Location, tax rates can have big impact on contract’s value

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With the mind-boggling money being doled out in NBA contracts, players don’t seem to be overly concerned about state taxes – or the lack of them.

Stephen Curry signed a $201 million deal with Golden State and Blake Griffin got a $175 million from the Los Angeles Clippers. The rub: In California, the top tax rate of 13.3 percent is the highest in the nation. To get just a rough indication of how much state tax they might face, consider that 13.3 percent of $201 million is about $26.7 million.

Meanwhile, Houston Rockets guard James Harden signed a $228 million extension to play in Texas, which has no state income tax.

Players are keenly aware of the differences, but it’s just one of many factors in their decisions.

How big a factor, it depends on the player and situation.

“It’s a consideration” for players, said Sean Packard, the tax director for Octagon Financial Services. “It’s not always the be-all and end-all, but it’s definitely something agents look at and that players look at.”

But when it comes to the IRS, the dollars connected to a player’s contract don’t tell the whole story about how much he’s going to be making. Where a player chooses to play – for instance the Boston Celtics or the Miami Heat – could go a long way in determining how much money he ends up receiving.

Players realize they could make more accepting a deal for less money from a team located where there are no state taxes than by signing with a team offering more money but located where there are state taxes.

“You’ve got to remember the best gross contract might not be the best net contract,” said Robert Raiola, who includes many professional athletes among his clients in his role as director of sports and entertainment for the PKF O’Connor Davies accounting firm.

Raiola cites former Utah Jazz forward Gordon Hayward‘s recent deal with the Celtics as an example. Boston and the Miami Heat could have offered Hayward essentially the same contract, but Hayward would have made more in Miami due to the different tax rates in Florida and Massachusetts. Of course, that would depend on where he had taken up residence.

Hayward agreed to a four-year deal with a total value of around $128 million. But according to Raiola’s calculations, Hayward’s “net” deal adds up to about $69.4 million after taxes are taken into consideration. Raiola said the same contract from Miami would have netted Hayward about $71.4 million.

If Hayward had stayed in Utah, he could have received a five-year maximum deal worth over $172 million. Raiola said that would have equated to about $91.3 million after taxes.

These types of comparisons aren’t uncommon.

Packard says he has a client who was choosing among three teams last year. Packard said a team from a state without an income tax offered his client the lowest salary, but it actually turned out to be the most lucrative deal once taxes were taken into account.

Packard says teams located in places without state income taxes use it as a leveraging tool and make players well aware of the advantages of signing there. In the NBA, that would include the Heat, Rockets, Orlando Magic, San Antonio Spurs, Dallas Mavericks and Memphis Grizzlies.

“When they’re pitching a player, they’ll say (that) we may be offering you less money, but they’ll kind of do their own calculations for the taxes and show that this is how you end up netting,” Packard said. “They know what other teams are pitching as well.”

Massachusetts has a 5.1 percent tax rate, whereas Florida doesn’t have a state income tax. But figuring out the difference in what Hayward would have made in Miami rather than Boston isn’t as simple as comparing those figures.

That’s because many states have a so-called “jock tax” that charges athletes visiting from other states to play games. For instance, Texas doesn’t have a state income tax, but members of the Mavericks, Rockets and Spurs are taxed for each day they spend practicing or playing road games in states that do have this tax.

Under that same rule, even if Hayward chooses to live somewhere other than Massachusetts, he’d be taxed by the state for each day he spends in Boston playing in a game, practicing or participating in some other team function.

So the difference in net pay an athlete might receive for choosing a team in a low-tax state over a team in a high-tax state isn’t as great as it might be if he were only being taxed in his home state.

These types of decisions must be made by free agents in all sports – not just basketball.

When defensive tackle Ndamukong Suh left the Detroit Lions for the Miami Dolphins in March 2015, he received $60 million in guaranteed money. Raiola said the difference in tax rates meant the Lions would have needed to offer him $65 million guaranteed just for the two contracts to have the same net value.

But tax rates are just one factor in a player’s decision.

“It’s all up to the player’s preference,” said Josh Horowitz, a co-founder of the sports and entertainment division at the WithumSmith+Brown accounting firm. “Maybe a player wants to live in New York and wants to live that lifestyle, so they’re willing to pay the extra tax, as compared to going to Miami or Texas.

“It depends on what they want to do. If they want to go chase a ring, they’ll go to Golden State right now and pay the higher tax to chase a ring. It all depends on what everyone’s preference is.”

 

New California law prompted by crash that killed Kobe Bryant

Kobe Bryant crash site
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SACRAMENTO, Calif. (AP) — Gov. Gavin Newsom on Monday approved legislation prompted by the helicopter crash that killed Kobe Bryant and eight other peopls that makes it a crime for first responders to take unauthorized photos of deceased people at the scene of an accident or crime.

Reports surfaced after the Jan. 26 crash that killed Bryant, his daughter Gianna and the others that graphic photos of the victims were being shared.

Eight deputies were accused of taking or sharing graphic photos of the scene, Los Angeles County Sheriff Alex Villanueva said then, adding that he had ordered the images deleted. He said the department has a policy against taking and sharing crime scene photos, but it did not apply to accident scenes.

The measure that will take effect Jan. 1 makes it a misdemeanor with fines up to $1,000 per offense to take such photos for anything other than an official law enforcement purpose.

Bryant’s widow, Vanessa Bryant, has sued the department over the photos.

LeBron James calls bubble “the most challenging thing I’ve ever done” in NBA

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The NBA bubble has worn on players.

Paul George talked about the depression it brought on, saying he went to a “dark place.” Other teams just seemed to crumble under the weight of it when things got tight.

The strong-willed survival of all things bubble is why the Los Angeles Lakers and Miami Heat start play in the NBA Finals on Wednesday. Just don’t think it’s been easy.

“It’s probably been the most challenging thing I’ve ever done as far as a professional, as far as committing to something and actually making it through,” LeBron said on Media Day Tuesday. “But I knew when I was coming what we were coming here for. I would be lying if I sat up here and knew that everything inside the bubble, the toll that it would take on your mind and your body and everything else, because it’s been extremely tough.

“But I’m here for one reason and one reason only, and that’s to compete for a championship. That was my mindset once I entered the bubble, once I entered the quarantine process the first two days. Then right from my first practice, my mindset was to — if I’m going to be here, make the most of it and see what you can do and lock in on what the main thing is. The main thing was for us to finish the season and compete for a championship.

“So that’s just been my mindset throughout these — I don’t even know how many days it is. However many days it is, it feels like five years. So it really doesn’t matter. I’ve been as locked in as I’ve ever been in my career.”

LeBron James has been a leader in every sense throughout the bubble. On the court, he took charge when it was needed to lift the Lakers organization back to the NBA Finals for the first time in a decade.

Off the court, he has been a consistent and loud voice for social justice — and he has put his money where his mouth is. That has made him a target of conservative talking heads, to which LeBron has largely shrugged. He’s thinking bigger picture, not their short-term distractions.

Right now, however, he’s thinking about winning NBA Finals.

 

NBA Finals Preview: Five key things to watch when Lakers face Heat

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—This is not the NBA Finals preview we expected to write heading into the season because this had never happened in NBA history: Two teams that were 10 seeds a season ago, two teams completely out of the playoffs, are competing in the NBA Finals one year later.

The Los Angeles Lakers and Miami Heat both have the advantages of market and management, and both used that leverage last offseason to land big stars — Anthony Davis and Jimmy Butler — who could lead them back to this point.

The Lakers and Heat meet in an interesting chess match of a Finals — the Lakers have the two best players in the series, but the Heat have the better ensemble and have thrived in the bubble. Miami also creates some matchup challenges the Lakers have yet to see this postseason.

Here are the five things to watch, five things that will help decide the 2020 NBA Finals (with my prediction at the end).

1) Bam Adebayo vs. Anthony Davis

Anthony Davis has been the best offensive player so far in the playoffs — he is averaging 28.8 points per game and is scoring with ease from all three levels. He’s a devastating finisher at the rim, he is hitting 36.6% from three (on 2.7 attempts a game), and when he gets the ball and faces up he’s been unstoppable, including from the midrange. Portland and Denver went big but slower against him, Houston has no center, and none of those teams had an answer for Davis.

Miami has Bam Adebayo.

No one player will stop Davis, but Adebayo is an All-Defensive Team player with the length, instincts, and athleticism to make Davis work. Adebayo is a fantastic isolation defender, by far the best Davis has faced this postseason. Davis will get the ball and drive, but the buckets will not come as easily — ask Giannis Antetokounmpo.

“Bam is a great player, Davis said of Adebayo. “Bam is a lot like [Nikola] Jokic. He handles the ball a lot, pushes them on the breaks for them, he makes great passes, scores. He’s like their energy guy as well. So, it’ll be fun. Two Kentucky guys. Coach Cal [John Calipari] probably texted and called me enough about that.

But it’s going to be a fun matchup… That team leans on him a lot. I think it was Game 4 where he took that pressure, and took the blame for not playing well, and ended up losing. And he comes out in Game 5 and almost had a triple-double.”

When the Heat have the ball, Adebayo is at the heart of Miami’s attack — he was the difference in the fourth quarter of Game 6 against Boston — and like Davis, he attacks the rim. Davis can defend him but it’s going to require a lot of energy on the defensive end.

Miami likely will use Jae Crowder to guard Davis at times as well, they will go under every pick and play back in the paint, daring Davis and the Lakers to be jump shooters. It’s the right strategy, but the way Davis is playing he will make Miami pay anyway.

2) Miami’s shooters get red hot

The Lakers have been a fantastic defensive team through the playoffs in part because they are quick on their rotations, scramble well when things break down, and they don’t give up a lot of threes (32.9 attempts per game, second-lowest in the playoffs).

If Miami is going to win this series, Duncan Robinson, Tyler Herro, and the rest of the Miami shooters are going to have to change that dynamic. The Heat have to keep moving to get open then shoot over the top of the Lakers’ defense all series, stretching their defense across the court.

“The way they move off the ball, they share the ball,” LeBron said of things that have impressed him about the Heat. “Everyone is live on the floor. There’s not one guy that you can disrespect or be off throughout the course of an offensive possession. And they do a hell of a job of moving without the ball, sharing the ball, cutting, passing.”

The Lakers have length, but do they have a defender who can stay in front of this Goran Dragic — the guy in the bubble playing like the All-NBA version of himself from six years ago? If he gets into the paint and hits a few shots, the Lakers’ defense will collapse down and suddenly, two quick passes and Heat shooters will have an open three. That’s bad news for L.A.

Miami was streaky from deep against Boston — Herro had a great game but Miami shot under 30% from deep in games two, three, and four — and they can’t be against the Lakers. Miami’s chances in this series hinge on its ability to shoot lights out.

3) Lakers dominating the offensive glass

The Los Angeles Lakers have grabbed the offensive rebound on 29.7% of their missed shots these playoffs, and those second-chance points have helped fuel their run to the Finals. With Davis and JaVale McGee/Dwight Howard up front, the Lakers’ size inside has been a problem for teams. Even big teams. It’s been all season long.

Pat Riley used to tell his Showtime Lakers “no rebounds, no rings,” and that will apply to his Heat now — if Miami doesn’t keep the Lakers off the offensive glass they will lose. Miami plays with incredible energy (which has helped them on the offensive glass at critical points), and they will need to focus that energy on the boards this series.

4) Jimmy Butler and Heat try to make LeBron a jump shooter

The most telling action to watch in this series is how Miami defends the LeBron/Davis pick-and-roll.

The Heat got to the Finals playing zone defense (more on that is a few paragraphs) and being a switching team in man-to-man. However, they may look like more of a basic drop defense against the Lakers — go under the pick, pack the paint and protect it, and dare the Lakers to become jump shooters.

Especially LeBron. The problem is, back off LeBron and he sees a runway. That is where Butler comes in — he has to have a fantastic defensive series keeping LeBron from taking over (and it’s fair to question if he still has the athleticism to do it, even against an age 35 Lebron). Guys have been trying to find a way to slow LeBron for 17 seasons, and with limited success. For Miami to have a chance, Butler (and to a lesser degree Andre Iguodala) will have to make him work hard for his points.

“He’s seen everything,” Heat coach Erik Spoelstra said of LeBron. “At this point in his career, it’s just about winning. And his ability to do what he does at his age is incredibly uncommon. But there’s a lot of work that goes on behind the scenes to be able to maintain that.”

LeBron will hunt for switches and try to get Herro or Robinson on him — he is relentless at forcing the matchup he wants (even if Miami is fairly good at avoiding the switch). The Heat rookies could be in for a long series.

Then there is the Miami zone.

Miami will use it to protect the paint — pack it in a little, take away lanes for LeBron to drive, remove passing lanes to cutters, and try to take LeBron out of his comfort zone. The challenge is Miami likes to put its bigger wings out top in the zone to overwhelm smaller ball handlers (think Boston’s Kemba Walker), but that’s not going to work against LeBron. Still, the Lakers have not done as well against a zone in the playoffs (less than a point per possession, but just 30 possessions according to Second Spectrum tracking data, so it’s small sample size theater). The Lakers will need to figure it out, as Boston eventually did, because the Heat will run it until the Lakers beat it.

5) Which team stays out of foul trouble

Nobody ever pities the referees, but they are in for a brutal series.

Both the Lakers and Heat attack the paint and put pressure on the officials to make calls — and the Lakers have fouled a lot these playoffs. Both teams will target getting key opponents in early foul trouble — watch the Davis/Adebayo matchup in particular and LeBron/Butler. Both teams will be physical.

“You got to be smart about ticky-tacky fouls,” Adebayo said.

How games are officiated — is it called tight, or do they let them play a little? — will mean a lot in this series.

Expect a lot of complaining — from players, from coaches, and from fans — about the officiating. Expect letters and video to be sent to the league by both teams. Expect fines for complaining.

Despite what fans think, the referees will work to be impartial in the NBA Finals, but it’s going to be hard for the referees to stay out of the middle of this series.

Prediction: Lakers in six. As many problems as Miami poses for the Lakers, LeBron will figure out the puzzle.

Report: Delonte West enters rehab with help of Mavericks owner Mark Cuban

Mavericks owner Mark Cuban with Delonte West
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Every so often, a video or picture goes viral of Delonte West – who played primarily for the Celtics and Cavaliers and whose NBA career ended with the Mavericks in 2012 – on the street appearing to be in rough shape.

Mavericks owner Mark Cuban did something about it.

TMZ:

Mark Cuban is personally helping Delonte West get back on his feet … with the Dallas Mavericks owner picking up the ex-NBA star at a gas station in Texas.

We’re even told Cuban has offered to help cover Delonte’s cost for treatment.

Shams Charania of The Athletic:

Good for Cuban for stepping up. And hopefully West gets the help he needs.