Boston Celtics: Luxury Tax
July, 28, 2012
By Chris Forsberg | ESPNBoston.com
Jesse D. Garrabrant/NBAE/Getty ImagesCeltics owner Wyc Grousbeck celebrates with the team during the 2007-08 campaign.The Boston Celtics will enjoy their lowest luxury-tax payment since the start of the Big Three era next season. But don’t misconstrue it: The Celtics keenly managed the cap this summer in order to produce the most competitive roster possible, and this team has never been afraid to spend.
By staying within the luxury-tax apron ($4 million over the $70.3 million tax threshold), the Celtics were able to utilize the full value of the midlevel exception ($5 million) this offseason. That allowed them to lock up Jason Terry early in the free-agency process, helping to offset the eventual loss of Ray Allen. By utilizing the full midlevel, the Celtics were essentially hard-capped at $74.3 million this season, meaning their dollar-for-dollar tax bill next year won’t exceed $4 million.
For a team that’s paid $44.5 million in luxury-tax penalties over the past five seasons, that’s a nice break. Boston paid a whopping $14.9 million in luxury tax during the 2009-10 campaign and $7.4 million last year.
But a smaller bill shouldn’t be viewed as less of a commitment to winning. The Celtics haven’t been afraid to spend in a league in which others have often been reluctant.
Earlier this week, ShamSports.com released a fascinating glimpse at the history of luxury-tax payments since its inception during the 2001-02 season. Only four teams have paid more in luxury tax than the Celtics: the Mavericks (deep-pocked owner Mark Cuban hasn’t been afraid to build a competitor), Lakers (Kobe Bryant’s contract alone practically ensures they’ll always be in the tax), Knicks (paying for their own mistakes), and Blazers (Portland paid $80 million in the first two years of the tax with a bloated salary, but has spent only $8.2 million since).
As ShamSports pointed out, there are seven teams -- nearly a quarter of the league -- that have yet to pay the tax in the Bobcats, Bulls, Warriors, Clippers, Hornets, Sonics/Thunder and Wizards. For teams that wish to stay competitive, like Chicago and Oklahoma City, avoiding that tax will be hard to do moving forward.
The Celtics, meanwhile, are one of only three teams (Mavericks and Lakers the others) to pay the luxury tax in each of the past five seasons. That commitment to spending could leave Boston exposed to new “repeater” penalties that will be introduced during the 2014-15 season, driving up how much ownership will have to pay in order to allow the team to climb above the threshold.