Los Angeles Clippers Save $110 Million by Waiving Eric Gordon?
The Los Angeles Clippers have waived Eric Gordon to save $110 million in tax payments. This move was a strategic decision made by the Clippers brass, and it has already generated a lot of buzz across the NBA world.
The Clippers have been a team of controversy in the last few years with their star-studded lineup and their recent acquisition of Kawhi Leonard and Paul George. Adding Eric Gordon to the mix would have made their team even more stacked – but it would have come at a huge financial cost.
In this blog post, we will take a closer look at the Clippers’ decision to waive Eric Gordon and the implications it has for their future as a team.
What is a Luxury Tax Actually?
Before we dive into the financial decision-making process behind the Clippers’ move, it is important to understand what a luxury tax is. In the NBA, a luxury tax is essentially a fine that teams have to pay for going over the salary cap.
The more a team goes over the salary cap, the higher the luxury tax they have to pay.
Why Did The Clippers Waive Eric Gordon?
Eric Gordon is a solid player. And the Clippers would have been lucky to have him on their roster. However, with the recent acquisitions of Kawhi Leonard and Paul George, the Clippers were already over the salary cap.
Adding Eric Gordon to the mix would have pushed them even further over the limit. In turn, this would have resulted in them having to pay a hefty luxury tax.
The Clippers would have had to pay $2.50 for every dollar above the luxury tax threshold. It comes out to be around $2.7 million per year for the next three years. By waiving Eric Gordon, the Clippers have saved $110 million in tax payments.
What Does This Mean For The Clippers?
The Clippers now have a little bit of financial breathing room for the next few years. This move will allow them to sign other players and make moves to improve their team.
Furthermore, the Clippers can avoid paying the luxury tax for the first time since 2011. This is a huge accomplishment for a team that has been notorious for its high spending.
The Clippers can also use the money saved from the luxury tax payments to make improvements to their facilities, such as their stadium, training facility, and practice court. These upgrades will help attract free agents in the future and improve the team’s overall performance.
The Clippers’ decision to waive Eric Gordon was a strategic move that will have huge financial implications for their future. By avoiding the luxury tax, the Clippers have saved $110 million that they can use to improve their team and make upgrades to their facilities.
Likewise, this move will also allow them to attract free agents in the future, which will help them remain competitive in the league. The Clippers have made a bold statement with this move. And it will be exciting to see how it plays out in the coming years. With Kawhi Leonard and Paul George leading the way, the Clippers are poised for an exciting run in the upcoming NBA season.
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