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The Financial Impact of the Jabari Bird Allegations



Understanding that this is one of the least important elements of the Jabari Bird "situation," some details around how the league and team may proceed and what it means for the Celtics' financial situation are emerging. This is not an area that I'm an expert in, and there isn't much precedent for allegations of this severity, but I'm going to try to go through it, anyway. Sports Illustrated's Michael McCann wrote a good piece on the legal implications of the arrest.


(Potentially) Import Concepts


First, we must recognize that while the allegations against Bird are awful, he has pleaded not guilty and has not been convicted of anything. While the league and, in some cases, team are allowed to take disciplinary actions against a player for an arrest before a conviction, the team explicitly cannot go to the extent of voiding a contract based solely on allegations.


Second, the CBA does not allow for both the league and a specific team to punish a player for the same offence, except in certain extreme cases. If Bird is convicted of a felony it would become a situation where the team could take their own contractual actions after the league levies punishment, but again just being in the stage of allegations doesn't allow for double-punishment.


Third, the league and NBA Players' Association have entered into an agreement specifically related to handling domestic violence allegations and convictions. The Celtics have already stated that the nature of these allegations rise to the level of league discipline. As Bird has not been convicted (or pleaded guilty / no contest) and a team cannot mete out punishments on top of the league, the Celtics appear to be in a position where they cannot do anything with Bird beyond what they would be able to do if there were no charges. They could waive him, for example, but they would have to pay out his full guarantee just like if they were waiving any other contract.


Fourth, The NBA season starts sooner than the legal system is likely to resolve this.


How NBA Discipline Works


If we were already in-season, Bird would almost certainly be on a league-imposed "paid administrative leave" right now, pending an investigation and punishment. As the season has not begun, there's really no reason to do that yet.


In the case of domestic violence charges, there is a seven person panel that reviews each situation. They can fine, suspend, or disqualify a player. For all that the information from his arraignment looks truly terrible, it seems highly unlikely that the league would ban Bird considering that it's a first known offence. A fine and suspension are both coming, unless there's a lot more to the story than what is currently known.


When he is suspended (and in this case directed into counseling) his pay is docked. If the suspension is for fewer than 20 games, he is docked 1/145th of his pay per suspended game. If he is suspended for 20 or more games, he is docked 1/110th of his pay per game. For Bird, that would be a de facto fine of $9,306 per game if the suspension is under 20 games, or $12,267 per game if it's for more than 20 games. That's on top of any defined suspension amount.


If the Celtics were to waive Bird before his suspension plays out, I believe that they would have to pay out the complete remainder of his guarantee and then the suspension would apply at the beginning of any future contract he signs (if that ever were to happen).


Celtics' Tax Impact


We now get into an area that I'm somewhat more comfortable in. Boston has been walking a fine line around the luxury tax where they're currently $3,849,154 over. Many people assume that they will take steps before the end of the season to get under, barring any significant opportunity to improve the team that adds further salary.


Jabari Bird currently accounts for $1,349,383 against the taxable salary calculation as a drafted second year player.


If the team were to release him today, that amount would actually increase to $1,512,601 due to some arcane rules. It would also open a new roster spot. Teams must carry 14 full NBA players this season, so if they were to want to make any other moves in the future they may have to sign another player to fill that slot, adding further taxable salary.


If Bird is fined by the league, half of the amount of the fine will be taken out of his taxable salary amount.


If he is suspended, the amount that comes out of his tax value is not based on the 1/145th or 1/110th used for the actual salary docking. Instead, it is 50% of a straight-line proration of his cap value. For example, if he were suspended for half the season (41 games) it would cost him $502,947 in actual salary ($1,349,383 * (1/110) * 41) but from a tax perspective it would take $337,346 ($1,349,383 * (41/82) * 50%) off the Celtics' books.


For purely illustrative purposes, let's say that the league fines him $50,000 and suspends him for 25 games. The Celtics keep him under contract for those 25 games and then waive him as soon as the suspension ends. The tax value for his waived contract would be $1.28M.


You get there by taking 50% of the fine, 50% of the prorated salary for 25 games, and subtracting that from the two season salary of $1,512,601 that waiving him would increase his default contract to. In that way, even a severe punishment (compared to what priors do exist) only cuts the C's taxable obligation by ~$70k.


For that reason, it's conceivable that the Celtics would keep him on the books (and maybe just ask him to stay away from the team) throughout the entire legal process. If he were found guilty of a felony they would have more clear grounds to void his contract entirely. There may still be grounds to void it months after being waived, but that would be some new legal dealings for the league, I think.


All of this just comes back to finances, though. It's entirely possible that the team will simply not want to deal with any of this and deem a straight release to be the best course of action, with the possibility for some other legal proceedings down the line. If they do plan to get under the tax line this season, having Bird in the calculation certainly makes things harder. Over the next few years, that could cost the franchise tens of millions in tax payments, repeater penalties, and losing out on a share of payments in.


Again, this is a much less important element of the story than the physical and mental health of the victim and the legal proceedings for Bird, but it is something that the team will have to wrangle with.

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