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Re: Leo Papile's math?

At 08:45 AM 7/29/02 -0400, JB wrote:

        Great post, Kim.
        It's wonderful what a clear mind can produce.
        For me, the big problem with the luxury tax, is that is is
undetermined at the time when the teams are spending their money.
        Why did we go through last season thinking about a  tax and then
when the numbers were released, there was none? Again, this season,
we won't know until it's over. Couldn't they use last years numbers for
the year following?
Hmmm. Well, they probably could but it would somewhat defeat part of what I think is the purpose. And don't get me wrong, I share your frustration.

First and probably most importantly is that the whole idea behind this CBA is to tie revenue splits more closely to actual revenue. This is because of a lack of trust between all the participants, general, and because of some questionable accounting practices that came to light during the last negotiations (the one that sticks in my mind was owners keeping revenue figures down by transferring profits from basketball operations to stadium/arena operations, which were outside the CBA) . And as the upcoming cap, etc figures show, these things don't always carry forward well from year to year, leaving it likely someone would be left really unhappy by using figures from the prior year. My betting on this BTW is that there was an assumption that these limits would continue to only go up and the players were therefore really unhappy about the idea of limiting their share to that dictated by last year's figures. Of course the situation this time around is that the owners would be unhappy over reduced profit margins if last year's season's spending limits were used.

On top of that, the only real point of a luxury tax is to give the owners a basis to justify limiting salaries and to scare them into good behavior despite themselves. However, some owners won't care and will just pay (Cuban), some owners will use it as an excuse to bolster other agendas, while some owners will look at it as just another factor in doing business. Still, for those who will take it seriously one way or another, there 's a much better fear factor to limit overspending if you don't know for sure where the limit is. A known limit you try to work around. An unknown you keep as far away from as possible. And I bet that entered into the thinking too.


        If it were my tax, those teams: Dallas, N.Y., and Portland, who are
so far over, would have been fined and the money paid back to the other
teams, on a sliding scale, from lowest on up, who would be required to
spend at least a high % of it, on players, to counter the inflated
payrolls, of the big spenders. That tax refund spent, would not count
against future tax threshholds.
        If the goal is  parity, then it's one thing to pay the tax, it
would be another to force the beneficiaries to spend it and not penalize
them for doing so.
Yup, and would discourage making staying under the luxury tax to get that money an end in itself.


        I would expect the players would love this. How long would it take
to sign a Travis Best, a Jeff McGinnis, a Rodney Rogers, or a Keon
Clark, if you were using "free" money?
        As for the ego driven "big spenders," would they be so quick to add
star players, if they knew that every dollar they spent to strengthen
their own team, would go to help the competition?
Yes, but that's because it's more to do with emotions than sense. While their egos will tell them that their still going to spend the money more wisely, so it doesn't matter.

Me, I'd still prefer to eliminate the whole thing, set a hard cap and a set limit to the number of guaranteed contracts on a team, so that you could correct mistakes while rewarding the guys who should be rewarded. You'd just be forced to evaluate wisely who gets the guarantees. I still think it's the guaranteed contracts to bad and mediocre players that are the real problem.

Kim