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?
|Richard Hamilton buyout||$1,000,000|
|Projected Luxury tax||$71,600,000|
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.