To be fair, it would be to turn a 50M profit into a 30M loss. At $3.75 per dollar spent, the lux tax is really punitive.
You would have to get mighty creative to justify paying LOVE that kind of money. But for a player like TT? There is no justication. At all.
I'd LOVE to see a breakdown of Cavs revenues. That is proprietary, privately held data and isn't widely available. I'd be shocked if it were that high. Ticket revenues can't be over 25M. Regional TV is 27M (turns out thats below the league avg with LAL and NYK having massive deals due to the size of their markets). National TV is split evenly between the 30 teams and is 31M/ this year (930M/30). LeBron wasn't even a top 5 jersey last year so merchandise doesn't seem like it could be nearly that high (due to wearing same number he did for a 8 years). I have no idea how it could possibly be that high given these knowns.
Increase Ticket prices, Increase concession cost, increase advertising.
These are all things that having a team of superstars allow one to do.and smart scheduling of the RDI
The Cavs increased spending last season and increased their profit as well.
also the Cavs arent in business for one year.
Cost absorbed this season and to less extreeme next season is temporary as the new TV deal kicks in and the BRI for players is expected to be around 100 million cap with a big spread before you get to the luxury tax.
do the Cavs try to save tax money when they can ... sure(8-20 million difference between 14 million for Thompson next season compared to 16.
but the Cavs can use their RDI for next season in preparation for increaseing profits uner the TV deal as their cores is signed at value 3 of 5 of those years.
Cavs really benefited as well from Irving not qualifying for the 30 max.
also the way the NBA is set up structurally teams can show losing money on their tax returns but not really.
needless to say here is that the Cavs were profitable during the four years of losing and made more than they had the last 4 years last season.
whats at stake here is lowering net revenue or profit for 1 season or 2 and being in position to be strong financially the next five years.
Edit. I find it amusing someone stating Lebron is so conscious or cares so much about the teams salary tax that he has declined a long term deal to maximize his salary. This isnt a condemnation of james. its good business sense. its just pointing out a flaw in the argument.