By David Aldridge, TNT Analyst
Posted Jul 16 2009 8:51PM
Venturing deep into the NBA's luxury tax, the Utah Jazz have decided to match the four-year, $32 million offer sheet given to forward Paul Millsap by the Portland Trail Blazers last week, a source close to the Jazz confirmed Thursday.
The decision, which will be made official on Friday, returns Milsap to the Jazz, where he will likely become the starting power forward next season, and all but ensures that the Jazz will trade the current starter, Carlos Boozer, in order to alleviate what could be millions in potential luxury tax payments after this season. Including Milsap's first-year salary and prorated portion of his signing bonus, he will count for $7.7 million next season against Utah's cap. That figure, combined with the Jazz's returning players and first-round pick Eric Maynor's first-year salary, will push Utah's salary commitments next season to more than $81 million.
If Utah doesn't reduce its salary by the end of next season, it would be on the hook for more than $11 million in luxury tax payments, based on next year's projected tax threshhold of $69.9 million.
But Utah is hoping to get at least some tax relief by trading Boozer, who is in the final year of his contract at $12.7 million, and taking back less salary and/or draft picks in return. Both the team and Boozer have mutually agreed that it would be best to part ways after this season, and several teams, including Miami and Chicago, have expressed interest. By taking on players whose contracts are not guaranteed, or getting a third team involved which would take on one or more contracts in exchange for cash or picks, Utah could shave a few million dollars off of its tax bill before the league comes collecting next year.
Under the terms of the deal negotiated by Portland, Utah has to pay Millsap $10.3 million (a combination of his $5.6 million signing bonus and $4.7 million in salary, which is 80 percent of his first-year salary of $6.3 million), within a week of the contract being finalized. Portland structured the contract that way in hopes of making it too difficult for Utah to match.
But the Jazz, in good financial shape going forward with little long-term debt, decided it could write the check. The Salt Lake Tribune had reported this week that the Jazz had already consulted with local banks on the terms of a short-term loan that would cover the amount.
The decision came after general manager Kevin O'Connor met with team ownership on Thursday. The Miller Family, whose patriarch, the late Larry Miller, owned the team until his death earlier this year, remains in control of the franchise. The family had already indicated that it was willing to pay tax this coming season, knowing that Boozer, center Mehmet Okur and guard Kyle Korver all decided not to opt out of their current deals and play the final season of their respective contracts in Utah. The Jazz reached agreement with Okur last week on a two-year, $21 million extension.
The Blazers will now, once again, have $7.7 million in cap room to spend. They originally thought they had a deal with Orlando free agent forward Hedo Turkoglu, but Turkoglu reneged at the 11th hour and agreed to a five-year, $53 million contract with Toronto. Portland then turned to Milsap, who had stepped into the starting lineup when Boozer was hurt for much of last season.
Now, the Blazers have to decide whether to turn their attention to the remaining pool of free agents, including Lakers forward Lamar Odom--whose contract talks with Los Angeles have ground to a halt after the team pulled its offers from the table Tuesday--or keep the money available in order to do an uneven trade later this summer or before next year's trade deadline. Given that the team will likely not have cap room for the foreseeable future, with emerging stars Brandon Roy and LaMarcus Aldridge both due for significant raises after the coming season, there is strong sentiment within the Portland organization to use the money now on another player that can help the Blazers get over the top in the Western Conference.
SI.com was first to report Utah's decision to match.
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