The Celtics are obviously in contention mode right now. Projecting out the future is important because there is a limit somewhere and the multiplicative nature of the luxury tax is like a timer. We don't know exactly where that timer stops, but I'm going to be doing my best to project that today.
I've gotten into a lot of... ummm... interesting discussions with other people on here about the Celtics spending, alleged willingness to spend, etc. This isn't mean to be one of those. I'm just here to look at the facts and guess what the Celtics are planning to do. Not to argue whether that is right or wrong. This is all meant to be hypothetical anyway.
Now I've seen many examples on here over the past several years where people have suggested, often vaguely, how spending on one thing could shorten this window or vice versa. Things that delay the repeater tax are definitely valid. Larger transactions are valid. Things that save or add a few million here or there outside of that are unlikely to be very consequential at this stage. In fact, I highly suspect the Celtics spending will be at relatively the same level over the next few years and I'll get into why later on.
The Recent Timeline:
In 2020-21, we were under the luxury tax by the end of the season by about $1.9 million. The luxury tax threshold was $132,627,000. The important part is that the Celtics were below the luxury tax threshold and this delays the repeater tax.
In 2021-22, the Celtics were around the luxury tax threshold of $136,606,000. According to Spotrac, they ended up with about $879,000 room to spare. My recollection was we started a bit over and stayed over, so I'm not sure if my memory is off or if there is something I missed. The difference is that this would delay the repeater tax by a bit if we got under again. If anyone can confirm this information, I would greatly appreciate it.
This season in 2022-23, we are way over the luxury tax threshold. Said tax threshold increased all the way to $150,267,000 and the Celtics are sitting at something like $173.79 million. Obviously, we are way over. This is only the first season since the old Pierce, KG, Allen big 3 days that we are far over the luxury tax.
As you know, my data here comes from Spotrac. If there is something flawed in the data, please let me know. The difference between this being the first consecutive season we were over the luxury tax or just the first season we are way over the luxury tax is not inconsequential. However, it would matter far more over the long term than just these few years. It probably won't matter too much for the scope of this fanpost since projecting too far out is likely to be filled with inaccuracies.
Future Luxury Tax Projection:
The luxury tax is also projected to rise in the future. While there are a lot of variables and it is imperfect, it's definitely worth using projections and comparing them to our current salary just to get a general idea of what range we are at.
2023-24 - $162,000,000.
2024-25 - $171,600,000.
2025-26 - $178,605,000.
Again, these projections come from Spotrac: https://www.spotrac.com/nba/tax/
Current NBA salary: $173,791,114
To put this in perspective, the current salary for the Celtics is nearly $25 million over current luxury tax threshold. It is also over the projected thresholds for the next two years after this. Only in 2025-26 would we see a higher luxury tax numbers, and even this is only by about 5 millions dollars.
Now we know NBA salaries and rosters don't stay the same and projections are often imperfect. I just wanted to paint a clearer picture for folks to grasp exactly what the current spending level it at. Though it should be reiterated that this is the first season like this.
Al Horford's Contract Savings:
For those of you who didn't already know, this was the last contractual season from Horford's last major pay day. He's making $26.5 million this season. This was a potential problem. Fortunately for the Celtics, they worked out a deal wiith Al for him to play the next couple years here at lower salary. Next season, Horford will be making $10 million.
Math: $26.5 million - $10 million = $16.5 million in savings.
So the Celtics will be saving $16.5 million from just Horford next season. This has huge implications because it can cancel out a lot of the spending we could make this or next season. This also goes for moves we can no longer make, which I won't be getting into since they are no longer relevant.
The second year of Horford's new contract is $9.5 million. So the spending situation for him in the 2024-25 season will be roughly similar. At that point, he will be 38.
It should be noted that the $16.5 million in savings we get from Horford next season are also greater than the projected $12 million increase in the luxury tax next season. I'm not saying it's going to happen, but it is technically possible that the Celtics could dip down under the luxury tax threshold again IF they don't sign Grant Williams.
Another thing I should probably mention is that we were very likely to get savings from Horford next season even before his new contract situation played out. The reason this could have been projected to some extent is because Al is 36. There is no way the Celtics would have paid him 20+ million at that age. So either he takes a pay cut to stay or we lose him again. Those were essentially the only realistic future options.
I'm extremely glad that Horford chose to stay with us. Still, it's not like other teams would be lining up to pay him 20+ million at his current age, either. Exact figures are hard to predict before hindsight, but a 10+ million savings minimum was probably always going to be a reasonable projection. Even if they had to replace Al, a contract for a hypothetical replacement big likely wouldn't sniff $26.5 million.
Future Free Agents:
The Celtics are actually in really good shape here for the short term. Since Horford was taken care of, the only major free agent situation we have this offseason is Grant Williams. His current contract is $4,306,281 and this means that the Celtics could pay him as much as $20 million per season and roughly break even. Why? Because they are saving $16.5 million from Horford and Grant is already making $4.3. million.
Math: $4.3 million + $16.5 million = $20.8 million.
What this means in English is that the Horford savings covers for up to a sixteen and a half million dollar increase elsewhere. If this is used on Grant, we stay relatively the same spending level next season. If Grant walks, it helps elsewhere. But then we have to replace him. My current belief is that the Celtics will be motivated to keep him.
The only other FA in our current top 8 who is coming up relatively soon is Jaylen Brown. He is an FA for the following offseason in 2024. It should be assumed that Brown will be offered the max of whatever the Celtics should pay because he is one of their franchise players. Since the rest is roughly the same, I expect little change.
Things don't get too interesting until the 2025 offseason. In that offseason, the contracts for Brogden and White end. Same for Horford, though he will be 38 and unlikely to be making much if he's even still playing at that point. There is also Tatum's player option, which I assume would turn into another max contract. This is where it could start to get hard for the Celtics to keep everyone.
Expired TPEs and the Budget:
Before I get to the conclusion, I just want to point out that Boston's ability to add salary through trades is greatly diminished from what it was roughly half a year ago. The Fournier TPE expired. The much smaller Hernangomez TPE was recently let expire. This limits the Celtics to adding about $5ish million in salary. While they could still technically make a big trade with salary matching, that's not really going to result in a significant increase of payroll even if it happens.
This is important because it means that our current salary threshold is going to be roughly where it is now. And it pretty much was always going to be that way once the Celtics decided to not use their TPEs. I'm not here to argue if this is right or wrong. The only point to take from this is that the Celtics don't have other tools to add significant salary to their current team salary. They are legally incapable of it at this stage because of the limited tools over the cap teams have to add salary to their rosters.
The bottom line is the Celtics salary is staying at roughly where it is for the current season.
Another important point is that the Celtics chose this in the offseason. They didn't just look at their amazing 1st place team and decide we didn't need anything else. They would have had to make the conscious choice beforehand. The Celtics actively chose to avoid the urge to use their Fournier TPE or replace Gallinari with a similar caliber of player after he went down.
While the Celtics were coming off a Finals appearance, there was a lot more uncertainty of this team's standing at the time. The second half of last season was dominant, but the first half was not. The Ime Udoka situation hung a cloud of uncertainty over the organization. Wyc Grousbeck also called the team overrated.
"I really loved being part of the Celtics throughout that run [to the Finals] … The other side of the coin is I think that we’ve now been overrated … [We were] a finalist and two wins away from winning it, but when you look back, Brooklyn was a tough series, and then we had to go seven games [vs. Milwaukee and Miami]. Then we lost [vs. Golden State]. So, we’re not a hands-down team to repeat as Eastern Conference champions. I think we’re a quality team."
Now we can debate exactly why Wyc said this and the possible strategic merits of tempering expectations and whatnot. I'm not here for this. I only bring it up to help demonstrate that it wasn't immediately obvious that the Celtics were going to be in the spot we currently find ourselves in.
Yes, there had to be a certain amount of confidence from ownership or they wouldn't have even approved spending to the level they are currently at. But that's all. Little room was actually left to further add to the budget in case of performance above expectations. You can agree or disagree that this was the right thing to do. But what cannot be disputed is that the Celtics set the budget in the offseason and made a conscious choice to not exceed it regardless of performance.
Why is that important? Because it means the budget was set then and not now. It's easy for someone to say Brad Stevens has the green light to spend this trade deadline after essentially all the tools for doing so are gone. The reality is that there is no other choice and this makes it much easier to project future spending.
3 years. I predict that the Celtics will be spending at roughly the same level they are now for the next three seasons, counting this one.
This is possible because the savings from Horford should allow us to fit Grant into a budget similar to this year's spending. Since Grant Williams and Jaylen Brown are the only two FAs in our top 8 in the next two offseasons, it is extremely likely that the Celtics can stay at about the same place they are at for this time. I personally believe the Celtics will be very motivated to keep Grant based on the team's performance and project them to work something out.
After that, I don't know. The multiple contracts up during the 2025 offseason will make it tough. The repeater tax will make it tougher. Without knowing details that the public isn't priivy to, it's impossible to predict how long the Celtics could keep up their current level of spending. It is reasonably likely that the Celtics choose this time to dip under the luxury tax threshold again.
If they don't, it's unclear how much longer they would keep up the spending level. It's probably a 3-5 year window. In the event Grant walks in FA and the Celtics find a way to get under the threshold next season, perhaps the Celtics wouldn't need to reset as soon. On the other hand, that wouldn't make the 2025 FA situation itself any easier. So I don't project this as it simply doesn't make as much sense.