Would ‘Supertax’ Force Orlando Magic to Release Gilbert Arenas?

by October 04, 2011

Should the owners’ proposed “supertax” make it into the new CBA, the Orlando Sentinel argues that the Magic would be wise to shed Gilbert Arenas’ monster contract at their earliest convinience: “A supertax essentially would take the dollar-for-dollar luxury tax system from the recently expired CBA and make that tax much more punitive. A team would have to pay $2 in luxury tax for every dollar over $70 million in payroll, $3 for every dollar over $75 million in payroll and $4 for every dollar above $80 million in payroll. Of course, it’s not set in stone that a supertax would be structured like this. But if it is, it probably would be cost-prohibitive for the Magic to continue to carry Arenas. He is due $19.3 million in salary in 2011-12; $20.8 million in 2012-13 (if he doesn’t opt out before July 1, 2012) and $22.3 million in 2013-14, according to HoopsWorld.com. But a new CBA could throw the Magic a badly needed lifeline. A new CBA could include a provision that would allow each NBA team to ‘amnesty’ one player off of its current roster and — here’s the critical part — have that player’s salary come off of not just the team’s salary-cap figure, but also its luxury-tax figure. The Magic would still have to pay Arenas his full salary of $62 million over the next three years if it uses an amnesty clause on him. But the team also could save millions of dollars in luxury-tax payments by releasing him.”