The Thunder and the luxury tax

Kevin Durant is concerned. The NBA’s new proposal could potentially have a great affect on his team staying together.

One reason, among many I’m sure, that he’s not a big fan of this new proposal.

The Thunder, a small market club without deep pockets, has a lot of young players to re-sign. Durant’s already locked up to a max extension, but with Russell Westbrook due one along with James Harden, Serge Ibaka and even Eric Maynor, Oklahoma City could have a difficult time keeping its young group intact.

I wrote about how a hard salary cap could potentially destroy the core, but the league’s latest proposal includes a stiff luxury tax for teams that spend over the cap. And when Durant was asked about, he wasn’t happy about it.

Wouldn’t you know it though, the NBA’s labor ninja was stalking Durant’s comment and came swooping in to correct him.

Question is: Is the NBA correct about that? Noam Schiller of Hardwood Paroxysm has an interesting take:

This time, though, my delusions of grandeur have caused me to feel somewhat involved in this most recent “David Stern is trolling on Twitter again” episode. And as a person who mistakenly thinks he is involved in something is wont to do, I must point out that Kevin Durant is right, and the NBA is wrong.

The NBA is absolutely correct that teams will have the chance to re-sign their own free agents. All recent indications have shown that the NBA and its owners have relented on keeping Bird Rights exceptions for luxury-tax paying teams. Theoretically speaking, this means that teams that are 30 million under the salary cap and teams that are 30 million into luxury tax territory have the exact same abilities to re-sign players who are finishing their contracts.

The issue, though, was never the legality of re-signing players – it was the cost. And it is the cost that will deter small market teams such as Oklahoma City. Re-signing Serge Ibaka to an extension is all fun and games if he clocks in at 5 years, 48 million (which I would randomly declare reasonable in old CBA terms and may or may not be way off), but how do you feel about 5 years, 55 million? 60? 65? 80?

This is the effect of the new luxury tax. Reports regarding exact amounts still vary, but at the very least, the first 5 million above the threshold should see penalization at a $1.50 to $1 rate, with growth every 5 or 10 million jump. As such, the decent back-up point guard that you signed after  Maynor bolted for a bigger deal on a team without Russell Westbrook can suddenly cost you like your starting center. Never mind that you’re already on the books for one of those.

The league is preaching competitive balance. And by that, it means balancing out to help small market like Oklahoma City compete with Boston, Los Angeles and Chicago. But by doing that, they could impede a well-managed team like the Thunder where talent and players have been stockpiled.

The league wants to equally distribute talent out among the Minnesotas and Milwaukees of the world, but what about a team like the Thunder where all that talent is already on the roster? You really want to equally distribute that talent when a small market team is already doing it right?

Which is a major reason I see this competitive balance thing as a red herring for the league’s owners to get the best deal possible. By preaching to help the little man, the league is also trying to line its pockets with a system that favors the owners in every way.

A team operating on a budget like Oklahoma City isn’t going to bust into luxury tax territory, especially when there’s a stiffer penalty against repeat offenders. Sure, the Thunder have a good chance of keeping the core together.

But to do it, they’ll have to spend more money. And therefore, greatly risk a loss on the season in terms of money. Isn’t that exactly the opposite of what the league’s saying it’s fighting for?