The 2017 NBA Draft

Let me give you my impressions/reactions to the NBA Draft last night:

1. The biggest winner of the night was Minnesota.  The Wolves acquired Jimmy Butler in a trade that sure does not seem as if it cost the Wolves a lot.  Butler is one of the 20 best players in the league and with the rest of the young talent in Minnesota, the Wolves are now a playoff factor in the NBA West.
2. Another big winner from last night – – with two important “Ifs” attached – – was Philly.  The Sixers took Markelle Fultz as anticipated.  Now, IF Fultz is as good as advertised and IF Joel Embiid and Ben Simmons can stay healthy, the Sixers have built themselves a really good young roster core.
3. For the moment, a big winner from last night was Sacramento.  Using a trade to acquire 2 picks, the Kings got 4 very talented players in De’Aaron Fox, Justin Jackson, Harry Giles and Frank Mason.  Now we must wait to see how the Kings will screw all of that up; remember, this is the franchise that puts the “fun” in dysfunctional.
4. A big winner and a big loser at the same time from last night was New York.  The Knicks win because they did not trade Kristaps Porzingis; the Knicks lose because they did not trade Carmelo Anthony.  The Knicks made draft picks but that does not matter nearly as much as the two trades that were not made.
5. A big loser last night was Chicago.  The Bulls traded away a star in Jimmy Butler and got in return Zach Levine (coming off a “horrific knee injury”), Kris Dunn (coming off a mediocre season) and a draft pick they used to take Lauri Markaanan (Ho-hum…).  Then to put icing on the cake, they made a 2^nd round pick and sold that pick for cash to the Golden State Warriors.  That pick was Jordan Bell and he is a big winner from last night going to a great team in Golden State instead of a miserable team in Chicago.

Yesterday, the announcement came that the Raiders and QB, Derek Carr, had reached an agreement on a contract extension.  The deal is billed as 5 years and $125M with $40M of that money guaranteed as of the time of the signing and with the possibility of $70M being guaranteed as the contract moves forward.  In normal circumstances, NFL contracts – which are never fully guaranteed mainly due to the injury potential in the sport – teams and players “back-load” the contracts to make them seem longer and bigger than they really are.  I often call those late years of contracts “ego massaging years” in that they look great at the time of the announcement of the deal but they never really occur.  For most players, they need to seek a lot of “front-loading” in the contract in order to assure that those “big-time dollars” actually show up in their bank accounts.

Derek Carr may be in a situation that is very rare in the NFL: he may want to “back-load his contract” and maybe postpone much of that $40M guaranteed money for several years.  Let me explain:

• Carr currently is employed by a team in California and is subject to California taxation.  If I read the California Tax Service Center website correctly, the marginal state income tax rate on incomes in the millions of dollars is 13.3%.  That is over and above the 39.5% marginal tax rate Carr will pay to Uncle Sam.
• For purposes of simplicity, let me assume for a moment that the 5-year $125M contract is paid out at $25M per year.  It surely is not, but that assumption will be illustrative.
• If that were the case, Carr would owe the IRS about $9.5M in tax and then he would owe the State of California another $3M in tax.
• A couple of years from now, Carr will be employed by a team in Nevada where there is ZERO state income tax.  He would still have to pay Uncle Sam, the that other $3M or so that he used to send to the Governor’s Mansion in Sacramento can stay in his bank account.  [Aside:  Seven states in the US do not levy income taxes; they are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.]
• In this particular case, Carr might be in a better financial state by deferring large chunks of that income until he moves to Las Vegas.

There was another NFL contract announced yesterday with none of the fanfare of the Derek Carr deal.  It is nowhere near as large; in fact, my guess is that Derek Carr will make more in a signing bonus that this contract will pay out over its lifetime.  Nonetheless, it may be just as significant for the player and the team.

• The New England Patriots signed linebacker David Harris who had recently been cut by the NY Jets after their OTAs.  Harris is “long in the tooth” but he still has time before he passes his “sell-by date”.
• The Pats love veteran players and they signed Harris to a 2-year deal for a nominal $5M.  With incentives met, it could escalate up to $6.75M; the total guaranteed money is up front and amounts to $1.25M.

According to reports, the Jets approached Harris after releasing him about re-signing with the Jets but that they low-balled him and would not match the Pats’ offer.  Unless, Harris has lost it all over this off-season, this is another contractual coup for the Pats – – and even if Harris cannot play a lick, all it would cost the Pats is the $1.25M guarantee…

Finally, here is a comment by Brad Dickson in the Omaha World-Herald:

“The NFL has reinstated touchdown celebrations. The Cleveland Browns plan to work on one just in case it’s necessary.”

Burt don’t get me wrong, I love sports………