It's now a well-known fact that the NBA's new collective bargaining agreement restricts the ability of franchises to employ more than two very high-paid players at once. For all but a few teams, the future will likely not involve the kind of three-star super-teams that became popular when LeBron James chose the Miami Heat in 2010.
Dallas Mavericks owner Mark Cuban was one of the first owners to realize this new reality, and in the compressed, post-lockout offseason of 2011 he opted not to overpay to reassemble the team that won the NBA title the previous June. Cuban's plan backfired when he couldn't sign a second, younger superstar to pair with Dirk Nowitzki, but his logic was sound. With this new CBA, an owner better be sure a long-term contract is worth it.
As a knowledgeable observer of NBA finances, Cuban has recognized the considerable payroll of the Los Angeles Lakers, now surging up the West standings at 26-29. With three players making $19 million or more per season and several others making considerable sums, the Lakers will have important decisions to make if they want to avoid a sizable luxury tax hit.
“If you look at their payroll, even if Dwight (Howard) comes back, you’ve got to ask the question: Should they amnesty Kobe?” Cuban said during an appearance on ESPN Dallas 103.3 FM’s “Ben and Skin Show.” [...]
That sounds crazy, but the Lakers are looking at ridiculous luxury tax bills if they don’t do something drastic to reduce their payroll, which is slightly more than $100 million this season and will probably be in that same range next season if Howard re-signs.
This is the last season of a dollar-for-dollar penalty for teams over the luxury tax limit ($70.307 this season). Beginning next season, the luxury tax starts at $1.50 per dollar and escalates for every $5 million a team is over.
If the Lakers are $30 million over, their luxury tax bill would be a whopping $85 million next season. If L.A. trims the payroll down to $20 million over the tax, the Lakers would still get hit with a $45 million bill. And they’d be subject to the even heavier repeater rate in 2014-15, although Steve Nash's $9.7 million salary is the only contract currently on the Lakers' books for that year. Bryant is on the books for a league-high $30.45 million salary next season, the last year of his contract.
Cuban has a long history of needling at the Lakers, including his now-prescient preseason claims not to anoint them as champions and not-so-impressed evaluations of angry Lakers fans. He's a master of poking fun at the Lakers in public, and he'll do it whenever he gets the chance.
[Also: Tony Parker for MVP? Naaah]
That said, he's not only making jokes in this case. The luxury tax will penalize teams to a degree we haven't seen before, and having one player eat more than 40 percent of the salary cap might not be a smart business decision. While Kobe is having one of his best offensive seasons in years, he still turns 35 next August. That's an age at which all perimeter players see dips in production, and there's no reason to think Kobe will get especially better.
The Lakers are a different case, of course, because they play in the NBA's second-biggest market and bring in huge amounts of money through their regional sports networks. Other franchises don't have those advantages, and the Lakers are more able and willing to pay the luxury tax because of it. However, every team has its financial limits, and it's possible that the Lakers are close to theirs. Cuban's statements note that state of affairs. He did it in a trollish way, but he also effectively explained the issue.
At the same time, he didn't just say that cutting one of the most popular players in Lakers history could be a good business decision. In fact, Cuban expressed why it's never going to happen:
“You just don’t know, right?” said Cuban, whose Mavs avoided the luxury tax the last two years despite Dirk Nowitzki's $20-plus million salary by letting Tyson Chandler and other key pieces of the 2011 title team leave in free agency. “It’s the same reason I wouldn’t get rid of Dirk. I’ll take a hit for a season rather than get rid of Dirk. That’s just it. I’ve made that commitment to him over the years and he’s returned that commitment. Maybe that’s selfish, but that’s just the way it is.
Dirk, like Kobe, is so important to his team that getting rid of him would have catastrophic effects on the morale of the franchise, from the owner down to the fans. What Cuban is saying, really, is that a smart decision for a basketball team can't only be inspired by finances, because image and emotion determines long-term viability, as well. The Lakers will never use the amnesty clause on Kobe, because he means to much to the organization's image and conception of itself. Cuban knows this, because he knows he might eventually have to consider the same decision with the Mavericks.
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