Fourteen.
That’s the key number to watch as we head to the trade deadline, and one that isn’t getting enough attention outside team finance departments.
With just a week and a day of shopping left, an amazing 14 teams still stand over the luxury tax line. This has massive implications not just for their bottom line, but for those of the 16 teams under the tax line. Remember, the revenue from the luxury tax payments is split among the teams who stay under.
Thus, if seven of those 14 teams get below the tax line this week, it will split the revenue check for the others by roughly a third. Teams that were looking at an $18 million check this summer might only get $12 million instead.
Some action on this front seems highly likely to happen. I count seven teams that we can basically guarantee will stay over the tax line: Boston, Denver, L.A. Lakers, Milwaukee Minnesota, New York and Phoenix. They might make moves to lower their tax burden, yes, but it’s not realistic for them to get all the way out.
However, seven other teams are over by less than $15 million each, and have reasonably clear pathways to moving money that would get them under. Of those, only Cleveland is in such a strong position in the standings that basketball matters might take precedence and see them add salary instead of subtracting.
Let’s take a quick look at those seven:
Cleveland ($1.9 million) – The Cavs could get under the tax as part of a bigger deal that sends out Isaac Okoro and/or Georges Niang and a draft pick to return a stretch 4. Failing that, trading end-of-bench minimum contracts Craig Porter Jr. and Tristan Thompson would get them under.
New Orleans ($2.1 million) – The historical frugal Pels aren’t sending a tax check to the league while they’re in 13th place in the West. If no Brandon Ingram trade materializes, they can throw two minimum contracts overboard to get under the line.
Clippers ($2.5 million) – Steve Ballmer hasn’t cared about the money, historically, but he might be persuaded to care about the repeater tax. A move involving P.J. Tucker – on the chillin’ list all season — or little-used Bones Hyland would get the Clips under.
Dallas ($5.3 million) – The Mavs went to the Finals last year, have been treading water even without Luka Doncic this year, and would have to move a real contract to get under. As with Cleveland above, the most likely pathway is “two bird with one stone” deals that add a rotation player while cutting salary. For instance, deal involving Max Kleber’s $11 million salary, and possibly other smaller contracts, along with their 2025 first-round pick, could get them there.
Golden State ($6 million) – The Warriors are usually happy to spend, but the threat of hte repeater tax and their own middling state in the standings might inspire them to cut dollars anyway. Moving off expiring contracts like those of Kevon Looney or Gary Payton Jr. would accomplish the task.
Philadelphia ($10.9 million) – Nothing has gone right for the Sixers, currently 11th in the East despite a hefty payroll with three max contracts. Evading the tax would likely involve trading Kenyon Martin, Jr.’s $8 million deal and at least one other small contract; the Sixers might also cash out their Guerschon Yabusele stock if they don’t think they can re-sign him.
Miami ($13.6 million) – Miami has a long way to go to get out of the tax, but a Jimmy Butler deal would involve big contracts going back and forth and possibly grease the way for Miami to take back $14 million fewer than it sends out. Stuffing Duncan Robinson’s $19 million deal into the periphery of a Butler swap would probably go a long way toward achieving this.
