How DeRozan’s Reported Addition Affects Kings’ NBA Luxury Tax Status originally appeared in NBC Sports Bay Area
After the Kings reportedly acquired DeMar DeRozan in a three-team sign-and-trade, where exactly does that leave them when it comes to the NBA luxury tax?
DeRozan will reportedly sign a three-year, $76 million contract with the Kings, TNT’s Chris Haynes reported Saturday – ESPN’s Adrian Wojnarowski has the deal for three years and $74 million — as part of the move that will bring Sacramento close to the $170.8 million luxury tax threshold for the 2024-25 NBA season.
The Kings are currently $5.1 million under the luxury tax and will avoid the cap if they sign two veteran minimum players, ESPN’s Bobby Marks reported Saturday.
Sacramento’s off-season with DeMar DeRozan
The Kings are $5.1 million under tax and will avoid the cap once they sign 2 veteran players at minimum. pic.twitter.com/7Qd1mnYO0g
-Bobby Marks (@BobbyMarks42) July 7, 2024
Including potential bonuses for DeRozan, Domantas Sabonis and Trey Lyles — which Marks notes three players would be unlikely to hit — Sacramento would still fall under the luxury tax threshold with a projected total salary for 2024-25 of 168.9 million.
After a busy offseason that included the addition of DeRozan and keeping Malik Monk, the Kings still have an extremely valuable asset on the mid-level exception for non-contributors, which could be attractive to any potential free agents still on the market. However, if Sacramento decides to use this exception, its cap hit would be $178.1 million.
Given the way teams repeatedly subject to the luxury tax are punished in the NBA’s new collective bargaining agreement, it would likely take an attractive player to force the Kings to waive their clear path to remaining under the tax even after their alleged DeRozan acquisition.
For now, general manager Monte McNair and the Kings front office can take a deep breath and enjoy the consequences of the the warm welcome Sacramento’s move for DeRozan was welcomed by fans on 916.
