Financial pressures emphasize L.A.'s small window

September, 18, 2012
9/18/12
2:00
PM PT
Kamenetzky By Brian Kamenetzky
ESPNLosAngeles.com
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We've touched on this before, but whenever the numbers are written out in one place -- as the L.A. Times' Ben Bolch does here -- they're worth a mention. The Lakers have for this year and next undertaken a massive, and growing, financial commitment:
"This is the last season the Lakers will pay a dollar-for-dollar penalty for exceeding the luxury-tax threshold, meaning that their league-high payroll of $99.2 million will cost them an additional $28.9 million in taxes, because that's how far they are above the $70.3-million tax level. The tax will raise the tab for their player costs to $128 million.

Starting next season, the tax burden gets significantly heavier. NBA teams must pay a $1.50-to-$1 ratio for the first $4.99 million they are over the luxury-tax threshold, a $1.75-to-$1 ratio for being $5 million to $9.99 million above the threshold, a $2.50 ratio for $10 million to $14.99 million over, and a $3.25 ratio for $15 million to $19.99 million beyond the threshold.

Teams that are $20 million or more over the tax level accrue additional penalties, increasing by 50 cents per dollar for every $5 million...

The Lakers already have $79.6 million committed to eight players for the 2013-14 season. Assuming they re-sign Howard next summer to a maximum contract that calls for him to make $20.5 million in the first year, that bumps the Lakers payroll over $100 million.

If their final payroll was $105 million, that would put them $32 million over the league's projected tax threshold of $73 million, triggering a tax of $94.5 million and putting the team on the hook for a staggering total of $199.5 million — a 55.9% increase over the total for this season with essentially the same group of core players."

This in addition to the team's revenue sharing bill, adding tens of millions more to the "Outgoing Payments" category on the big Excel budget spreadsheet. While the Lakers certainly are a revenue monster, particularly in light of their multi-billion dollar deal with Time-Warner, there is always an upper limit somewhere. Even the Yankees, the gold standard in franchise largesse, have hit a top end when faced with MLB's more punitive tax policies.

Additionally, things only get pricier for the 2014-15 season when the new CBA's "repeater tax" kicks in. While the only player under contract at that point will be Steve Nash, they'll probably need others (if only to fully take advantage of Nash's passing skills). The assumption is he'll be joined by Howard, but who else?

It'll be fascinating to see how the Lakers handle things in the long view. Does Kobe stay for less? Does he retire? What about Pau Gasol? Do they spend a season resetting the luxury tax clock by getting under the salary cap for a year? The answers are likely dictated by the next two seasons, and reinforce their urgency. Unlike the Heat, who could absorb a couple empty seasons after constructing their SuperTeam! because of the squad's age/financial demographics, the Lakers don't have that luxury.

If they're going to push Dr. Buss past Boston or Kobe past Michael Jordan, they may very well need to bat 1.000 over the next two seasons.

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TEAM LEADERS

POINTS
Kobe Bryant
PTS AST STL MIN
25.2 4.8 1.4 35.4
OTHER LEADERS
ReboundsJ. Hill 8.6
AssistsK. Bryant 4.8
StealsK. Bryant 1.4
BlocksE. Davis 1.2