How a potential 2011 lockout affects the Nuggets
by TChizza on Oct 22, 2010 9:38 AM MDT
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PrintThe harder NBA owners play hardball with the players association, the better off the Nuggets might be.
First off, the article by Chris Sheridan from ESPN.com...
http://sports.espn.go.com/nba/columns/story?columnist=sheridan_chris&page=lockout-102110
For me, the two main passages are...
If you look at an imaginary NBA growth chart that begins in 1999 -- when the last lockout ended -- and carries out 20 to 25 years, which is when LeBron James, Kevin Durant and their ilk likely will be nearing retirement, that chart continues to go up and up and up in terms of popularity, especially as it relates to the younger demographic that has tuned out baseball and embraced basketball. (And that's just domestically. The equation gets much larger when you factor in the global markets the league has cultivated so determinedly for the past decade.)
Most people expect the National Football League to be going through its own labor war a year from now. And if there is no NFL next October, there are going to be an awful lot of idle sports fans, many in the demographic Stern is trying so hard to appeal to, sitting around looking for something to fill the void.
While nobody, including Sheridan, is calling a settlement any sort of slam dunk, I think these are two very astute points by Sheridan (among others in his article). For whatever people think about the NBA or how it's run, I think there's very little debate in the fact that Commissioner David Stern has been and has continued to be an incredible commissioner. Even though he represents the owners, he's always done a fabulous job of promoting the sport with foresight and kept it popular and relevant during a time where the NFL juggernaut has overshadowed and overtaken the sports scene in America. This doesn't even count the immense strides its made overseas which can't be overlooked.
I just can't see him allowing all the goodwill that's been built up over the last several years (that coincided with this latest wave of generational-type players) to be flushed down the toilet by a prolonged lockout. And the second quote I have above might very well be a critical opportunity for the league to take precedence over the NFL, simply because football might not be being played. You can bet Bud Selig is slobbering all over himself thinking about a full fall season where there's no NBA or NFL. I can't see Stern allowing that to happen.
Now, what does this mean for the Nuggets? Well... potentially a lot. The Nuggets leverage over Carmelo Anthony is almost completely tied to the new collective bargaining agreement (CBA). If the new CBA is similar to this one, Melo's potential "lost" salary from just up and leaving the Nuggets would be much less drastic than everyone has painted. Instead of possibly losing anywhere from $20-30M over the next 4 seasons, he might only be losing $10M. If he does move to New York, you can bet there would be an uptick in endorsements to help offset the $10M, I'd guess he could pick up another $5M over the four years without too much difficulty. So really, he'd only be "losing" ~$5M during the four years, or about ~5-6% of his income. Honestly, if he truly wants to go to New York, that's not a very hard pill to swallow.
Also, any package the Nuggets do receive if we trade Carmelo Anthony will likely have multiple draft picks and the ones we receive in 2011 would have a lot more value if a lockout wasn't pending as underclassmen wouldn't be as scared to declare. However, the value of the 2011 draft picks is inversely related to how much leverage we have on Melo.
In addition, if there is no hard cap, which I don't believe there will be, the Nuggets future financial shape doesn't look as pretty in regards to signing good players. The idea is the Nuggets could potentially shed ~$62M from its current $82M payroll (leaving us with just $20M in guaranteed contracts next year) if we let Kenyon Martin and J.R. Smith expire, Nene opts out, we buyout Chauncey Billups, let Melo walk, and jettison the rest of the riffraff on the roster (Anthony Carter, Shelden Williams, etc). The hard cap would force difficult decisions on other teams which would then allow us to sign them with our new found money. If there is no hard cap though, teams that would otherwise have a hard time conforming to a hard cap would have the flexibility (mainly through "Bird Rights") to sign their key players.
Basically what it boils down to is the harder the line the owners take in the upcoming few months, the better off the Nuggets are. It continues to give us maximum leverage over Melo (either in telling him he's accepting a trade to XYZ team or eat the lost income, or we force him to sign it or eat the lost income) and puts us in a position to possibly trade for players that teams would cut loose if there was a hard cap but would sign otherwise. It's definitely something we should keep a very close eye on, especially for as long as Melo keeps wearing a Nuggets jersey this fall and winter.
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Interesting Read...T.
One thing that concerns me about Melo wanting to go to the Knicks, is I figure the potential “lost” money to Melo is less of an issue.
Don’t know the rules etc. but I assume the Knicks could “assure” Melo they’ll take care of him.
I don't think he cares about money
I think it’s noteriety. In this ever changing world, the desire to be SEEN and KNOWN is far more valuable to these guys than even money. Besides, doesn’t melo have a shoe-line and a production company?
Trust me. It’s not money. It’s exposure. And his mind is made up.
by Raugesen on Oct 22, 2010 12:00 PM MDT via mobile up reply actions
+1
One other thing. Going to New York means winning is incidental to Melo.
by Artimus Mangilord on Oct 22, 2010 12:04 PM MDT up reply actions
Stern has said he wants to cut player salaries by a third
Think about it. Melo makes 16 a year. If Stern gets what he wants, Melo could see up to 6.5mil a year gone from his contract (assuming an 18m/yr/max) or even more than that. Over the life of say, a five year contract, you’re looking at ~32.5 million gone.
If Melo thinks he can really make up the money in endorsements in these shitty economic times, good luck, see ya later, and enjoy being a shoe salesman in New York. We’ll take our young projects and picks and bide our time for the next few years.
Stern’s hard line has got to have rattled more than a few players in the Melo sweepstakes, including Melo himself.
Swats.
I thought we weren't listening to this guys because he's a liar?
Great post, and great article even though we all know Sheridan has zero credibility just like every other scum bag sports journalist out there. Sarcasm aside, I think you made a few good points…
- I totally agree about Stern. Say what you want about him, but since becoming a fan of the NBA I’ve witnessed nothing about his regim that has repulsed me in any way. His marketing of the game globally and perception of it’s players has been spot on, especially when the league has faced precarous situations.
- I thought the bit about the NFL was very interesting. In my opinion the NFL is taking some serious hits right now. The player conduct is as bad as it’s ever been (dudes are even wearing sweatpants to clubs believe it or not), steroids seem to be making it past the drug-screening and the latest thing about the propor way to blow sombody up has everyone up in arms. To top it all of America’s team is 1-4 in the year they were supposed to make it to the Superbowl that they are hosting! I totally agree with Sheridan that Stern recognizes these issues and the opportunity to capitolize on the largest market there is, the American footbal fan. No way Stern misses this one.
- Beefy just posted this above, but I’ll mention it anyways and spin my thoughts on it. Stern already said he wants player salaries to decrease about one third, which is exactly what I suggested in the post I made regarding the Knicks rumors. If this comes to fruition Melo is going to lose out on tens of millions by just walking. Thing is, he’s not that stupid. These comments by Stern almost feel like they were stricly released for the Nuggets benifit only. This basically ensures we get consolation in return for Melo because he will have to do sign-and-trade, unelss of course he gets second thoughts about leaving in the first place. I highly doubt that is going to be the case, but it’s certainly a possibility.
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
Are you guys KIDDING?!!
Stern is the REASON all of this LeBron, Bosh, Melo madness is occuring!!! Because of the shitty system Stern has in place, three players were allowed to screw the ENTIRE LEAGUE and it’s fans out of parity! The reason the NFL is Americas most popular sport is because there is some mystery as to who will win the championship…ask yourselves this: if the new CBA puts in all of these “new restrictions” on player contracts, where do you think players will want to be…THE BIG MARKETS!
It’s Sterns ridiculous free angency system that has destroyed any semblence of parity.
So, yeah, good for you Stern, for putting your foot down and finally renegotiating the CBA…that YOU f’ed up in the first place…
In my opinion, he is a terrible business man…much like Selig. Baseball isn’t Americas pastime anymore because like Stern he’s alienated 70% of the countrys fans because he’s thrown the smaller markets under the bus…
by Raugesen on Oct 22, 2010 12:09 PM MDT via mobile up reply actions 1 recs
I agree with you, but for some different reasons:
All Stern cares about is money. His dream finals of Lakers v. Lakers has nothing to do with a quality product on the court and everything to do about making coin. Same thing for expanding marketing on a global scale.
Taking that into consideration, and then looking back at how much talk there’s been of draft lotteries being rigged (Ewing to NY is the best example), how shady/biased (and non-transparent) the officiating has been during his tenure, I don’t see how you can say Stern has been an excellent commissioner.
Yeah, he’s grown the game, but it’s been at the cost of an increasingly diluted, ego-centric, non team-oriented game. Theres a reason that a lot of basketball fans don’t watch the NBA. Me? I can’t help myself but be a fan of all home teams, and I’ve been with the Nuggets from the days of Moe, but it’s getting harder and harder to ignore all the crap the NBA not only allows, but promotes.
by blooming rock on Oct 22, 2010 12:28 PM MDT up reply actions 2 recs
+1
For Stern, the integrity of the game takes a backseat. If so, he would address the lack of referee depth, elderly refs, preferential treatment, infallibility of refs, etc.
by Artimus Mangilord on Oct 22, 2010 1:03 PM MDT up reply actions
Well said
I always look at Stern and think what he’s doing is akin to these wall street, big business guys who are out to make a quick buck and screw the future deals…
I too, have been a fan since the Moe years…and you couldn’t have put it better “..it’s getting hard to ignore…”
by Raugesen on Oct 22, 2010 2:30 PM MDT via mobile up reply actions
Exactly what I was going to say(but you expressed it better than I could have)
Stern has achieved the goal of making the NBA more valuable financially but by doing so has completely ruined the league for basketball purists. Every commissioner hopes for their big attractions to make it the furthest, no denying that, but Stern actually has influenced the games to make it happen instead of sitting in his office and crossing his fingers. Thereby he has ruined the integrity and in many ways credibility of the league. The individual focus of NBA players over team focus(except biggest names like Boston, LAL) has become so nauseating and one-sided.
DISCLAIMER: Fairly unintelligent, usually unknowledgeable, gullible fool speaking. My views do not necessarily represent those in charge of this blog or most of the known universe. Stride with caution
Quitter's People United member # 42
Totally agree
On everything you said for the most part. But lets face it, the NBA has been the third most popular sport in America for a while now, and since Stern has taken over it’s slowly gained on the MLB, and by the end of his tenure it might surpass it. That’s an incredible achievment considering the history behind baseball, so I really admire that about Stern. Is the NBA perfect? Not at all, but every sport has it’s problems.
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
by GoldenNugget on Oct 22, 2010 5:13 PM MDT up reply actions
On parity
Parity is not the reason football is America’s favorite sport. The big market teams like the Patrios and Steelers still have won 7 of the last 10 Superbowls or something like that so no it’s not as drastic as you think. The NBA is a different game than the NFL, star power rules over most everything, but that’s just the way the sports is. Plus, parity is overrated. Yeah, it’s nice to have and I would prefer it, but this upcoming season is going to be one of the most popular the NBA has ever had and parity is not part of the equation. Maybe Stern isn’t the most concerned about parity, but it’s not like he’s ruined the game of basketball. What people seem to foget is that what happened this offseason was a FREAK aberration!
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
by GoldenNugget on Oct 22, 2010 5:03 PM MDT up reply actions
Hello
Pittsburgh? Big market? what?
Prior to implementing the cap, Washington, NY, San Fran, and Dallas won every year for 14 or so years, each winning multiple titles. Since then, Pittsburg, Denver, and New England have won more than one, with all the other titles going to different teams. Every teams fans know that their team can compete for a title if they build the team properly. In the NBA, that is not true. You can only contend for a title if the owner is willing to lose massive amounts of money, and now apparently, be in a major market where the players can party sufficiently. If they don’t correct this soon, basketball will go the way of baseball.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 23, 2010 9:49 AM MDT up reply actions
Why do people keep using baseball as a reference of non-parity?
In the last 21 years, there’s been 15 different winners (Yankees, Red Sox, and the mighty Marlins are the only multiple winners). If the Giants win today, you can make that 16 out of 22 (72%). Football has had 10 different winners in 13 years (77%). There’s been 25 different teams in those 22 years in the World Series (57%). There’s been 16 different teams in the 13 years of the Super Bowl (62%). In other words, as far as “parity” is concerned, baseball is about equivalent as the NFL. People only think there’s no parity in baseball because there’s no salary cap. The last 22 years of data have shown this to be completely false.
But wait you say! The Yankees make the playoffs every year! Actually, the team with the most consecutive playoff appearances between the NFL and MLB right now is the mighty market known as the Indianapolis Colts with 8. If you want throw in the NBA, the Spurs are at 13, Dallas at 10, and surprise, the Nuggets are at 7, all with longer streaks than any MLB teams (and a couple more). But the teams with the highest salaries always make the playoffs! 2 of the 9 teams that had over $100M payrolls made the playoffs this year (Yankees and Phillies). Last year, 4 of the top 9 teams in payroll made the playoffs. Money guarantees you nothing.
Yes, the NBA and MLB have very different dynamics in terms of what salaries means and what it can do (mainly farm systems, rosters sizes, rookie-scale + arbitration, and various other mechanisms). However, please stop using baseball as a reference of non-parity just because there’s no hard cap. It’s pretty obvious after you actually look at the data instead of going with what you’ve been told that parity in baseball isn’t a problem.
good points
I stand corrected on baseball and parity.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 23, 2010 1:46 PM MDT up reply actions
Holy Hell
great info! There is definitely a lot of parity in baseball. Sure the Yankees will always be good but as you point out, them winning it all is actually rare these days. The NHL probably has the best parity in big American pro sports. Obviously no league can reach perfect parity but most actually have mystery to whom wins. The NBA has become like the major European soccer leagues, always the same teams(because salaries are at a HUGE discrepancy).
"We like to do the things that nobody else has the courage to do. If you copy some else, you're always one step behind. We like to be one step ahead."
-Angelo Zomegnan
Quitter's People United member # 42
The lack of parity in the NBA is partially due to salary
but the biggest issue is minutes, and by extension, what percentage of minutes a player plays.
In a NBA game, a team only has 240 minutes total (5 players on the court at any given time x 48 minutes). If you have an elite superstar player playing 40 of those minutes, that’s 16.7% of the total amount of minutes. And he plays on both offense and defense.
In the NFL, there’s 660 minutes (60 minutes x 11 players). There’s also offense and defense. Assuming your offense is on the field for half the time and even if you have a HOF QB, he only plays about 4.5% of the minutes. NHL is similar except with the major exception of goalies. Same with baseball and their major exception is the starting pitcher. It’s why hot goalies can carry their teams through entire playoff runs and why a dominant 1-2 starting combo in baseball can do the same.
Point being, the more minutes or time in game you give to your best players, the better your team, obviously. Since NBA teams only have five players on the court at any given time, the chance of 1 or 2 players making a major difference are much higher. Just like how goalie or a SP can make a world of difference in their respective sports. More time playing = more ability to impact the game.
There will never be parity in the NBA for the simple fact there aren’t enough superstars to allocate to each team. And since superstars can play such a high percentage of their teams minutes compared to other sports, they will always be the single driving factor in the game, short of the NBA playing 10 vs. 10.
I’m not saying a hard cap wouldn’t “help” with parity, simply because you begin limiting the quantity and quality of supporting players. However, in a game where there’s only so many minutes and a single player can play a good share of those minutes, the league will always be top-heavy. It’s just the nature of the beast.
+1
Parity will never exist in basketball because the game is 5 on 5 and the team with the best player that does a good job surounding them with complimentary players will win most of the time.
I also get tired of people mocking baseball and their system of no salary cap. You don’t need one in baseball and their is plenty of evidence of that. Basketball would be fine if teams could keep their superstars and if the attraction of the bright lights in the big cities wasn’t so great. The NBA just needs to make 6 year deals available to guys that have played 3 or more years with a team and only 2 year deals available for players that want to leave. It would solve the problem and may eliminate some of the inadequacies of guaranteed contracts in the NBA.
Good points, but you’re ignoring the fact that 16 teams make the playoffs in basketball. The playoff field in basketball is huge. If a baseball team makes the playoffs 4 out of 5 years, it’s usually a pretty dominant team. In comparison, Jerry Sloan has only missed 3 playoffs in the last two decades, even though his teams have rarely been dominant. Being the 8th best team in the NL gets you a one way ticket to your offseason.
by Uwe Blog on Oct 23, 2010 7:59 PM MDT via mobile up reply actions 1 recs
The CBA situation is extremely complicated.
the Nuggets have a long term strategy (via Stan) that is tied directly to limiting player salaries (ala NHL) and creating an economic model similar to that of the NHL. Kroenke was one of the leading advocates for player salary reduction and a hard cap in 2004 when the NHL was locked out.
Two things counteract that. The NBA is at a high in popularity (the Finals was the highest rated in years) and their TV contract far exceeds that of the NHL at any point. Even with the hard cap, the NHL is leaking money because they are buried on Versus and the occasional NBC game. The NBA can make no such claim.
The Melo situation is much more complicated than has been in the news. There are a ton of moving parts, posturing, and the like that have hampered things the last three months that have nothing to do with Melo’s reported “desire to play elsewhere”. Moreover, the resolution of the CBA doesn’t really hinder OR help the Nuggets rebuild. Nor will it prevent them from rebuilding.
The NBA has fudged some of the numbers a bit. Their reduction in salaries by 1/3 would take a reported $350 million loss to a $350 million profit. Which doesn’t make the greatest of sense. Check out this Fanhouse article
http://nba.fanhouse.com/2010/10/21/david-stern-nba-owners-pushing-to-cut-players-salaries-by-a-th/
It’s all part of the game. Where it comes to Melo…it’s more complicated than just signing an extension. The CBA makes that complication even more complicated.
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 12:40 AM MDT reply actions
good points
But re. the ratings for last season’s Finals, well, does that have something to do with the fact that a Lakers-Celtics series appeals to a lot of people who don’t really like basketball or the NBA very much? If Stern’s greatest nightmare were to come true next June, and the Lakers aren’t in the Finals, then how will the ratings be?
by ParkHillNative on Oct 22, 2010 11:02 AM MDT up reply actions
Part of Stern's issue is Stern himself
He is the one who created the star system in the NBA, not the players. It came to bite him in the ass with the Lebron/Bosh/Wade situation. However….I don’t think it’s all Stern who wants things to change. I think smaller market owners and mid market owners (Denver is a mid market….San Antonio is a small market) are pushing this because they claim they lose money in the current system.
The hard cap hasn’t prevented the NHL from losing money. Just to let everyone know. It stopped the torrential bleeding of money….but almost every NHL team loses money. That has nothing to do with player salaries.
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 11:20 AM MDT up reply actions
Given what the owners did this summer . . .
I think it will be hard to convince the world and the players that they are losing a ton of money . When Al Harrington, Travis Outlaw, Darko Milivic, Hakkim Warrick, et all get 40M plus it is hard to feel sorry for the owners crying poor house.
I am not sure what the non-NBA revenues (i.e. what is excluded in the calc) for example how much does Altitude make on Nuggets games that are not reported as Nug revenues, but I foresee that this could be a tough neg between the players and the owners. Stern appears to be staring at a pretty hard line, more so than in year’s past.
I understand your point, but get the facts right:
Al Harrington: 5 yrs, 33 mil
Travis Outlaw: 5 yrs, 35 mil
Darko Milicic: 4 yrs, 20 mil
Hakim Warrick: 4 yrs, 18 mil
None of the guys you mentioned received 40 mil contracts . . . and for most of them, including Harrington, the last couple years are NOT fully guaranteed.
by blooming rock on Oct 22, 2010 12:35 PM MDT up reply actions
Right . . .didn't look up the numbers . . .pt still stands that
this off season of the “great recession” the oweners didn’t do themselves any favors.
35M for Wes Mathews; 80M+ for Rudy Gay . . 100M for Amare, another 80M for Boozer etc. My guess is this year was pretty close to the top for total $ committed.
GREAT STUFF, TCHIZZA!
Andrew Feinstein | DenverStiffs.com | denverstiffs@gmail.com
by Andrew Feinstein on Oct 22, 2010 7:44 AM MDT reply actions
good write up
I’m proud of you for getting featured on the front page
Good write up
You are right on on the contract numbers. Leaving via Free agency would cost Melo $10 million under the current CBA. There are realistic scenarios where his guaranteed salary under the new cba (assuming some pay reduction and a 3 year guarantee limit) could be more than $30 million less than if he signs the extension.
I follow the NFL closely, and I think the chances of a lockout are very, very low. If the owners attempt a lockout, the players will decertify the union and sue them under anti-trust law. Several of the teams have already approved decertification in the event of a lockout. The season would then be played while the lawsuit progresses. Fear of what would happen in the lawsuit appears to be motivating the owners to get a deal done without attempting a lockout. They are already exchanging proposals, and there has been on the record optimism that they will get something done prior to the end of the league year. The NFL also isn’t looking for anywhere near the drastic changes it appears NBA owners are asking for. So I think the deal gets done in the NFL.
The NBA is much more likely to attempt a lockout, but the NBA players could also decertify, so we’ll have NBA games unless the union decides it would rather be locked out than play one season on terms they don’t like.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 10:34 AM MDT reply actions
Am I the only one who wants a hard cap in the NBA?
A soft cap is what has caused the class distinction in the NBA. It has allowed the deep pocket teams (LA, Boston, Miami, Dallas) to stock-pile talent and stay relevant, assuming they don’t have Isiah Thomas running the organization (Sorry New York).
As much as OK City is fun to watch, they aren’t going to be able to keep all those guys there for 7-10 years. Denver is faced with a similar reality assuming Carmelo does leave for “greener” pastures.
I love a hard cap
and I think several others on here want one too. I think a hard cap may be more palatable to the players than a reduction in maximum salaries. A hard cap gives the owners a fixed budget they can plan around and still allows the individual player to get a large contract if someone is willing to give it to him.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 11:31 AM MDT up reply actions
I agree
NBA fans are going to watch the NBA no matter what, but Stern is constantly trying to attract a new audience, and the best way to do that: Lakers vs Celtics. Those types of epic Finals matchups and “superteams” with many star players is what the NBA has always been about. Without that it’s a totally different ball game, and the hard cap would be the first step in a new direction. It’s risky, bottom line.
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
by GoldenNugget on Oct 22, 2010 11:39 AM MDT up reply actions
Not necessarily
David Stern is a toolbag. If he wants Lakers/Celtics every year and then talk about expanding overseas, he can’t have it both ways.
If you want to compare to the NFL which has employed a hard cap and revenue sharing for nearly 2 decades. I doubt the small market New Orleans Saints winning the Super Bowl against the small market Indianapolis Colts affected ratings and revenue very much because it wasn’t Dallas and Pittsburgh.
I would love a hard cap as well.
In a related/unrelated subject, I feel the soft cap “luxury tax” has caused many of the same problems in baseball, to a greater extent, even tahn basketball.
by blooming rock on Oct 22, 2010 12:38 PM MDT up reply actions
I love the idea of a hard cap, but...
There’s no way the NBA is going to impose a hard cap that forces Miami to get rid of one of the Big 3, or other big-market teams to gut their rosters right away. If they do a hard cap, either there will be a long grace period, or some type of grandfathering clause, or it will be well above what the current soft cap number is ($58M if I remember correctly). My point is that it might not help the Nuggets in the short term as much as some might think it would.
by afanfromafar on Oct 22, 2010 3:43 PM MDT up reply actions
Something else I don't see anyone metioning about New York
Is that people who live in NYC or work in NYC, not sure which, pay something like 12.5% tax on their income. Add to that the Federal tax of 35% on high income earners and the 7.65% social security and Melo will be giving up over half of everything he makes to taxes.
In Colorado Melo pays 4.63% state tax, 7.65% social security, and the mandatory 35% federal tax. It adds up to roughly 47% of his income.
If you look at how bad it could be for Melo the difference could add up to closer to 40 million dollars by not taking the extension the Nugs are offering. Anyone who says Melo and LaLa will make up $40 million just by being in New York against the tougher Eastern Conference is stoned. It seems to me that Melo moving to New York would be a terrible financial and basketball decision. Is it really that important to Melo’s happiness that he live in New York? The more I look at this shit the more all of it seems to be some sort of media contrived conspiracy.
taxes
I’m a CPA and you are overstating how much tax Melo pays. He stops paying social security after the first $106,800. So his effective rate for social security is very small relative to his income. He pays roughly .0005 of his basketball income for social security. Less than that when you factor in other income he earns.
The 35% tax is a marginal rate, he pays lower rates than that on his first roughly $340,000 of income, but most of his income is in the 35% bracket.
The New York state income tax is about 6.8% and only applies to the games he plays in New York. The games he plays on the road are taxed by the states he plays in. He would pay the New York City tax of 3.6% if he lives in the city, but he can easily avoid that tax altogether.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 11:49 AM MDT up reply actions
Plus they have a high sales tax too don't they?
For the purposes of my comparison Social Security doesn’t really matter but thank you for the correction. I thought the effective tax rate for citizens of NYC was something like 12.5 % but I realize now after looking that it is something like 8.3% in Denver. Still when you talk about 80 million dollars 4.2% is a ridiculous number. Take another 4.2% off of his 33% he could be losing and the results of Melo not signing the extension in Denver are ridiculous as well.
I respect that you're a CPA
But if he makes NY his full time residence, he’ll pay their state income tax ALL of the time, in addition to any taxes individual states levy depending on game location, yes? That was my understanding of how high earners such as athletes are dinged by states like Cali and NY.
by Artimus Mangilord on Oct 22, 2010 11:58 AM MDT up reply actions
Not sure
Most states don’t tax you on income earned in other states, or they do tax you but give you a credit for tax you pay to the other states. I haven’t done a return with this scenario in New York, but the guidance says you reduce NY state withholding by the amount of withholding paid to other states, so I think they don’t get double taxed. I’m not 100% certain.
The multistate deal always sucks. I friend of mine moved from Vermont to Virginia. In Virginia he got a job, and his Vermont employer paid him as a consultant a couple of thousand dollars. The move to Virginia fouled up the system so Vermont thought he earned all his income in their state. They sent him a giant bill with penalties and interest for tax on his full income. Scared the crap out of him, but they got it straightened out.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 12:44 PM MDT up reply actions
That could be
When Sammy Sosa was with the Cubs, he sued the state of Illinois for double taxation and lost. Illinois applied the state income tax to his entire income, ignoring the taxes he paid to other states for games played as a visitor. Sosa lost his case and, while the judge acknowledged he was being taxed twice, the judge made the claim that Sosa should have sued the other states for credits, not his effective home state of IL. I doubt that’s the legal precedent, but I just can’t imagine NY would issue a credit at their own expense to benefit other states. I guess we’ll find out. Thanks for the thoughtful reply. The notion of multi-state taxes makes my brain hurt.
by Artimus Mangilord on Oct 22, 2010 1:10 PM MDT up reply actions
I encourage everyone here to read this blog post by Adrian Dater of the DP
about the hard cap in the NHL….and how both players and owners aren’t exactly happy with it. In fact, this may lead to another work stoppage in 2012.
http://blogs.denverpost.com/avs/2010/07/19/is-it-too-soon-to-worry-about-another-nhl-lockout/4065/
It’s waaaay too long for me to sum up but it’s a great article on the state of the Hard Cap
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 11:58 AM MDT reply actions
Chris Dempsey does some pretty good reporting here on what losing Melo will mean financially
Thus why the Nuggets are reluctant to trade right now.
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 12:05 PM MDT reply actions
I mean....it's ONE reason the Nuggets are reluctant to trade right now
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 12:06 PM MDT up reply actions
Which is also why...
they need to secure one player that can bring some excitement,
even in 18 seconds.
Good points
But one he misses is fan uncertainty. If Melo is going to be dealt, I’m not particularly interested in paying for a ticket to root for a team that is about to be blown up. It’s hard to get excited and pay money for a team I think could be turned into a lottery team partway through the season. I’m in Denver about once a week, and if there is a game that day, I’ll go. I’m less likely to do that this season until the situation is resolved. Either they trade him and I root for the lottery team and watch the new players develop, or they make a convincing statement that they aren’t trading him this season.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 12:54 PM MDT up reply actions
I think that statement has, more or less, been made.
The Nuggets have determined that any offer made to Anthony will still be good by the trade deadline, and they’ve also determined that they’ve offered more (and perhaps FAR more) than any deal Carmelo could land in free agency following the season.
Despite what’s being reported by the national media, Denver maintains leverage with a sign-and-trade scenario that was never possible in Cleveland and Toronto this past offseason. When the Nuggets decide to hang on to Anthony this season, it will be his only viable option.
Then, when the Knicks STILL don’t make the playoffs with Stoudemire and Felton, we can get back Randolph and Gallinari, whatever 1st Round pick they said they could obtain, AND the Knicks’ 2011 lottery pick. And that’s a deal worth considering.
Was just reading some of Tomasson's tweets
http://twitter.com/christomasson
David Stern says "franchise player’’ designation will be discussed in NBA negotiating. NFL, of course, has it.
This phrase all but guarantees a lockout next year if the players union doesn’t de-certify
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
decertification
What do you think the odds are that they don’t decertify? Not doing it is essentially going on strike, but in a way that the blame goes on the owners. If they decertify, they have to play under the terms of the last offer made by the owners to the players, so how bad would the offer have to be? If the offer is a 30% cut in salaries, would they play the season and let the courts sort it out, or refuse to play?
One factor is that a lot of these guys spend money like water and may not be able to afford going on strike. I won’t be surprised at all to read the “Lebron James is bankrupt” story in 15 years, instead of the “Lebron James is buying a team” story like with Jordan. Too many sycophants around him.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 3:48 PM MDT up reply actions
The NFLPA has used the threat of de-certification very well
They have essentially forced the owners to be a bit more pragmatic in their demands and both sides have incentive to solve the issue before it gets out of hand.
The NBAPA hasn’t indicated they will de-certify and sue. It’s a risk. In 1989 the NFL players union de-certified and sued the NFL for anti trust violations and won Free Agency in the “Reggie White” case. They re-certified in 1993 and are claiming the right again de-certify if they feel the NFL is again violating their anti-trust exemption by locking out players.
I’m not sure the NBA will take such a measure. The players have drawn a line in the sand on a Hard Cap and Franchise tag. NFL players hate it. The NBA players hate the concept. It’s gonna get messy.
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 10:13 PM MDT up reply actions
Stan K. will want to be fiscally responsible if possible
Which will likely mean a lottery team is on the way in. I guess I’m ok with that as the Nuggets have long been the underdog team to root for. Plus we could be good again in several years…
by InboundingLobPass on Oct 22, 2010 4:01 PM MDT via mobile reply actions
"could" is the word
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 10:13 PM MDT up reply actions
Dajuan Blair
is officially the starting center in Utah. I had never heard of him, but a lot of the people on here wanted the Nuggets to draft him in the second round last year. Yes, he has the knee issues, but how good would this team look with him at center? Would they have made it out of the first round of the playoffs last season? Would Melo be happy and signing an extension? UUGGHH.
Formerly KS and CS
by ThrowItDownBigManThrowItDown on Oct 22, 2010 4:45 PM MDT reply actions
Really?
Wow, that’s insane. I figured for sure it would be Splitter. Definatly goes to show that the kid had mad talent, and that NBA GMs across the league are not as smart as we think.
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
by GoldenNugget on Oct 22, 2010 5:20 PM MDT up reply actions
well i guess that means we can stop whining about nene not being a center cause he's an inch too short?
obviously height has little to do with what position you play these days.
He was right there for the picking....
When the Nuggets pick in the 2nd round came up.
I’m sitting there (listening on the radio) going Blair.. Blair.. pick the Stud from Pitt.
Forget who they even drafted. I was like WHO ??
it was the rights to some dude from Europe
Which we sold to save a buck.
Looks like that was a GREAT IDEA Wark
by InboundingLobPass on Oct 22, 2010 8:13 PM MDT via mobile up reply actions
I think Wark's hands were tied on Blair
Stan has been extremely frugal of late.
Overheard during Nuggets radio broadcasts in the 80's: "....Hanzlik.....HEY HANZLIK...don't ever dribble the ball again or I'll bench your ass!" Doug Moe
DenverStiffs.com
by Jeffrey Morton on Oct 22, 2010 10:14 PM MDT up reply actions
How much money did we end up saving anyways?
Wasn’t it just a couple of million dollars on one season? Having Blair for three to four years on his rookie contract would have saved tons of money too, plus it would have solved our big man problems, plus it might have played a factor in the Melo deal, plus we could have had a great group of young guys to rebuild with if Melo leaves with Blair, Lawson, AAA and Favors.
Stiff 4 Life
"I'd rather laugh with the sinners than cry with the saints." - Billy Joel
"Life is just a party and parties weren't meant to last." - Prince
by GoldenNugget on Oct 22, 2010 10:22 PM MDT up reply actions
That's the short sighted nature of not drafting.
You end up signing Harrington for a 5 year $34M deal (granted, only 3 are fully guaranteed) instead of taking a flier on Blair who basically had a 4 year $4M deal coming out of college. Yea, we saved a ton of money there.
Stupid, stupid, stupid. I haven’t had any real issues with Nuggets FO moves over the years, as in I believed the large majority of their choices have been justifiable, but the selling/dumping of draft picks is indefensible. They do it for monetary reasons, and then we end up in worse financial shape. Just stupid and insanely short-sighted, from a team-building aspect and from a monetary one.
lock out would be the best opportunity to relocate nuggets to st. louis
melo leaves the nuggets stan can put the blame on him too. stern is considering contraction. less teams means less jobs. would the players take a one third paycut or the possibility of no nba job at all? nhl used the same tactic to get a hard cap. one week after winning the stanley cup chicago started getting rid of players. stern and the owners best tactic is to try and divide the players on as many issues as possible.
pick up a calf every day pretty soon you will be picking up a cow
we're on a mission from god
To be honest, I've been laughing off the last few Stern statements as complete showmanship/gamesmanship
First he wants to slash player salaries by 30%. Good luck.
Next, he talks about possible contraction. Sure David, sure.
On deck: Stern stating that the NBA needs to be extended to 162 games and playoff rounds to best of 7/9/11/13 per round.
Stay tuned for more Stern posturing!
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