The cumulative effects of the luxury tax

One of my friends in the media hit me up today for information on the all-time luxury tax standings. I whipped up a spreadsheet showing each team’s luxury tax payments in each year, and sent it off to him.

After that I started to think a little more about the topic. The spreadsheet I did for my friend just showed the amounts each team paid in every season for which there was a tax. But that tax money (well…a lot of it) is distributed back to the non-taxpaying teams. So what’s the cumulative net effect of the luxury tax — money paid netted against money received?

I got to work on the problem, and what you see here is the result. In the table below money paid by teams is in red and money received by teams is in green. Under the 2005 and 2011 agreements teams were either taxpayers or beneficiaries; however under the 1999 agreement teams could be both, and the figures you see represent their net payment or receipt.

At the right of each row is the team’s cumulative total. For example, the Hawks received a cumulative $17.4 million from the luxury tax system over the years, while the Celtics paid a cumulative $32.8 million.

At the bottom are the totals for each season — money paid by teams into the luxury tax fund, money distributed back to teams, and money kept by the league for “league purposes.”

All amounts are $millions.

Net Tax Payments 2002-2012
1999 CBA 2005 CBA 2011 CBA
Team 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total
ATL $0.0 $3.7 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.7 $17.4
BOS $0.0 $6.0 $1.4 $0.0 $2.4 $1.9 $8.2 $8.3 $14.9 $5.7 $7.4 $32.8
BRK/NJN $0.0 $5.8 $9.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $1.2
CHA $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
CHI $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
CLE $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $14.0 $13.7 $15.9 $2.4 $0.0 $25.5
DAL $0.0 $18.5 $25.0 $0.0 $17.3 $7.2 $19.6 $23.6 $17.6 $18.9 $2.7 $150.4
DEN $0.0 $6.0 $5.4 $0.0 $2.4 $2.0 $13.6 $2.9 $5.5 $2.4 $0.0 $2.0
DET $0.0 $6.0 $3.5 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $25.9
GSW $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
HOU $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $0.8 $0.0 $24.6
IND $0.0 $3.6 $2.7 $0.0 $4.7 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $10.2
LAC $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
LAL $0.0 $10.0 $8.4 $0.0 $2.4 $1.9 $5.1 $7.2 $21.4 $19.9 $12.6 $80.3
MEM $0.0 $7.6 $5.4 $0.0 $3.7 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $8.1
MIA $0.0 $5.1 $5.4 $0.0 $2.4 $1.9 $8.3 $2.9 $3.0 $2.4 $6.1 $7.5
MIL $0.0 $4.7 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $17.1
MIN $0.0 $6.0 $17.6 $0.0 $2.4 $1.0 $3.1 $2.9 $3.7 $2.4 $0.0 $10.1
NOH $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
NYK $0.0 $24.4 $39.9 $0.0 $37.2 $45.1 $19.7 $23.7 $5.2 $2.4 $0.0 $192.8
OKC/SEA $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
ORL $0.0 $6.0 $5.4 $0.0 $7.8 $1.9 $3.1 $2.9 $11.0 $20.1 $0.0 $19.6
PHI $0.0 $12.8 $5.1 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $1.5
PHX $0.0 $0.9 $5.4 $0.0 $2.4 $1.9 $3.9 $4.9 $5.0 $2.4 $0.0 $0.8
POR $0.0 $52.0 $28.8 $0.0 $2.4 $1.9 $3.1 $5.9 $3.7 $2.3 $0.0 $77.9
SAC $0.0 $17.4 $13.1 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $14.1
SAN $0.0 $5.5 $5.4 $0.0 $0.9 $0.2 $3.1 $2.9 $8.8 $2.4 $2.5 $6.9
TOR $0.0 $1.2 $4.1 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $11.1
UTA $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.1 $5.0 $0.0 $13.6
WAS $0.0 $6.0 $5.4 $0.0 $2.4 $1.9 $3.1 $2.9 $3.7 $2.4 $0.0 $27.8
Paid: $0.0 $169.2 $154.1 $0.0 $71.6 $55.5 $92.4 $87.3 $111.4 $72.7 $32.0 $846.2
Distrib: $0.0 $94.0 $102.1 $0.0 $57.6 $47.5 $68.2 $66.7 $70.3 $55.2 $0.0 $561.6
League: $0.0 $75.2 $52.0 $0.0 $14.0 $8.0 $24.2 $20.6 $41.1 $17.5 $32.0 $284.6
Notes: No tax in 2002 or 2005 (leaguewide tax threshold was not triggered)
100% of the 2012 tax revenues was used to fund the revenue sharing plan.
In 2003 and 2004, tax receipts (if any) are netted against tax payments (if any)

6 thoughts on “The cumulative effects of the luxury tax

  1. Pingback: NBA Info - February 2013 - Page 5

  2. sickchangeup

    Fascinating that the Bulls have received max money.

    Also – why the $0 distributed total for 2012?

    1. lcoon Post author

      It’s at the end — all of the tax money in 2012 was used to fund the revenue sharing program, and none of it was redistributed to teams.

    1. lcoon Post author

      It’s not public, but then again, the luxury tax details aren’t public either. With revenue sharing, 2011-12 was the first season of the program, and the reconciliation always occurs the following February — in other words, the revenue sharing details will be determined this month. Once I get them, I’ll write something about it — either here or at ESPN.com.

  3. Mark

    Nice info again Mr. Coon. Obviously, if you’re Dallas or LAL, you actually can buy a championship. And if you’re the Knicks, don’t hire Isiah :-)

    But it appears it is working. Looking at the last three years, the tax payments are coming down, so the luxury tax is becoming a hard cap.

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