The Toronto Raptors had two scenarios for next season in which they would spend $3 million and $7 million over the luxury tax cap.
Now, for a team that has played with staying just under the luxury tax line ever since escaping those disastrous contracts they signed in hopes of retaining Vince Carter, that was news.
Or was it?
Staying under the luxury tax line is very compelling to teams focused on making the most money with the least risk.
First teams save the dollar-for-dollar tax that is paid to the league for each dollar in salaries above the tax line.
Second your team is entitled to a share in the luxury tax monies received by the league from tax payers.
Counting the actual salary paid that puts the team into a tax situation, a small luxury tax move like the Raptors are describing can the impact on the team’s bottom line by three times the tax paid (approximately). ...
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Article written by Stephen Brotherston