During the 2023-24 NBA season, the Golden State Warriors are facing a staggering $172.8 million luxury tax bill. With the new Collective Bargaining Agreement set to introduce stricter penalties for tax offenders, including more severe trade restrictions and limitations on acquiring players through buyouts, the Warriors are keen on reducing their financial burden.
Joe Lacob, the team’s governor, emphasized on The Athletic’s TK Show with Tim Kawakami that avoiding the luxury tax is a top priority for the franchise. The goal is to avoid the tax for two of the next four years to escape the repeater tax penalty, which significantly hampers a team’s flexibility and financials.
“Our Plan 1, or 1A, is that we’d like to be out of the tax, and we think that we have a way to do that. That kind of is the plan, not just under the second apron,” Lacob said. “I’ll tell you why that’s important because the truth is, we need to be out of the tax two years out of the next four in order to get this repeater thing off our books. We don’t want to be a repeater.
“It’s so prohibitive, not to say we wouldn’t do it if we had to, but you’ve gotta look at the downside of doing that,” Lacob explained. “So, that’s the plan, is to try to do that, and we think we can keep our team together and retain even the players that are, we might be able to bring players back at different numbers and so on.”
Despite previous speculation about high-cost moves, including a potential inquiry into acquiring LeBron James, Lacob’s strategy focuses on financial prudence. Achieving this financial goal, dubbed “Plan A,” involves careful contract management and possibly restructuring deals to keep the team competitive without exceeding the luxury tax threshold of $172 million for the upcoming season.
The Warriors have eight guaranteed contracts for the next season, totaling approximately $137 million. This calculation assumes Gary Payton II will opt into his $9.1 million contract.
However, this budget does not account for potential new deals for key players like Klay Thompson, Chris Paul, or Kevon Looney. With limited financial room to maneuver under the projected luxury tax line, the Warriors may need to fill out their roster with minimum salary contracts, posing a challenge to maintaining their competitive edge.
The Warriors’ strategy involves making difficult decisions to balance competitiveness with financial sustainability. With the window of opportunity with Stephen Curry as a premier player narrowing, the team faces the challenge of enhancing its roster within the constraints of the luxury tax, aiming to remain contenders in the NBA.
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