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.
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