minutes a night.

    Overall, you offered a sobering dose of reality and truth telling, not fanatsy basketball trades.

  • In reply to BigWay:

    You could amnesty Boozer this year and give Nate/Beli the MLE, which allows you to then take RIP ($5M-Unguaranteed/Expiring), Kirk ($4M-Expiring), Deng, $1M and our 2nd rounder (#50 overall) for Pau Gasol. That's completely reasonable as they would get a younger, better version of Artest in Lu Deng, they could keep RIP or buy him out with the $1M we send, and they get a competent PG, who can play D in the PG heavy Western Conf and he can spell Nash or play with him. Neither team would have any commitments beyond next season as a result of this trade. We would then have the following salary commitments:

    Player 2013/14 Salary
    Derrick Rose $17,632,688
    Pau Gasol $19,285,850
    Joakim Noah $12,100,000
    Taj Gibson $7,550,000
    Nate Robinson $2,000,000
    Marco Belinelli $2,000,000
    Jimmy Butler $1,174,080
    Marquis Teague $1,074,720
    Pick #20 $1,472,400
    Malcom Thomas $884,293
    Min Salary $884,293
    Min Salary $884,293
    Min Salary $884,293
    TOTALS: $67,826,910

    That team could contend for a title next season and leave us with flexibility for the summer of 2014. Sadly this will not happen, ever, so I will get back to work now.

  • In reply to nolebron:

    Don't think the Lakers are giving up Gasol with Howard more than likely leaving. And that's too much to give up for a player that has maybe a couple more years left.

  • In reply to Reese1:

    How is that too much to give up? Deng, maybe, but talk about only having a couple of years left. Hinrich? RIP? Also, this is the final year of Gasol's deal, his numbers have suffered under D'Antoni, this trade would definitely benefit both sides. Without Kobe and Dwight (if he leaves), the Lakers aren't going anywhere anyway in a stacked Western Conference.

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  • Why attribute all the tax penalties on the last player that is signed?

    I've always found this funny. Teams get into the tax penalty because of the overall payroll, not just with the last player signed.

    If you want to assign someone the blame for the tax penalties, lets blame it on Boozer and say we need to amnesty him because he's not worth $25mil (or whatever the multiplier is for the tax penalty).

  • In reply to YouBlewwIt:

    just like you do with taxes, you do an analysis of the marginal cost of doing something. However, I am a big fan of blaming all the tax payments on boozer.

  • How many throw away teams are there in the NBA right now? Milwaukee, Washington, Charlotte, Toronto, Minnesota; all pathetic franchises with decades of non-contention.

    Young undeveloped players with no college experience and AAU show ball. The league IMO sucks. Contraction and jettisoning unprofitable teams should have been the answer if fan entertainment and a nightly quality product was the ultimate goal. Instead, NBA fans are shackled with a draconian tax that no fan wants.

    The Bulls, outside of Chicago people would like to see a shake-up. Rose and Thibs have masked an offensively weak team. They should have jettisoned .426 from the field $14 Million Deng when they had the chance. I'd rather have Damian Lillard and Rose at SG any day. It would be an entertaining dynamic scoring team with no worse odds of winning then injury ridden Deng.

    The Bulls will have to trade Deng's contract for a now mid first round pick and take on a two year bad contract they will try to dump. They won't amnesty Boozer at 15 ppg and a respectable efficiency from the field including in the playoffs.

    Derrick at SG would have no PG pick and rolls to deal with and no predictable walk up court into extended double teams. And Joakim shot .426 and .411 in two of the last three playoffs. I wouldn't be averse to trading an injury prone player and taking a chance on young scoring talent.

    Of course die hard, no life(kidding - to some extent) Bulls fans who continue watching them nightly will be averse to most of these moves. And so the Deng, Noah, Taj, Kirk core of shackling inflated salaries will continue to strangle any hopes of acquiring an infusion of offensive talent this team needs.

    But, there is no frustration here because I have no expectations of the misguided profit driven fan unfriendly league the NBA has become. And the Bulls in Gar/Pax will stick with attachments to mediocre overpaid players with a unentertaining suck offense. And nobody outside of Chicago will give a crap.

  • In reply to RoadWarrior:

    Gar/Pax are the guys you want if all you seek is to be good. They are too limited to ever be great. This is why it irks me when people say GarPax are good GMs... Sure if you don't care about entertaining basketball or you know winning a championship. If you want a team chuck full of defensive grinders with limited athletisicm then they are the best.

    The fact that they are totally inept at big ticket free agents, Terrible at getting value when resigning players, scared shitless of making a bold move and can't recruit to save their lives, just proves they are your prototypical A to B guys. They will get you a good team but you need a guy with some balls and financial smarts to get you that great team. Can't afford to continue to overspend on mediocre starters anymore.

    That said Derrick Rose single handedly saved Paxsons career and he is going to repay him by pissing away his prime. Paxson is WAY overrated as a GM. He is the Loul Deng of GMs...

  • Do the Bulls have a history of attracting superstar caliber talent? It's hard to foresee, outside of the lottery, how the Bulls get a player of DRose's caliber again given their reputation in the league. You can never make a financial argument for why it's okay for management to save their dollars during the prime of your superstar's career. It's only okay if you're fine having top three seeds and losing two or three rounds into the playoffs every year.

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