Trade Rumors

Marc Gasol said he will have questions about the direction of the team after the offseason. How will you reassure him that Memphis remains the best fit for him at this stage of his career? Chris Wallace: Marc is having a terrific career here, both individually – being a multiple All-Star, being defensive player of the year, the All-NBA recognition. And he’s had tremendous team success. So, I don’t think one off year from the team success side tarnishes what he’s achieved or necessarily is going to be the norm going forward for the Grizzlies. This happens to all sorts of teams, where you have not as good a year as where you expect to be. But that doesn’t mean you can’t jump right back in and be successful again next year and that’s what our goal is. And he’s a big part of that.
What he did not mention is that the new tax law Mr. Brady helped draft, and which Mr. Trump signed, levies a large new tax on the Astros, and similar franchises across professional sports. The law changed a corner of the tax code that mostly applies to farmers, manufacturers and other businesses that until recently could swap certain assets like trucks and machinery tax-free. But by adding a single word to the newly written tax code — “real” — the law now allows only real estate swaps to qualify for that special treatment.
The provision is raising concerns and questions across Major League Baseball and the National Basketball Association, starting with: How do you value a player? “There is no fair-market value of a baseball player. There isn’t,” said Daniel R. Halem, the chief legal officer of Major League Baseball. “I don’t really know what our clubs are going to do to address the issue. We haven’t fully figured it out yet. This is a change we hope was inadvertent, and we’re going to lobby hard to get it corrected.”
The N.B.A. is similarly perplexed. It sent teams an email this month detailing the disruption of the trading system under the new law, but told executives it was still figuring out how to respond. The confusion is only one of many side effects of the new tax law, which sped through the House and Senate in less than two months at the end of last year, resulting in a series of changes that were both intentional and inadvertent. Republicans say they weren’t trying to hamstring sports teams: The change in the like-kind provision, Senate staff members said, was simply an attempt to broaden the United States tax base.
Basketball could be an even trickier proposition, because it taxes teams if they exceed a certain amount of total player salary for the season. This year, the Portland Trail Blazers traded a player with a modest contract in order to get under the tax threshold, saving themselves millions. The Cleveland Cavaliers made a series of trades that pushed them over the threshold. Some N.B.A. executives — who would not speak for publication — wondered if the Trail Blazers would need to pay federal tax on the money they avoided in league taxes as a result of a trade.