How DeRozan’s addition affects the Kings’ luxury tax situation in the NBA Originally appeared in NBC Bay Area Sports
After the Kings Reportedly acquired DeMar DeRozan In a three-team sign-and-trade deal, where exactly does that leave Sacramento when it comes to the NBA luxury tax?
DeRozan has reportedly signed a three-year, $76 million contract with the Kings, TNT’s Chris Haynes reported Saturday. Adrian Wojnarowski of ESPN The three-year deal is worth $74 million, part of a deal that brings Sacramento close to the $170.8 million luxury tax threshold for the 2024-25 NBA season.
The Kings are currently $5.1 million below the luxury tax and will avoid the threshold if they sign two players under the veteran minimum. Bobby Marks of ESPN reported on Saturday.
Sacramento offseason with DeMar DeRozan
The Kings are $5.1 million below the tax and will avoid the threshold once they sign two veteran players at the minimum. image.twitter.com/7Qd1mnYO0g
— Bobby Marks (@BobbyMarks42) July 7, 2024
Including potential bonuses for DeRozan, Domantas Sabonis and Trey Lyles (which Marks said the trio of players would be unlikely to reach), Sacramento still sits below the luxury tax threshold with a projected 2024-25 salary of $168.9 million.
After a busy offseason that included the reported signing of DeRozan and Holding Malik MonkThe Kings still have an extremely valuable asset in the mid-level exception for non-taxpaying players, which could prove tempting to any potential free agents still on the market.
However, if Sacramento decides to use the mid-level exception, the Kings would have a hard cap hit of $178.1 million on the first team.
Considering the way teams that repeatedly fall under the luxury tax are punished by the NBA’s new collective bargaining agreement, it would likely take an attractive player to force Sacramento to give up its clear path to remaining under the tax even after its reported acquisition of DeRozan.
For now, general manager Monte McNair and Kings management can take a deep breath and enjoy the consequences. The warm welcome Sacramento’s decision on DeRozan was welcomed by fans in 916.