When I heard the news that the Thunder are set to have a “$300 Million Payroll“ (and therefore will just HAVE to cut ties with Melo) – my first question was… How??
I knew that by Melo opting in, there was an easy $30 million there; then Russ probably is around $35/year; and George is about $30 as well… But where does the other $200+ million coming from?
Guys, I did the math and it’s a little complicated but if you’re interested in this AT ALL, here it is:
Okay, so there’s the breakdown of the first $158 million of the Thunder’s payroll. Great. I think we can all understand that part. But so now what? Now where does the remaining $140 MILLION dollars come from?
The NBA luxury tax works like taxes in America (you get taxed at a lesser percentage if you make less). So for every dollar they spent OVER the Luxury tax threshold of $123,733,000, they have to pay a penalty on… And since the Thunder are a repeat offender of this luxury tax, they actually owe even more.
For the first $5 million, they pay $2.50 per dollar they’re over. For the next $5 million, they pay $2.75. For the next $5 million, they pay $3.50. For the next $5 million, they pay $4.25 and finally, for any dollar over $20 OVER the threshold, they pay $4.75.
And since they have a salary of $158M, and the threshold is $123M, they are over by $35M… Here’s what that looks like for the Thunder right now:
So that $136M penalty PLUS the $158M salary gets you around $295M – which is fucking nuts!!
So I guess the $300M number (kinda) checks out, but my God… My next question is – where does all that money go?! Back to the league and then redistributed to the teams?? Just another rabbithole I’ll have to go down, but that’s for another day…