Warriors’ luxury tax punishment for drafting, developing players feels wrong
Why Warriors shouldn’t be punished for rewarding proficiency originally appeared on NBC Sports Bayarea
SAN FRANCISCO – Thirty names sit atop the organizational chart of NBA teams, and the one thing each name has in common is tremendous wealth. What they do with it is an individual decision.
Some like the cachet of ownership. Some like authority. Some like the riches. Some like the high that comes with triumph.
Warriors CEO Joe Lacob likes all of the above, which is why he spends so much of the revenue generated by the franchise. He could face a 2023 tax bill in excess of $480 million – more than twice the team’s player payroll.
All because the last collective bargaining agreement made no allowance for what by all accounts is the ideal path to build a team: Draft and develop.
Which irritates Lacob, whose Warriors have mostly followed that blueprint. They’ve won four championships in eight years mostly through the draft. They’ve splurged on precisely one big-ticket free agent, Kevin Durant in 2016.
And yet, the defending champion Warriors are accused of “checkbook” wins, with the league’s law enforcers coming after them as if they’re trying to buy their way to championships, an approach made infamous 40 years ago by late former Yankees owner George Steinbrenner.
Those cries will increase in volume and reach a higher pitch with the signing of contract extensions over the weekend by Jordan Poole and Andrew Wiggins. The Warriors could have as many as five players making more than $25 million in 2023-24.
Thus, the potentially massive tax payout that penalizes the consistently proficient.
Fair, or no?
No.
“The mark of a great organization is one that can retain talent, groom talent, identify talent and succeed,” team president/general manager Bob Myers said Sunday. “Last year was a culmination of that.
“Economically, I’m not going to get into what the rules should or shouldn’t be. The rules are the rules. I’m lucky that we have very competitive, very competitive – owner that supports winning at a high level.”
Myers didn’t dare voice an opinion because he knows the consequences. When Lacob went public in July with his distaste of building an elite franchise mostly by the book and still getting hammered, he was fined $500,000 for violating a policy that says, in essence, thou shalt not negatively opine on thy blessed CBA.
“The truth is, we’re only $40 million more than the luxury tax,” he said on the Point Forward podcast hosted by Andre Iguodala and Evan Turner. “Now, that’s not small but it’s not a massive number. We’re $200 million over in total because most of that is this incredible penal luxury tax. And what I consider to be unfair and I’m going to say it on this podcast, and I hope it gets back to whoever is listening.
“Obviously, it’s self-serving for me to say this, but I think it’s a very unfair system because our team is built by . . . all top eight players are all drafted by this team.”
Lacob’s count of the roster is slightly off – it doesn’t account for Wiggins, acquired in 2020 via trade – but his complaint is valid.
The longtime core of the Golden State team that won four titles, the last by defeating the Celtics in the 2022 NBA Finals, is Stephen Curry, Draymond Green and Klay Thompson, all three of whom were drafted by the franchise. Starting center Kevon Looney came via draft, as did Poole, as did rookies Jonathan Kuminga and Moses Moody.
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Andre Iguodala, a crucial member of teams that went to five consecutive NBA Finals, was a free agent who signed a veteran’s minimum contract to return last season.
Lacob’s willingness to spend annoys some of his fellow “governors,” many of whom have considerably deeper pockets. His net worth reportedly is about $1.5 billion.
Down the coast, however, is Clippers boss Steve Ballmer, the wealthiest owner in sports, worth an estimated $76 billion. If anyone has the clout to be the NBA’s financial boogeyman, it is he.
But, again, these are individual decisions.
The current CBA expires after the 2023-24 season. Lacob will try to use any leverage he might have to lessen the pain that comes with success through drafting and development.
Seems only fair in a business in which winning tends to get costly and those making the big decisions carry wallets heavy enough to knock down a mansion.
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