Cavs owner Dan Gilbert has mostly been willing to spend big money in the LeBron return era. The Cavaliers have had one of the highest payrolls in the league since James re-joined the team four years ago.
Well, if James leaves, the gravy train is expected to slow down, as Joe Vardon is reporting that Gilbert will not pay the luxury tax if LeBron James leaves the team next season:
The luxury tax is again an issue, and it is of great importance to both sides as the Cavs barrel toward Thursday’s trade deadline.
With a $134 million payroll this season, the Cavs are way over the NBA’s $119.3 million luxury-tax line. Because they’ve been over the line for several years in a row (Gilbert promised, remember), the Cavs will owe $43 million in tax penalties this summer.
If James is not here next season, sources said, Gilbert will not want to pay anything in tax penalties. In that case -- a James departure via free agency -- the Cavs may strip down and start over.
Well, that’s hardly surprising. The Cavaliers are just under $15 million over the luxury tax threshold, per Spotrac.com. It’s also worth noting that it won’t be particularly hard to get under that threshold assuming LeBron James opts out of his player option to leave.
The luxury tax threshold is currently set at $119 million, which is about $20 million over the current salary cap. If James opts out of his $35 million cap figure for next season, the team will only have about $87 million in committed salary. That doesn’t account for any re-signings or other roster additions, but that’s still a far cry from $119 million.
A teardown may be coming, but if the team is just looking to skirt the tax, it probably won’t be that hard barring some of sign-and-trade that leads to a lot of salary coming back. It would likely mostly include simply not re-signing Isaiah Thomas, Derrick Rose, Jeff Green and Channing Frye to large money deals.
If the team makes a big swing on the trade market, it’ll be a little tougher, but as long as the team is bringing back positive trade assets, then they should be able to flip those deals if necessary.
Somebody like George Hill would likely be movable as a neutral asset at the worst, so as long as the Cavaliers aren’t taking any truly odious deals on while only sending out expirings in the process, then it should ultimately be a net neutral to their long-term cap sheet. We’ll see if Gilbert sees it that way.