Tax could be coming after all
Back in December, it was possible to talk taxes in NBA circles without angst. Commissioner David Stern spoke cautiously of his efforts to generate enough revenue to avoid a luxury tax after this season. Stern admitted that was a long shot, but there was widespread confidence that there would be no tax triggered after the 2004-05 season, because revenue growth would sufficiently outstrip the rise in player salaries by then.
Figures now that, in the vicinity of April 15, tax talk has taken on a darker tone.
Stern said after the recent Board of Governors meeting that the league remains "in a negative cash position" despite some revenue gains. Specifics are scarce for those of us who don't have access to detailed information on NBA finances, but we do know teams are revising their forecasts and bracing for disappointments this summer and next.
Dan Rosenbaum, a UNC-Greensboro economics professor who ranks as a leading luxury-tax authority, told us at Christmas that he was projecting a less than one-in-10 chance of a luxury tax being triggered after the 2004-05 season. Rosenbaum now sees at least a 30-percent chance of a tax coming in the summer of 2005, and that might be a conservative estimate.
Rosenbaum's calculations also suggest that the salary cap could go down this season from the current $43.8 million for just the second time in league history. If the cap indeed goes down -- or even if it stays relatively flat -- and with a luxury tax after next season more of a possibility, this summer's free-agent market would surely be affected.
In his latest analysis (located at http://www.uncg.edu/bae/people/rosenbaum/luxtax.html), Rosenbaum suggests that the Clippers and Suns will find it tougher to clear the salary-cap space needed to make a max-contract offer to Kobe Bryant. Rosenbaum also contends that the Pistons and Spurs will face even greater challenges retaining their own free agents -- Detroit keeping Rasheed Wallace and Mehmet Okur, for example.
Stay tuned. Forecasts change quickly and surprises happen, so this prognosis isn't terminal. Last July, you'll recall, the cap went up higher (to $43.8 million) than anyone envisioned once the final numbers were calculated and gave teams like Washington that little bit of extra cap room needed to sign a Gilbert Arenas.
Unfortunately, the people we know who are good at math say it'll take another big surprise this summer to loosen up offseason player movement.
Team USA will indeed be staying on a cruise ship at this summer's Olympics in Greece, but it's not as vain as it sounds. The Athens Organizing Committee actually proposed that option as an alternative to traditional Olympic housing, and the ship is considered part of the athletes' official compound, and thus accorded a level of security on par with the main village.
The plan in Athens calls for the entire USA Basketball party (men's and women's teams) to use the ship for housing. The teams will be able to walk on and off the ship to travel conventionally to the basketball venue, since the harbor is closer to that venue than any other housing option.
Truth is, criticism of NBA players' reluctance to stay in the village has always been somewhat unfair, because many athletes in other sports register in village but stay elsewhere during the Games. The difference: Not many Olympians have the world profile of a basketball millionaire from the States.
Yet there's no question that staying on a cruise ship does offer an important bonus for American pros already leery about playing in a country known for chaos. This way, the Yanks will have their own getaway vehicle if necessary, should the worst fears of security problems in Greece be realized.
It remains unclear how many of the original nine NBA players selected by USA Basketball will play in Greece, with injury concerns or personal conflicts -- or even terrorism fears -- potentially ruling out Kobe Bryant, Tim Duncan, Jason Kidd, Jermaine O'Neal, Karl Malone and Ray Allen. Tracy McGrady and Allen Iverson have pledged to play no matter what, alongside Mike Bibby and recent additions Richard Jefferson and Elton Brand, but Vince Carter declined a roster spot before Jefferson and Brand were added. <"http://sports.espn.go.com/nba/columns/story?columnist=stein_marc&id=1761345">ESPN.com reported in mid-March that official invitations were extended to Shaquille O'Neal and Kevin Garnett, but both have voiced hesitations and say they plan to defer a final decision until after the playoffs.
It wasn't long ago that we passed along the nugget from ESPN's Research Department about the West 's record-setting dominance over the East. The following list puts that dominance, a head-to-head record of 266-154, into context:
Best Conference vs. Conference Winning Pct. (Since 1970-71) .633 West over East (2003-04) .632 West over East (1971-72) .617 West over East (2000-01) .605 West over East (1970-71) .596 East over West (1988-89) .595 West over East (2002-03)
Even though the Least has clearly been taking a pounding, with three of the past four seasons ranking in the top six on the above list, Leastern Conference residents did avoid one dubious distinction this season. Miami's strong finish and New Orleans' scramble back to .500 in the season's final week prevented the Least from setting a new record for most sub-.500 playoff teams from one conference. It appeared for a while that the Least of 2003-04 might have four such playoff teams. Three is the record, as shown here:
Season; Conference; Sub-.500 Playoff Teams 1996-97 West; 3 (Wolves, Suns, Clippers) 1991-92 East; 3 (Nets, Pacers, Heat) 1985-86 East; 3 (Nets, Bullets, Bulls) 1985-86 West; 3 (Kings, Spurs, Blazers) 1984-85 East; 3 (Bullets, Bulls, Cavaliers) 1966-67 West Division; 3; (Hawks, Lakers, Bulls) 1956-57 West Division; 3; (Pistons, Lakers Hawks)* *Prior to 1970-71, the two conferences were known as the Eastern Division and Western Division.
There are rumblings in Atlanta that the Hawks are actually somewhat nervous about winning the draft lottery, which would force them to draft local phenom Dwight Howard. Reason for the nerves: Howard is not NBA-ready like LeBron James, which would only set him up to disappoint. Yet one rival executive dismissed such thinking as the intentional misinformation that gets passed around as the draft approaches. "The only reason the Hawks wouldn't want the No. 1 pick is if they feel that someone else is a better choice at No. 1 -- and they feel forced to take Howard," the Western Conference executive said. "You have to give your fans and the media more credit than that. They know (Howard) isn't LeBron." ... The same executive, on why this isn't the year to lament the flood of high schoolers declaring for the draft: "If we didn't have them, this draft would be very, very, very weak." ... They were rebuffed by Del Harris, who has no interest in the Raptors' GM opening, so you wonder now why isn't Toronto trying to squire Del's son, Larry Harris, away from Milwaukee. As a rookie GM, Harris is on the fringes of Executive of the Year contention after putting together the surprise team of the East on a shoestring budget. ... Last spring, in losing to the Celtics in six games, the Pacers averaged 91.2 points on 38.8-percent shooting. This spring, in its 4-0 sweep, Indiana averaged 101.3 points on 45.9-percent shooting to become just the second team in league history to sweep a best-of-seven series with four double-digit wins. Boston was the last team to do it, sweeping Houston by an average of 18.5 points in the 1980 Eastern Conference semis. The modern-day Celtics, by contrast, have now lost eight consecutive playoff games -- the worst postseason stretch in franchise history. ... The expiration of Clifford Robinson's playoff streak has received plenty of attention here, but we shouldn't forget Scottie Pippen's. Whether or not Pip plays next season, this was the first time in an 18-season career that he wasn't on a playoff team. ... Rosenbaum estimates the mid-level exception available to all teams over the salary cap to stay at roughly $4.9 million for next season.
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