Everyone fears the repeater tax — even McHale Prokhorov.
Under the terms of the current NBA Collective Bargaining Agreement, teams that pay the luxury tax four seasons in a row will fork over at a higher “repeater tax” rate for living above the line (something meant to punish teams like the Lakers and others that would ignore the tax line in the old CBA). That higher tax rate starts at $2.50 for each $1 teams are over the line (for non-repeaters the rate is $1.50 per $1). The rate goes up if teams are more than $5 million over the line.
No team has yet to pay it — but the Brooklyn Nets could be the first next season. Thanks to their ill-advised “buy me a winner so I can open Barclays Center” season, the Nets have been way over the tax line. Next season would be their fourth over the line (expected to be about $81 million), depending on what happens with keeping Brook Lopez and Thaddeus Young (both are expected to opt out and be free agents, the Nets say it is a priority to re-sign both).
To get under the line, the Nets may try to trade some key pieces, reports Marc Stein at ESPN.
It is widely assumed the Nets will explore the trade markets for both Joe Johnson (with his expiring $24.9 million deal) and Jarrett Jack (due $12.6 million over the next two seasons but only partially guaranteed in 2016-17) to try to get away from tax territory that way, instead of waiving and stretching Deron Williams.
In an ideal world, the Nets could rid themselves of the two-years, $43.3 million left on Deron Williams’ deal, but that will not be easy. Williams declining skill set and injury history make him hard to trade (the Nets don’t have sweeteners like draft picks they can afford to throw in a deal). If they use the stretch provision in Williams he’ll be on the books for almost $9 million a year for five years. Better to bite the bullet now.
Johnson, owed $24.9 million next season, also will not be easy to move at that price, expiring contract or not. Again, teams will want more as reasons to take on that salary.
Jack is owed a very reasonable $6.3 million next season and is only partially guaranteed at that same price for the following season. A lot of teams would be interested in Jack at that price as a backup point guard they can trust.
The Nets are in arguably the worst situation going forward in the league — they are old and expensive, without many draft picks thanks to their trades. Things are going to get worse before they get better in Brooklyn, especially if they start trading away salary to save money.