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Tristan Thompson

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NoTitleTown said:
It's not ironic at all that Dan setup the tax situation and now has to deal with it.

The tax situation still benefits him because it's his leverage to keep salaries reasonable--even while it hurts him in small ways. Without a doubt it would cost him MUCH more to pay players without a cap and tax scenario. Can you imagine how much LBJ is worth in a non cap and tax NBA?
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It also gives Gilbert power as one of the wealthier and more willing to spend owners. The tax handcuffs teams like the Heat and Bulls because they have owners less willing to pay the taxes. It may hurt him financially, but it also gives him an advantage because he's will to take the hit.
 
Hydroponic3385 said:
Even though, you know, Gilbert IS paying for it. We're already nearing/setting records for highest payroll and taxes. God forbid the Cavs want to only overpay Tristan by a certain amount, rather than an even more absurd amount. :chuckle:
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IfYou mean Gilbert is paying for it by allowing it to cut into team revenue.

I am very doubtful the Cavs bring in less than 250 million this season.
 
Cavatt said:
Personally, I don't think it is weird to have to pay more for a team that is this stacked in talent.
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Agreed. In fact I don't think anyone here would think it's weird at all. And I believe Gilbert & the Cavs have very much already demonstrated their willingness to pay way more for a team, and they will be willing to pay even more than that once TT finally signs his new contract. I just find it reasonable that the Cavs GM/owners draw the line somewhere with players that are not remotely near all-star caliber.
 
Tornicade said:
IfYou mean Gilbert is paying for it by allowing it to cut into team revenue.

I am very doubtful the Cavs bring in less than 250 million this season.
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Tickets are essentially sold out this year already. Local TV and National TV doesn't change by .01 if they sign or don't sign TT.

And just where are you getting 250M in revenues? BRI is 140M/team for this year. The 27M/ the Cavs get from Fox Sports Net this year for regional TV isn't that big (Lakers get 150-200M/yr depending on ratings).

At the deal TT TURNED DOWN, his salary was going to be $14M the 1st year. With the Cavs already in the max tax bracket of $3.75 for non-repeaters, the cost to the team would be 66.5M FOR THIS YEAR ALONE. Thats almost the entire salary cap (70M). If you jump the salary to TTs asking he would cost the Cavs >$83M this year.

The Cavs do big business. But thats just BAD BUSINESS. No one pays role players 50% of gross revenues.
 
Cavs revenues were around $216 million last year, I think. But even with such high revenues, their earnings before taxes, etc. couldn't have been more than $60 million (it was ~$20 million in 2014 on $150 in revenues).

Are the Cavs willing to cut their EBITDA by over two-thirds this year to overpay Thompson? Remember, there are people that have ownership stake in Cavs profits that are far less rich than Gilbert.
 
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HurricaneKid said:
Tickets are essentially sold out this year already. Local TV and National TV doesn't change by .01 if they sign or don't sign TT.

And just where are you getting 250M in revenues? BRI is 140M/team for this year. The 27M/ the Cavs get from Fox Sports Net this year for regional TV isn't that big (Lakers get 150-200M/yr depending on ratings).

At the deal TT TURNED DOWN, his salary was going to be $14M the 1st year. With the Cavs already in the max tax bracket of $3.75 for non-repeaters, the cost to the team would be 66.5M FOR THIS YEAR ALONE. Thats almost the entire salary cap (70M). If you jump the salary to TTs asking he would cost the Cavs >$83M this year.

The Cavs do big business. But thats just BAD BUSINESS. No one pays role players 50% of gross revenues.
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This has been said 65 million times (one for each dollar tristan is worth), but you can't blame all of the tax hit on Tristan's contract. Everyone contributes to the total bill.
 
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.
 
mds said:
This has been said 65 million times (one for each dollar tristan is worth), but you can't blame all of the tax hit on Tristan's contract. Everyone contributes to the total bill.
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Its called marginal utility. The team without TT costs the Cavs 130M(ish, haven't worked out the math). The team WITH TT is 210M(ish). If that 80M went directly into YOUR pocket would you seriously rather have TT on the team?

This is the entire reason this contract is getting held up. RP wants every penny possible and that penny costs Dan Gilbert 5 cents.

This was a known eventuality to LeBron. Its the exact conversation he had with Gilbert before he came back. He is the one that needs to go up to Dan's office and remind him of the promises that were made. And I bet he doesn't sign early again...
 
The really hard part is that everyone knows the cap is going to explode, so a high tax bill this year gets dramatically lowered next which makes it really complicated.

The 5 yr 80 M does look like it will be a deal in 2 years, but the fines are so heavy this year it is very hard to justify. Maybe that is why a long term deal is not realistic. Keep in mind though that a short term deal so that TT can renegotiate in 2-3 years is also not something the Cavs are interested in.

I agree that TT would be overpaid this year, However by demanding a 5 year deal they are asking him to take less overall.

They wanted to have their cake and eat it too.
 
HurricaneKid said:
It
He is the one that needs to go up to Dan's office and remind him of the promises that were made.
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Which were....?

I'm really skeptical that Dan made any promise that, fairly interpreted, required him to offer a max contract to an RFA who didn't sign any offer sheets.

I've thought all along that the most likely reason LBJ signed is because the Cavs extended an offer sheet to TT and promised LBJ they'd match any offer. But i bet that's the extent of it.
 
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HurricaneKid said:
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.
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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.
 
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Cavatt said:
The really hard part is that everyone knows the cap is going to explode, so a high tax bill this year gets dramatically lowered next which makes it really complicated.

The 5 yr 80 M does look like it will be a deal in 2 years, but the fines are so heavy this year it is very hard to justify. Maybe that is why a long term deal is not realistic. Keep in mind though that a short term deal so that TT can renegotiate in 2-3 years is also not something the Cavs are interested in.

I agree that TT would be overpaid this year, However by demanding a 5 year deal they are asking him to take less overall.

They wanted to have their cake and eat it too.
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Says who? They aren't interested in a 2-3 year deal in which Thompson makes just as much in those years as he would in a five year max deal. Who in the hell would be? That doesn't solve the luxury tax issue at all.
 
I think that we would have this holdout regardless of the tax. Teams dont like to pay energy guys with intangibles. we saw the same thing with AV.

These guys DNA is to compete and do the hard and gritty stuff. its not surprising they would take the same approach when it comes to their contracts . espeially the most criticaly contract of their career. coming off the rookie contract.

Is still think we see Thompson sign for a 1-2 year contract or a 5 year 83-87. . Thompsons outplayed and was more effective than all his higher price counterparts he faced in the playoffs. potential for the 24 year old is undeniable..the wquestion for the Cavs is how long and how much better Thompson can be at his peak.
 
Tornicade said:
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.
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I'm not really seeing this as the Cavs being in a bind for 1 year or 2, and then suddenly their luxury tax problems gone.

We can get Andy off the books fairly soon, but if we keep Mozgov we're looking at a contract that's going to be roughly as big as Tristan's deal. Then you have LeBron making approximately 38 million starting I think in 2017-2018. Then you factor in that the Cavs will probably have to start paying Delly something a bit more than the minimum starting in 2016-2017.

Tristan wants to be a Cav and he also wants to sign a long term deal so that the Cavs are basically stuck with him. The bigger the dollar amount of the deal, the more untradeable he is. Once he gets his big long term deal, the Cavs will have to structure everything that comes thereafter around him.

Under the circumstances, there doesn't seem to be a realistic way to unload Tristan. The demands of a max deal are just insult to injury.
 
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