Capítulo 461: Chapter 461: The Wade Dong Clause
The conversation had led to the main point.
The topic of this joint meeting of team owners was the luxury tax!
In 1999, the league experienced a 'lockout', and during the negotiations between the league and the players' union, the concept of a luxury tax was introduced.
The mechanism was that the league would withhold 10% of the players' salaries and place it in an escrow account. If the total player income did not exceed 55% of the team's total income, the money would be returned in full. However, if it exceeded this threshold, the league would keep the money. ✥❁
This was done to ensure that the total salary of the team did not exceed 55% of its income.
If a team's payroll exceeded the luxury tax limit, they would face a hefty luxury tax penalty.
...
In the meeting, one of the team owners spoke up, "So, we hope that for the next season, the luxury tax rule will not apply to Wade Dong, and his salary will not be included in the team's payroll."
Guo Zifeng mocked, "In other words, you can't afford to pay the luxury tax, right?"
"It's not that I can't afford it..."
The man wanted to argue with Guo Zifeng.
"You simply can't afford it!"
Guo Zifeng didn't give him a chance and quickly retorted. Then, he changed the subject, "I can afford it, but I don't want to pay this unfair tax. So, I agree with this old man's suggestion."
The guy didn't expect that after all the arguing, Guo Zifeng would be on his side. This left him speechless.→
Adam Silver's face turned serious, "The reason for the 'luxury tax' rule is to maintain balance in the league..."
"Is the league balanced now?"
Someone immediately countered, "Look at the Suns now; they're not giving other teams any breathing room!"
"Hehe..."
Robert Sarver couldn't help but chuckle, but he was immediately met with several glares. He could only force a frown and suppress his laughter.
Adam Silver was well aware of the team owners' ulterior motives. The luxury tax was designed to prevent superstar alliances and promote team stability, maintaining a balance among all teams.
In other words...
If Wade Dong's salary were exempt from the luxury tax, it would truly disrupt the balance, just like the Suns this season.
Imagine a team that recruits players normally, and then spends 70-80 million in a single year to bring in Wade Dong. Such a team would be even more formidable than the current Suns!
The other team owners understood this logic, and their intention to do this was to attract Wade Dong to their team. The upcoming season would mark the end of Wade Dong's three-year contract with the Suns.
Before the meeting, several team owners had privately contacted Guo Zifeng.
In fact, Guo Zifeng was there to stir up trouble. His true purpose would become clear to Wade Dong after the meeting.
Robert Sarver shivered.
Every team owner wanted to snatch Wade Dong away from the Suns.
During the meeting, despite starting at 9 AM and lasting until midnight, the majority of team owners shared the same belief, and they eventually reached a consensus.
For the 2015-16 season, 53% of Wade Dong's salary would be included in the team's total payroll, while the remaining 47% would be excluded, meaning this 47% would not be subject to the luxury tax!
This regulation was also known as the Wade Dong Clause!
The purpose of this clause was to provide a fair opportunity for all teams to compete for Wade Dong's services after his contract expired, essentially letting money do the talking!
Wade Dong didn't lack honors—back-to-back MVP and DPOY awards, three consecutive FMVPs, and numerous historical records. Even if he retired immediately, he could still be considered the league's number one without the need for further accolades. Wade Dong's very existence was a legend.
"So sleepy~"
As the meeting finally concluded, Guo Zifeng stretched and said, "Any of you owners up for a late-night snack? It's on me!"
"Mr. Guo, will the Nets also pursue Wade Dong after his contract expires?"
"Of course!"
Guo Zifeng raised his eyebrows, "The Nets are prepared to offer a five-year, $700 million contract to the league's number one player."
"Five years, $600 million???"
"Mr. Guo is just joking... Teams like ours, from smaller cities, don't even make $100 million in revenue per year."
"Is it about the money, gentlemen? How much do you think the name 'Wade Dong' is worth? Don't you have any idea?"
Guo Zifeng let out a cold laugh and left.
Some NBA teams operate at a loss each year, but most team owners are not short on money. Some own teams to leverage their influence for other business ventures. Once the team's value increases, the initial losses are quickly recouped.
Why was the Wade Dong Clause created?
In other words, these team owners were willing to pay any price to acquire Wade Dong for their team.
Guo Zifeng had left the meeting!
But his words, 'five years, $700 million,' lingered in the room... Guo Zifeng was telling them that he had made his offer, and now it was their turn to raise the stakes.
Five years, $700 million!
Even if only 53% of Wade Dong's salary was included in the team's payroll, it would still exceed the salary cap for a single player.
...
After leaving the meeting, Guo Zifeng called Wade Dong.
"Brother Dong, we team owners just had a meeting and created a 'Wade Dong Clause.'"
"Wade Dong Clause?"
Wade Dong, who was having lunch, became interested and asked, "What's the Wade Dong Clause?"
"It means that starting from the 2015-16 season, only 53% of your salary will be included in the team's payroll, which can reduce the team's luxury tax. More importantly, you'll be offered a massive contract."
"Wow, that's a great deal!"
"Before I left the meeting, someone asked me what contract the Nets would offer if they wanted to sign you. I said five years, $700 million!"
"Mr. Guo is so generous~"
Wade Dong smiled, "When I return to China, I'll treat you to a drink."
Five years, $700 million—that was just a small goal, and it didn't even account for the exchange rate! Wade Dong was already wealthy, but even the rich wouldn't refuse more money, especially when it was in US dollars.
"Brother Dong, will you join the Nets next season?"
Guo Zifeng asked again.
"No!"
Wade Dong directly refused.
"So, do you plan to stay with the Suns forever?"
"Not necessarily."
Wade Dong replied ambiguously, "Maybe I'll retire after next season."
"Retire? Impossible... Do you even believe that yourself?"
"Hehe~"
"I'm heading to the airport now. I should be in Beijing around 10 PM tonight. Let's have some barbecue when I get back."
"No problem."
As the conversation ended, they hung up. Guo Zifeng was right; Wade Dong wouldn't retire after just three seasons. The rapid growth of the Wade Group was partly due to the assistance of Zhang Yang and Guo Zifeng, but the most crucial factor was Wade Dong's influence.
Wade Dong would only consider retirement when his personal influence was maximized, and he had achieved financial freedom. Only then would he choose to retire and focus on his family.
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