SBD/October 31, 2013/Leagues and Governing Bodies

More NBA Teams Staying Under Luxury Tax, But Big Market Franchises Still Spending

NBA teams are "making a clear effort to stay under" the luxury tax, "not just to avoid the stiffer bill, but to also stay away from adding a year toward becoming a tax repeater, which only makes the penalty worse," according to Royce Young of Under the old tax system "as many as 16 teams paid it any given year." On average, 8.4 teams "were in the tax the past 10 seasons." But in year three of the current CBA, "six teams out of 30" are paying the tax. The teams paying the tax are those "in the biggest markets," and the league "still has its haves and have-nots." Young wrote that is not "exactly the leveled playing field" that NBA Commissioner David Stern and Deputy Commissioner & COO Adam Silver hoped for. Stern in '11 was "almost arrogant in his assurance of how the new system would work." But he "couldn't anticipate" an owner like the Nets' Mikhail Prokhorov "basically ignoring it entirely." Still, the new CBA has "seen franchises make tough decisions regarding the tax." This season will be "patient zero for the new system." Teams such as the Lakers will be "interesting to watch in how they approach next offseason with a pile of cap space." If they spend, "talk about one of your all-time backfires." Small-market teams have been hit "especially hard" by the CBA, while teams paying the tax "all have a certain largeness in common." There "could be a new worry that the system has exaggerated the class system of the league, essentially mimicking real life economics" (, 10/30).
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