Why Marks calls Warriors’ luxury tax situation ‘dire’ originally appeared on NBC Sports Bayarea
ESPN’s Bobby Marks, an NBA front office insider with a deep understanding of the CBA, explained to 95.7 The Game this week that the Warriors’ luxury tax situation is nothing short of “dire.”
“Oh it’s dire, I think Joe Lacob even came out and said it, they’re in the repeater tax,” Marks said Wednesday. “So basically, this will be the fourth time in five years that they are going to be a luxury tax team. So basically, the penalty is double as far as what it’s going to cost them. So if you’re paying $60 million in luxury tax, it might be $120 million now. So to bring back Kelly Oubre, it might cost you $70 million on a $15 million contract, so you’re paying for an $85 million player.
“That’s why Bob Myers came out and said ‘hey, we’ve got to find veteran guys’ and basically gonna have to bargain shop, with minimum guys. It can be done, Brooklyn did it with Jeff Green, they traded for Bruce Brown, traded for Landry Shamet, guys like that, maybe some buyout guys here. But there eventually gets to a point, and I’ve been there in Brooklyn, where ownership just says ‘it’s too much, like the cost is too much because we’re writing a check to the NBA for $200 million in luxury tax.’ I know that building will bring a lot of revenue there, but the price is going to be ridiculously high, if you use that $5.9 tax million mid-level exception, it’ll probably cost you an additional $30-35 million when it goes to luxury tax.”
Marks wrote in December 2020 that the Warriors’ tax bill for the 2020-21 season was a staggering $147 million. Although the final number wasn’t disclosed — it would have decreased based on revenue losses and cuts before and during the season — that is a significant number on top of the Warriors’ confirmed $180 million payroll.
Oubre is set to hit free agency after earning $14.3 million this past season. After a slow start to the season offensively, the 25-year-old found his form and ended up averaging 15.4 points, 6.0 rebounds and 1.3 assists over 55 games for the Warriors.
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Where he fits into the Warriors’ plans remains to be seen. Oubre likely is seeking a lucrative long-term deal entering his first NBA free agency, and the Warriors have a lot of money tied up in Steph Curry, Klay Thompson, Draymond Green and Andrew Wiggins.
The Warriors could look to draft a defensive-minded wing with one of the team’s two lottery picks, and then round out the bench with veterans on minimum contracts.
Any move the Warriors make this offseason, whether it be a trade or free-agent signing, will be costly while the team is so deep into the luxury tax.
With Thompson expected to return, Lacob’s competitiveness likely will make him willing to foot a large luxury tax bill if the team can improve and be closer to a title contender in 2021-22.
Whatever the Warriors end up doing, the size of the potential luxury tax will loom over the front office. It remains to be seen just which direction the Warriors will end up going with it.