Sixers Facing Tight Financial Squeeze in NBA's Buyout Market

Now that the dust has settled on the NBA trade deadline and Dominick Barlow has a new two-year, $6.8 million contract, the Sixers have a clear picture of where they stand financially heading into buyout season.

If they aren't willing to go into the luxury tax, it isn't great.

The Sixers currently sit less than $1.6 million below the $187.9 million tax line and $3.75 million under the $195.9 million first apron. (Confused by the difference? Thank Paul George's $5.9 million tax variance credit from his suspension.) They still have two roster spots to fill once Charles Bassey and Patrick Baldwin Jr.'s 10-day contracts expire.

As of Sunday, a rest-of-season veteran-minimum contract costs nearly $845,000. It goes down by roughly $13,200 per day between now and the end of the season.

Bassey and Baldwin's contracts expire on Feb. 14, and the Sixers will need to fill both of their open roster spots before any of their two-way players can play for them again. If they signed someone to a rest-of-season minimum contract on Feb. 15, it would cost them roughly $750,000.

The Sixers have just enough space under the luxury tax to fit two more rest-of-season minimums. If they signed both on Feb. 15, they'd finish less than $72,000 under the luxury tax.

The Sixers' final game before the NBA All-Star break is Feb. 11, and they don't reconvene again until Feb. 19. They'll likely let Bassey and Baldwin's 10-days expire and explore their buyout options throughout the week off.

If they aren't willing to go back over the luxury-tax line, though, their options are fairly limited.

How the tax impacts the Sixers

This is the point of the program where we feel compelled to remind you: Nothing other than Sixers ownership is preventing the Sixers from going into the tax.

In their defense, the Sixers weren't the only teams that ducked the tax at the deadline. The Boston Celtics pulled off a creative series of moves dating back to the offseason to get what could have been a $500 million payroll below the tax. The Orlando Magic, Denver Nuggets and Toronto Raptors all embarked upon cost-cutting measures as well.

The league's latest collective bargaining agreement reduced the luxury-tax rates for teams that aren't more than roughly $10 million above the tax line, so finishing slightly above the tax isn't financially punishing. The bigger issue—and the one that the Sixers continue to punt down the road—is the repeater tax.

Teams that finish less than $10 million below the tax won't ever pay more than $1.25 in tax per dollar that they're over. Repeat taxpayers initially pay $3 in tax per $1 that they're over, and that rate quickly jumps up to $5.5 million, then $6.75 million.

If the Sixers are already focusing more of their attention on the Tyrese Maxey and VJ Edgecombe Era—when Paul George and/or Joel Embiid are no longer on the team—they might prefer to pause the clock on the repeater tax as long as possible. They've now gone under the tax four straight years at the deadline, and the Jared McCain deal was at least more excusable than what they did last year.

Team president Daryl Morey told reporters that he did have authority to go over the tax for the right deal, but the right deal never presented itself at the trade deadline. Instead, the Sixers conveniently finished almost the exact amount below that they needed to when considering their rest-of-season roster moves.

How the aprons impact the Sixers

Morey kept mentioning the first apron as the justification for the Gordon deal, which makes sense. They're only $3.75 million below the first apron in the wake of Barlow's contract.

With Gordon's $2.3 million contract back on their books, the Sixers would be back over the tax line and only $1.46 million away from the first apron. They would have to slightly stagger when they signed their rest-of-season contracts just to stay below the apron.

Well, they would if they were hard-capped, anyway. They did use their mid-level exception to sign Barlow to his new deal, but it's unclear whether they used the non-taxpayer MLE (which would hard-cap them at the first apron) or the taxpayer MLE (which would hard-cap them at the second apron). The taxpayer MLE can cover two-year contracts with 5 percent annual raises, which Barlow's fits into.

That's going to be the tell from the Sixers on the buyout market. If they sign anyone to a three- or four-year deal, that means they used the non-taxpayer MLE and will be hard-capped at the first apron. If they don't sign anyone beyond a two-year contract, they likely used the taxpayer MLE.

If the Sixers aren't willing to exceed the tax, it won't matter either way. They might be able to offer slightly more than a prorated veteran minimum with the remainder of their taxpayer MLE, but their proximity to the tax line is the bigger issue. They didn't get under the tax at the trade deadline by accident, after all.

Besides, Jabari Walker or someone else on a two-way contract might be the only type of player available at this time of year who'd be interested in signing a longer-term contract. Otherwise, most veteran buyout options sign a one-year, rest-of-season minimum and then reevaluate their options in free agency a few months later.

In all likelihood, the Sixers will either just sign players via the minimum exception or spend the rest of their MLE up to the tax line but no further. They aren't likely to throw a massive $5-6 million offer at a player on the buyout market, though. Their proximity to the first apron alone makes that impossible.

Unless otherwise noted, all stats via NBA.com, PBPStats, Cleaning the Glass or Basketball Reference. All salary information via Spotrac and salary-cap information via RealGM.

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