Chronic taxpayers will pay heavy price
Instead, there will be a two-year grace period before the old dollar-for-dollar system is replaced by a more aggressive financial hammer (SI.com obtained official terms of the tentative deal). As an example, Mavs owner Mark Cuban paid $18 million in luxury tax last season on an $88 million payroll ($18 million over the $70.3 million luxury tax threshold). Under Year 3 rules, Cuban would have coughed up $38.5 million in luxury tax.
Still, Chandler's return isn't a slam dunk. He'll have plenty of suitors and big bucks to sort through. But, the Mavs at least know that they can bid high and have two years to live under the old luxury tax rules and then deal with ways to chop salary before the Year 3 tax hike kicks in.
However, there is one new deterrent that takes effect immediately and will make even the most free-spending of owners take notice: A substantial tax increase will slam chronic taxpayers, as Mavs owner Mark Cuban has been since the luxury tax came into existence.
Under the new CBA, tax rates for teams that are taxpayers in at least four out of any five seasons increase by $1 at each increment. For example, for a team salary up to $5 million above the tax level, repeat offenders will pay $2.50 instead of $1.50 for each $1 over; $5 million - $10 million above the tax level, offenders will pay $2.75 instead of $1.75; $10 million - $15 million above the tax level, the penalty is $4.25 instead of $3.25, etc.
Owners such as Cuban, the Los Angeles Lakers' Jerry Buss and the New York Knicks' James Dolan, three of the league's most egregious luxury taxpayers, will have to find inner-discipline and begin planning for payrolls that don't exceed the luxury tax, or at least once in a five-year span.
The Mavs' payroll will rise above the tax line again this season (expected to be around $70 million) with or without Chandler. In 2012-13, they have about $44 million stamped for six players (not including Chandler) and three of those are low-wagers Corey Brewer, Rodrigue Beaubois and Dominique Jones. Jason Kidd and Jason Terry come off the payroll after this season, and clearly there will be significant holes to fill, and that could again mean a payroll that will challenge the tax line.
In 2013-14, $41 million is earmarked to just three players -- Dirk Nowitzki ($22 million) and Shawn Marion and Brendan Haywood (more than $9 million each). An amnesty clause allowing teams to wipe a contract off the books can help, but again, if the Mavs have Chandler signed to an annual salary of $10 million or more, filling out a contending team around Nowitzki could push the threshold.
The two-year grace period before the new incremental and more punitive luxury tax system takes effect is a big assist for a team like the Mavs. But, the significant tax hike for repeat taxpayers is a twist that can't be ignored by owners, even those that play to win at all cost.
103.3 FM ESPN PODCASTS
Play Podcast ESPN NBA analyst Jalen Rose joins Fitzsimmons & Durrett to talk about the NBA playoffs.
Play Podcast Mavericks coach Rick Carlisle gives his take on the contrasting styles of the Pacers and Knicks, Carmelo Anthony, Bulls-Heat, Tom Thibodeau, the state of the West and more.
Play Podcast Chuck Cooperstein joins Fitzsimmons & Durrett to talk about who he would rather have if forced to choose between Dwight Howard and Chris Paul.
Play Podcast Tim MacMahon joins Fitzsimmons & Durrett to discuss the possibility of Chris Paul joining the Mavericks and break down what kind of pitch Mark Cuban would have to make to the NBA's best point guard.
Play Podcast ESPN.com senior NBA writer Marc Stein joins Fitzsimmons & Durrett to touch on the storylines in the NBA playoffs and offer a Mavs perspective.
Play Podcast Rick Carlisle joins Chuck Cooperstein and Tim MacMahon to discuss the Mavericks' disappointing season and what needs to happen for them to get back to the playoffs.
Play Podcast Donnie Nelson joins Chuck Cooperstein and Tim MacMahon to discuss the Mavericks' season and the importance of this summer.
Play Podcast Rick Carlisle joins Galloway & Company to discuss the Mavericks playing after being eliminated from playoff contention, whom he wants to keep for next season and much more.