DeMar DeRozan

How reported DeRozan addition affects Kings' NBA luxury-tax situation

NBC Universal, Inc.

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's luxury tax?

DeRozan reportedly will sign a three-year, $76 million contract with the Kings, TNT's Chris Haynes reported Saturday -- ESPN's Adrian Wojnarowski has the deal at three years and $74 million -- as part of the move that will push Sacramento near the $170.8 million luxury-tax threshold for the 2024-25 NBA season.

The Kings currently are $5.1 million below the luxury tax, and will avoid the threshold if they sign two veteran-minumum players, ESPN's Bobby Marks reported Saturday.

Including potential bonuses for DeRozan, Domantas Sabonis and Trey Lyles -- which Marks notes would be unlikely for three players to hit -- Sacramento still would fall beneath the luxury-tax threshold at a projected 2024-25 salary total of 168.9 million.

After a busy offseason that included the reported addition of DeRozan and retaining Malik Monk, the Kings still have an extremely valuable asset in the non-taxpayer mid-level exception, which could prove enticing to any potential free agents still on the market. However, should Sacramento decide to use that exception, it would be hard-capped at the $178.1 million first apron.

Given the way teams repeatedly in the luxury tax are punished in the NBA's new collective bargaining agreement, it likely would take an enticing player to force the Kings to forego their clear path to remaining under the tax even after their reported DeRozan acquisition.

For now, general manager Monte McNair and the Kings' front office can take a deep breath and bask in the aftermath of the warm reception Sacramento's move for DeRozan received from fans in the 916.

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