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Clippers Off-Season 2016: A Clarification on the Clippers' Luxury Tax Situation

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A couple of my prior numbers were a touch off.

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This article will be brief, and in 2 parts.

Here's the first part: if you'll recall, I published an article on Friday that broke down the tax implications of the Clippers' C.J. Wilcox trade.  It was wrong.  I was using projections for Jamal Crawford and Austin Rivers' new contracts, and my projections were just a touch off from the real values.  I guessed at $13,000,000 for Crawford and $10,800,000 for Rivers--the actual first-year values are $13,253,012 and $11,000,000.  My projections were fairly close and got the job done for most purposes, but for navigating a few hundred thousand dollars of wiggle room, the $453,012 difference obviously messes up my numbers.

While I pride myself on understanding of the cap, something that I've never been is an "insider"--so while my mock planning was valid with the numbers I was playing with, I didn't have the access to get the real contract info.  Over the weekend, a second source confirmed to me that Bobby Marks (of The Vertical) has the correct numbers for Crawford and Rivers, so those--the ones above--are what we're now working with.  I'm sorry for the mishap.

The second part of this article will be a brief but accurate breakdown of the luxury tax situation now that I have the correct numbers on Rivers and Crawford.  The only possible discrepancy remaining is regarding Marreese Speights' deal.  If he has a player option for year 2, then his cap hit is $1,403,611.  If he doesn't, his cap hit is $980,431.  Full disclosure: I will be operating under the assumption that he has a player option for year 2, and the larger cap hit.  If you want to disagree with that, you'll have to use a modifier of $423,180 for each number.

Here's where the Clippers currently stand: 14 guaranteed deals, one open spot, $472,601 over the tax line (meaning even if Speights doesn't have the player option they're over).

Obviously, since they're over with 14, anybody they add to that 15th slot is going to keep them over--be it a veteran's minimum, a player into the Wilcox TPE, or even a rookie like David Michineau.

Since of the Clippers' 14 guaranteed deals, 9 were signed this summer, they don't really have a ton of flexibility to wiggle under the tax threshold at this point.  The only pieces who can be traded right now are Chris Paul, Blake Griffin, DeAndre Jordan, J.J. Redick, and Paul Pierce.  Assuming the core 4 aren't being touched, that leaves Pierce as the lone wild card.

His $3,527,920 salary would be enough savings to keep the team under the threshold if he were to retire or be traded for less salary (they could even waive him and stretch his salary to get under, but that obviously won't happen).  With that money off of the books, the Clippers would have 2 open spots and $3,055,319 to use, which means two veteran's minimum deals, or even one minimum deal and one player taken back into the C.J. Wilcox TPE ($1,209,600 plus $100,000 in wiggle room under NBA trade rules).

Essentially, the Clippers' tax fate heading into the season hinges on Paul Pierce.  Fortunately, it isn't a big deal--they won't have a big tax bill anyway, Steve Ballmer is willing to pay the tax, and even being under this year won't save them from the repeater rates next summer when their bill will likely be massive.  It's not an indictment of Pierce or pressuring him to retire--it's just an observation that if he leaves, they'll almost certainly avoid it, and if he stays, they'll almost certainly have to pay it.

It's also important to remember that the only thing that matters is what your salary sheet looks like at the end of the season.  If the Clippers were to make a mid-season move that shed enough salary to get under the tax threshold, they would still avoid being taxpayers.