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Dan Gilbert

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Cavaliers' tax bill on course to drop 35 percent

Shooting guard J.R. Smith remains unsigned with training camp only two weeks away, but the Cleveland Cavaliers are poised to realize significant savings this coming season even after the expected re-signing of Smith.

Even after re-upping LeBron James on a multi-year deal that will pay him a league-high $31 million in 2016-17 -- and with Smith expected to command a salary in the $13-14 million range in the first year of a new deal -- Cleveland's luxury tax bill is on course to drop by an estimated 35 percent, according to ESPN calculations.

As ESPN.com reported in July, Cavs owner Dan Gilbert paid $54 million in luxury tax after last season -- $34 million more than the next-highest taxpayer. That figure is currently projected to drop to the $35 million range even when accounting for the eventual Smith signing, although the exact tax bill will not be locked in until after the season.

The $54 million tax expenditure certainly proved worthwhile, given the Cavs' championship breakthrough to lift a 52-year pro sports title drought in the city of Cleveland.

But more wiggle room awaits for the Cavs' title defense thanks to the NBA's huge salary-cap spike heading into this season, which also features a corresponding dramatic rise of the luxury-tax threshold to $113.3 million.

The unprecedented cap spike has dominated discussion throughout the offseason, but the new tax line impacts the Cavs more than any other team, reducing the club's projected tax bill by at least a third even after James' new deal, Smith's looming signing and the July addition of Mike Dunleavy in the wake of the free-agent departures of Matthew Dellavedova and Timofey Mozgov.

Last season, when the luxury-tax threshold was $84.7 million, three other teams incurred eight-figure tax bills along with Cleveland. The paid $19.9 million in taxes, followed by the Golden State Warriors ($14.8 million) and theOklahoma City Thunder ($14.5 million).

The Cavs spent roughly $160 million last season in salary and taxes combined. Yet that outlay -- unlike similar riches spent in vain in recent years by theBrooklyn Nets and New York Knicks that netted virtually no return in terms of playoff success -- Cleveland's approach delivered the intended value when the James-led Cavs became the first team in NBA Finals history to overturn a 3-1 series deficit to win it all.
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http://www.espn.com/blog/marc-stein/post/_/id/4553/cavaliers-tax-bill-on-course-to-drop-35-percent
 
Love this guy! long overdue. Much respect Mr Gilbert,your a day one,and a real one!
 
That's an amazing move. It'll be interesting to see what they look like and how much they sell for on eBay. ;)
 
^ Has anyone seen a place to get a 'replica' of one of those yet? I'd be especially curious how much the ones being given to employees cost and whether or not someone can replicate them for sale. I'm really interested in getting my hands on one.
 
It's a great move but I'd feel pissed if I were the players. Now there will be hundreds and no longer unique unless they are slightly different than the players.
 
T C said:
It's a great move but I'd feel pissed if I were the players. Now there will be hundreds and no longer unique unless they are slightly different than the players.
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Not sure why the players should care...they're still getting the rings they earned.

Besides, the "common" ring won't be nearly the same thing that they receive.
 
T C said:
It's a great move but I'd feel pissed if I were the players. Now there will be hundreds and no longer unique unless they are slightly different than the players.
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Read the article. The rings are going to be different.
 
T C said:
It's a great move but I'd feel pissed if I were the players. Now there will be hundreds and no longer unique unless they are slightly different than the players.
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I hate when people don't read.

The rings are going to be so much more different than the players/coaches.
 
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