This is the third part in a series of offseason thoughts on the Chicago Bulls. Read the previous two:
Chicago Bulls Offseason Thoughts Part I
Chicago Bulls Offseason Thoughts Part II
According to reports, Pau Gasol and Carmelo Anthony may play together next season. Whether that happens to be in Chicago remains to be seen. First, let’s talk about the scenario where both of them end up on the Bulls. As I talked about in Part II of this series, for the Bulls to sign Carmelo, it is likely necessary for Taj Gibson to be traded. If the Bulls also want to add Gasol, trading Taj is a must.
In Part II of this series, I went over the Chicago Bulls financials. By amnestying Carlos Boozer, trading Taj Gibson, and trading Mike Dunleavy, the Bulls are looking at $25,699,047 in cap space. It is going to be tough to get Carmelo and Gasol for a combined salary of $25.7 million, but it is possible.
In the best case scenario, the Bulls sign Carmelo and Pau Gasol. There are some serious financial concerns. Nikola Mirotic has expressed interest in leaving Real Madrid for the NBA. The Bulls own his rights and he is going to be more expensive since he is no longer restricted to the rookie scale.
If the Bulls are in the luxury tax to end the 2014-2015 regular season, that will make 2 out of 3 years for them. After the 2012-2013 season the Bulls were $3,392,336 million over the luxury tax. When a team has been in the luxury tax for 3 out of the last 4 years, the repeater tax kicks in. If the Bulls sign Carmelo and Gasol (or any other major free agents), and add Mirotic for the MLE exception ($5,305,000 in 2014), it is highly likely they will be in the luxury tax for the foreseeable future.
Check out this chart from Larry Coon’s Salary Cap FAQ. Here are the tax rates beginning 2013-14:
| Team salary above tax level | Non-repeater | Repeater | |||
|---|---|---|---|---|---|
| Lower | Upper | Tax rate | Incremental maximum | Tax rate | Incremental maximum |
| $0 | $4,999,999 | $1.50 | $7.5 million | $2.50 | $12.5 million |
| $5,000,000 | $9,999,999 | $1.75 | $8.75 million | $2.75 | $13.75 million |
| $10,000,000 | $14,999,999 | $2.50 | $12.5 million | $3.50 | $17.5 million |
| $15,000,000 | $19,999,999 | $3.25 | $16.25 million | $4.25 | $21.25 million |
| $20,000,000 | N/A | $3.75, and increasing $.50 for each additional $5 million. |
N/A | $4.75, and increasing $.50 for each additional $5 million. |
N/A |
As you can see, the Bulls could be paying a ton of money in luxury tax in 2014-2015 and that would be significantly higher if they apply for the repeater rate after the 2015-2016 season.
Carmelo was at the United Center on Tuesday to meet with the Chicago Bulls. Tom Thibodeau road in the car with him from the airport and Derrick Rose participated in a workout to show his health. While there are many suitors for Carmelo, the Bulls are definitely in the running.
If the Bulls strike out on Carmelo, Kevin Love, and whatever other star players they may attempt to acquire, Mirotic is a serious possibility. If these reports turn out to be true, the Chicago Bulls could end up signing Mirotic to the Mid Level Exception or something similar, which is $5,305,000 this upcoming season.
This could turn out to be a very good deal for the Bulls, considering how much a guy like Chandler Parsons is expected to fetch. If Mirotic lives up to the hype, they will have a big time player locked up with an extremely reasonable contract. That provides some serious flexibility.
My comments on luxury tax and the repeater rate apply even if the Bulls don’t get Carmelo or Pau Gasol. Expect the Bulls to make Jimmy Butler the qualifying offer of $3,178,821, which will make him a restricted free agent for the 2015 offseason. I could see a team offering him $8 million per year at the very least if he continues to show improvement. Consider that Avery Bradley, who is a very similar type player, and who was a restricted free agent this summer, recently signed a 4 year, $32 million dollar contract with the Celtics.
The Bulls are likely to be players in 2014 free agency regardless if they sign Carmelo or not. Despite his character issues, I believe Lance Stephenson is an outstanding player who could fit well with the Bulls. He is not going to be cheap, neither is fellow restricted free agent Chandler Parsons. Other guys the Chicago Bulls could look at are Paul Pierce, Boris Diaw, Luol Deng, Channing Frye, Ramon Sessions, and Anthony Morrow.
The most likely scenario at this point is the Bulls sign Mirotic and he comes over this season. After Carlos Boozer is amnestied, expect him to fetch around $5 million. Whatever he signs for, is going to be subtracted from the $16,800,000 that the Bulls will have to pay him – off the books. That could lead the Bulls to be spenders in this years free agency.
If the Chicago Bulls spend some serious money this offseason and they want resign Jimmy Butler next year plus bring Mirotic to add to Derrick Rose and Joakim Noah, they could be paying a lot of money in luxury tax. While they won’t be on pace to lose $144 million, like the Nets did this season, Jerry Reinsdorf could end up forking over some serious cash.
The Bulls were in the luxury tax for the first time ever in 2012-2013 their track record shows they will do what they can to avoid it. Ultimately, I see the Bulls doing whatever they can to avoid the repeater tax, but building a championship team is costly. GarPax and the Bulls ownership have likely considered all of this, so it should be interesting to see what happens during the rest of the 2014 offseason.
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