Your home budget must be a disaster if you honestly think charges next year don't matter in determining how much a person "saves."
The Current Finacial Situation 9/25/10
- Thread starter BabyPeterzz
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Your home budget must be a disaster if you honestly think charges next year don't matter in determining how much a person "saves."
He's not. End of story. If he was then the number would be a lot closer to $20 million.
Actually my speculation relates to how you assess probabilities. It also points out that if everything doesn't go exactly perfectly the Jazz will forefeit the luxury tax benefit this year. You can't argue that. It's a fact. The only way to avoid it would be to further dump salary.
The other thing you don't seem to realize is that I gave you the forumla I used so you can figure it out based upon any numbers you want to use. The speculative amounts I guessed (total tax bill for next year and probability of being a tax payer) only account for approx. $1.1 million of the difference. The rest are all functionally guarantees.
You're better off with a blank slate than you are with $9 million on the books. It makes the Jazz less flexibile financially and less flexible in terms of their roster going forward. You and Locke assign that at a cost of $0.
That's a ****ing fantasy land assessment. Any reputable accounting firm in the country would assess the savings to the Millers at $9 million maximum and discount based on probabilities from there. I look at these types of accounting reports all the time as they relate to expenditures and charge-offs.
The $20 million estimate in a statement by a public company would be actionable fraud.
Twin Towers
Well-Known Member
I did not say it does not matter.
Luxury tax savings and next years salary cannot be added or subtracted together. It does not make any sense especially in this case when you know that the money would be spent on other players. So the only way to know it is to speculate who we would get next year (letting AK's contract expire) compared to what Diaw gives us. And its total bull **** to even talk about something like that.
This isn't like buying a more expensive air conditioner that is more energy efficient so you save money next year. You can't compare our lifestyles and a personal budget to the a NBA teams salary and luxury tax penalty. Too many factors that are completely different and effect them in major ways.
The argument here, and the reason for talking about the savings to the Millers by Lock and the media, is about financial viability for the owners. Operating profits and expenses are running sums. Next year absolutely matters.
If the argument is about the bottom line, let's really talk about the bottom line. The bottom line is that it saves significantly less than $20 million over any term longer than one year. That's a fact.
Twin Towers
Well-Known Member
What does this even mean? If it doesn't go exactly perfectly?
If we are under the luxury tax we get the benefits. What would change that once we are under it?
Twin Towers
Well-Known Member
Believe me I understand everything your saying. How the total savings today would be 9 Million. But you can't say that is the end of the story. You have to look at how that money would be spent next year. I fully get your accounting argument but this is a totally different application. And its a very detailed one. And only a detailed accounting analogy with the same variables would make sense (to me at least).
The questions is.........Is AK worth keeping this year? (even though we lose at least 16 Million this year) compared to spending 9 Million on diaw next year but most likely not being in the luxury tax?
We can at least agree on the statement above I think. But there is no resolution for an opinion on which one hurts us more.
What if we turn into the golden State warriors and guys get injured?
If we even have to sign one D-leaguer to the minimum we go over the line and forfeit the tax payout. That's how thin the margin is.
In order to get that money everything has to go perfectly. Fes has to sign for the QO and no more. We have to have no injury replacements during the year. We can't do any deals that add any salary during the season. Etc.
Twin Towers
Well-Known Member
But we still get the Luxury tax benefits (the payout at the end of the season is what i was talking about).
No we wouldn't. Having to sign a D-leaguer pushes us over the line. A Fes deal closer to $2 million pushes us over the line.
One thing not going perfectly costs the Jazz the cost of the contract + the level over the LT + the loss of money from the payout.
One thing goes wrong and 20-40% of the supposed financial benefit of the trade (no matter who's estimates you believe) evaporates.
homeytennis
Well-Known Member
Cory Violette, Lance Allred and Kevin Kruger would show up at the minimum. Super luxury tax savings.
Twin Towers
Well-Known Member
That is way too much speculation though. We don't know if Fesenko will get 2 Million this year and an injury is very unlikely (1 injury doesn't hurt us. Only 2 would put us into a place where we need to sign someone). Jazz would most likely just sign 10 day contracts throughout the year to stay at 13. And i've seen D-Leaguers get paid 400,000 for the year. Would a contract around that price still put us over?
And in your accounting did you take Gaines off the total salary (since he will be released)?
Look above:
Post trade: $68.34 million guaranteed (i.e. no Gaines, Jeffers, Evans, etc)
Margin for tax is $70.37 - $68.34 = $ 2.03 million
If Fesenko signs for the QO that gives the Jazz only $.98 million in breathing room.
In order to have even the $.98 million they have to release ALL non-guaranteed players. Not just Gaines. That means no Evans, no Jeffers, no Thompson.
That's 13 players under contract, one of which is already injured (Memo). Functionally, we'd have only 12 players. That's a razor thin margin for error and almost no money to operate with. If we keep a single rookie player on the non-guaranteed list it goes down to only $.5 million breathing room. If it's only Jeffers it goes down to about $.2 million breathing room.
If we keep any combination of two we're essentially at 0 or already over to start the season.
If Fes gets an offer from the Rockets we have to match we're probably already at zero before we talk about anyone else.
Injuries happen in this league and the margins we're talking about are so small that a single D-League signing could push us over. One major injury (Bell for example) and we're definitely going into tax town.
Counting on getting a big payout for being under the tax is a fantasy unless the Jazz plan on dumping more salary during the season. And that's an ******* move to the fans after doing a piss poor AK trade.