As we get closer to February 9th’s trade deadline, there are some teams that could be motivated to make cost-cutting deals. Some, like the Mavericks and Sixers, could look to decrease their luxury tax penalties for this season. But then there are teams that could be approaching the luxury tax next season with their current roster.
For example, the Raptors are a team that could be looking to make a significant trade partly because all their top players are due for raises in the near future. Whether this season or during the offseason, we could see teams preemptively move some of their highest-paid players to avoid any future tax issues.
Here are some teams that could make financially motivated trades soon.
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The Hawks had to do some shuffling in the offseason while constructing their current roster to avoid the luxury tax. They will be in a similar position this coming offseason with potentially another difficult choice coming their way if they want to duck the tax again.
Atlanta is projected to be slightly over the projected $162 million luxury tax line for next season with 12 players on the roster. This projection includes their first-round pick falling in the mid-teens, and they would still need to add two more players. As things stand, they wouldn’t be able to get below it with all seven of their top highest earners on the roster. This includes Trae Young, John Collins, Clint Capela, De’Andre Hunter, Bogdan Bogdanovic, Dejounte Murray, and Onyeka Okongwu.
Assuming Bogdanovic opts into his $18 million player option, the Hawks would have to trade one of the players listed above to duck the tax next season. They don’t necessarily need to completely offload them since trading one for multiple cheaper role players would allow them to save money while filling out the roster more. The Hawks could look to address this at the trade deadline or the offseason with Collins, whose name has been in trade rumors the longest.
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Miami has managed to hand out big deals to many different players over the past few years and are set to avoid the luxury tax for a third straight season. It seemed like an inevitability that they would become taxpayers with Jimmy Butler’s and Tyler Herro’s massive extensions set to kick in next season, but they could be in a position to avoid it again. Their willingness to be a tax team could hinge on another deep playoff run this year.
If the Heat decides the roster isn’t worth being in the tax, they could look to avoid it again. They are projected to be close to $15 million over the tax next season, with 10 players assuming they waive Dewayne Dedmon’s non-guaranteed $4.3 million salary. This projection includes their first-round pick falling in the early 20s and Victor Oladipo exercising his $9.5 million player option. The two players they could look to unload are Kyle Lowry’s $29.7 million salary and Duncan Robinson’s $18.2 million salary.
Offloading Robinson may be more of a half-measure since they’d still project to be in the tax once they fill up the roster. The more effective solution would be clearing most or all of Lowry’s remaining salary for next season. One popular hypothetical being thrown around is the Heat swapping Lowry for D’Angelo Russell, who has a $31.4 million expiring salary. A trade like this would get them well below the tax, with enough flexibility to fill out the rest of the roster.
Alternatively, the Heat will naturally be looking for upgrades to the roster, which could mean increasing payroll for next season. They could be willing to be taxpayers if they are in a position to acquire the next available All-Star. They will be able to offer up to three first-round picks in a trade and have adequate salary filler in Lowry and Robinson.
New Orleans Pelicans
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New Orleans is projected to be around $15 million over the luxury tax next season with 14 players on the roster. This projection factors in the Lakers’ first-round pick falling at the end of the lottery and the Pelicans waiving Garrett Temple and his non-guaranteed $5.4 million salary for next season.
In all likelihood, the Pelicans will still end up being a taxpaying team even if they cut more from their payroll because of Zion Williamson’s contract situation. He is on track to earn All-NBA honors this season, which would increase his maximum contract from five years, $194.3 million, to five years, $233.2 million. This would increase his starting salary amount next year from $33.5 million to $40.2 million.
The Pelicans could be content on becoming taxpayers as soon as next year, given their current trajectory but could still look to soften the penalty. For example, offloading Devonte Graham and his $12.1 million salary ahead of next season would put them just slightly over the tax threshold. They could then be in a position to avoid it completely with another trade if needed.
Portland Trail Blazers
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The Blazers are treading the finest of lines this season when they constructed a roster that is just $67,482 below the luxury tax. They will be looking at an even tougher tax crunch to manage this coming offseason thanks to several challenges. With the Blazers currently out of the Play-In Tournament picture, tough decisions could be made if the organization feels the roster isn’t worthy of tax payment.
Portland is currently projected to be around $20 million below the luxury tax for next season with 12 players, which includes their first-round pick falling at the end of the lottery. This projection also includes Josh Hart’s $13 million player option, which could be picked up given his shooting struggles this season. They then need to extend or re-sign Jerami Grant, who is currently extension-eligible for up to four years, $112.7 million.
If Hart opts in and Grant extends for his maximum amount, the Blazers would be slightly over the tax for next season. They could easily get below with a cost-cutting trade or two if they re-sign Grant for more than his maximum extension amount. But afterward, they wouldn’t have any flexibility to add anyone else meaningful outside of a trade. The Blazers still have enough flexibility to run this core back for another year and see what they have before making any big decisions.
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This Wizards team was put together last year with the intent of making a push for the playoffs. Instead, they are outside of the Play-In Tournament despite their core being mostly healthy this season. While there’s a case for the Wizards to trade their best players and enter a rebuild, they do have some tough decisions to make just to keep this core going.
Washington is projected to be just $7 million below the luxury tax with 13 players this offseason assuming they get a high lottery pick in this year’s draft. But that doesn’t factor in Kyle Kuzma opting out of his $13 million player option and commanding a significant raise. Their salary cap situation is a little all over the place with Kuzma and Kristaps Porzingis’ pending player options, which complicated bringing back Rui Hachimura.
The Wizards traded Hachimura today to the Lakers for the expiring contract of Kendrick Nunn and three second-round picks. Their proximity to the tax next season by intending to bring back both Porzingis and Kuzma made Hachimura a tax casualty. Even making him a restricted free agent put them at risk of being in the tax if he signed his $7.7 million qualifying offer.
Now they could structure a long-term deal for Porzingis with a smaller starting salary for next season to accommodate Kuzma and could be hovering around the luxury tax afterward. If they want more flexibility, they could look to trade one of their next highest earners like Daniel Gafford, who is set to make $12.4 million next season. He has $40.2 million remaining over the next three years on his deal beyond this season.
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