Pat Riley feels the pain of the Miami Heat's luxury tax bill (Jesse D. Garrabrant/ Getty).
The NBA lockout of 2011 occurred for several reasons, but one of them was that small-market owners wanted to ensure that teams like the Miami Heat could not take full advantage of their ability to attract and build superstar-laden rosters. After the Heat obtained LeBron James and Chris Bosh to join Dwyane Wade in 2010, there was a worry that small-market teams could not compete fairly with the league's marquee teams. So, they made it much more difficult to assemble these super-teams without taking a major financial hit, increasing luxury tax penalties and making the thought of carrying three max (or near-max) contracts especially distasteful.
The Heat are now faced with a serious luxury tax bill this season. It's so big, in fact, that team president Pat Riley tried to get the Heat a partial rebate. From Ira Winderman for the South Florida Sun Sentinel (via SLAM):
As the Miami Heat continue to deal with the fallout of the luxury-tax implications of the NBA's most recent collective bargaining agreement, Heat President Pat Riley revealed that he not only saw these challenges coming, but believed the league should have made efforts to protect legacy contracts.
"I hope I don't get in trouble for saying this," Riley said on his Friday conference call, "but I was always a proponent of any of the teams that had signed players to contracts that were under the old CBA should have had some consideration with the new CBA as to how the tax was going to be charged to them over the years, until their contracts ran out, that there should have been some consideration for that."
Instead, Heat owner Micky Arison now not only is facing a $33 million luxury-tax penalty this coming season, but there could be even more dire implications going forward with the massive annual salaries of LeBron James, Dwyane Wade and Chris Bosh.
It's exactly this persistent tax issue that has caused some analysts to believe the Heat won't be able to retain all three of their stars next summer, when they have the opportunity to opt out of their deals and become free agents. Arison's luxury tax bill is serious this season, but it would only become worse in the future, when the collective bargaining agreement's various repeater clauses multiply the amount. Of course, this would also be an example of the system working as planned, limiting teams' abilities to create dynasties.
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Yet, while Riley is right to stick up for his team's interests, his case is not particularly strong. Although the Heat did sign these players a year before the new CBA was negotiated, every team that pursued free agents in 2010 knew that those forthcoming rules would likely limit their ability to sign multiple stars in the future. The rules didn't say as much at the time, but a responsible team would have known what was coming. Most believed that the penalties would be worth it, and the Heat likely wouldn't argue their two championships weren't worth the financial cost.
Plus, the NBA did create a provision to lessen teams' financial burden of previous contracts — the same amnesty clause that Riley says his team won't use. It makes sense that Riley wants to help his team out in any way possible, because that's his job. But it's also true that the Heat haven't chosen to lessen their luxury tax bill because they don't think it's worth the hit they'd take on the court. They only deserve so much pity.
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