The Warriors and the Cap

The Golden State Warriors have some decisions to make in free agency. Or, maybe they’ve already made them and we’re about to see an NBA roster that will cost the organization almost a half-million dollars next season.

There have been a few rumblings that some front offices think it is unfair that the Warriors can afford to continue to resign high-value core players like Steph Curry, Klay Thompson, and Draymond Green. There isn't a team in the league who wouldn’t jump at the opportunity to pick up one of these guys. In addition, GSW could also, potentially, retain Kevon Looney who will be an unrestricted free agent in just a few days, and Andrew Wiggins who will be entering UFA at the end of the 2022–’23 season.

To understand where I’m going we’ll need to take a little look at how the salary cap works. I know, I know. That’s how I felt too. Bear with me, though. I promise to make it as painless as possible.

The Warriors and the Cap

According to Wikipedia, the NBA originally instituted a salary cap in the 1940s but it only lasted a season. It was introduced again for the 1984–’85 season and the cap was limited to just $3.6 million. Crazy, right? The salary cap for the 2022–’23 season has been set at $122 million.

To put this number into perspective, the cap for the ‘21–’22 season was $112.4 million. (I’m rounding throughout.) The Warriors spent $175.8 million on player salaries and$170.3 in luxury tax payments for a total of $346 million. For the 2022-’23 season, the Nets, Clippers, Bucks, Lakers, Jazz, and 76ers were the only other teams in the league to pay the luxury tax. The Brooklyn nets came in second at $267 million in salaries and taxes. It’s no secret that the Warriors have the most expensive payroll in the league and it’s not close.

The Question

If you’ve read this far, you probably already know that the point of the luxury tax is an attempt to create parity between larger market and smaller market teams. One might argue that in the case of the Warriors, it isn’t working as designed. The Warriors can afford the luxury tax to maintain their proven core and continue to add players talented enough to demand hefty contracts in their own right.

Everything I know about the Warriors leads me to conclude that Curry, Thompson, and Green will be Warriors for as long as they want to be. This means that when the aforementioned Looney and Wiggins are free agents, to keep them they’ll take on an even steeper luxury tax payment. The good news for the Warriors is that they can afford it.

Some may say that because of this, the luxury tax isn’t working. Let’s consider another perspective by stating a fact and asking a question.

Fact: The Golden State Warriors have eight players on their current payroll who they drafted and three undrafted players.

Question: Should the Warriors be penalized for retaining talent that they drafted, invested in, and developed at the same rate as teams who are constantly trying to build through free agency and trades?

My Take

The simple answer for me is, no.

Imagine you own a business in an industry with a lot of competition. You’re the best at recruiting, training, and developing talent and that fact is, more or less, universally acknowledged in your industry. Some other company is always ready to aggressively recruit your employees because they’re excellent.

Add a set of rules that says you’re not allowed to simply pay the talent that you’ve built your company with enough to deter them from going to the competition. You have to pay a tax on every extra dollar you spend beyond an arbitrary number an oversight committee has determined each team is allowed to spend. Even when you pay the tax, the other companies complain to the entities in charge of the taxation policies.

Should those complaints be acted upon, hypothetically, you could end up with a situation where the company may not be allowed to maintain its talent regardless of how much luxury tax they can afford to pay.

It just doesn’t seem fair to me. Teams that don’t build and maintain an excellent development system shouldn’t arbitrarily get to benefit from the investment of another organization just because the rules say so. As it is, teams that have poor organizations are given very little incentive by the NBA to grow in this way. We know that every season, a few teams are going to be bottom feeders, simply unable to put together even a near-winning season.

The ability to purchase a team upgrade in free agency has become a yearly game of who can we throw together and hope this season ends up better than last for a significant number of teams in the league. See Leonard and George, LeBron and AD, KD and Irving, LeBron and all of the oldest one-time All-Stars left in the league plus Westbrook and AD sometimes. A handful of teams, like the Warriors, are careful and deliberate in their team building and they’ve found the secret sauce. I think that kind of long-term development should be celebrated. If you can’t muster excitement I’ll settle for encouragement. At the very least, it shouldn’t be penalized.

Not Just Business

Let’s go back to that company that you built and talk about the employees for a minute. The vast majority of us have the freedom to choose where we work. Imagine starting at your first job out of college. The company values and invests in you. Months turn into years, and the company and its employees enjoy success together. While you work there you grow up, start a family, and build your own brand.

Then one day, because the competition is pissy that they don’t know how to do what you did, someone decides it no longer matters that you can afford the tax. Your employees have to uproot their families and move their entire lives, leaving the organization they helped build.

In fairness, it seems unlikely that the NBA would be an organization that would let it get to this point. The only alternative would seem to be a team losing young talent that they invested in fairly arbitrarily. Talent that they scouted and developed into players the that other teams consider assets.

Either way, the Warriors are being punished for their excellence. I would much prefer it if the NBA provided more incentive to be a more complete organization. There are opportunities through the draft process and with the G League affiliates to provide just that.

The Draft

Parker Ainsworth wrote a great piece suggesting that instead of a draft, organizations should have to pitch their teams to the players.

I mean, if you don’t see the similarity between the draft process and people being sold at auction… you’re either not paying attention or you don’t want to see it. Young men having to give up that level of autonomy for the privilege of playing in the NBA seems antiquated and wrong.

Then, when young players are drafted by teams known to have… we’ll call them organizational challenges… or lack a development system they are called busts. All of the blame goes on the player but the organizations are supposed to be professionals at this process. Surely at least some of the accountability should rest with the organization.

How many times have we seen a player labeled “bust” or it looked like their careers were declining, they get traded and everything looks different. Maybe they weren’t being utilized properly. Sometimes, the team needed a player to be something that simply wasn’t possible for their nature.

Sometimes situation is everything. Some of us can produce at a high level no matter the situation we find ourselves in. Most of us, though, need some specific things the perform at our best. The specificity and volume and can vary significantly from person to person.

Along with the Warriors are a handful of teams that have it figured out and those organizations share some similarities from the top down. The NBA should make some of the practices these organizations are using requirements in the interest of caring for players as humans who are professional athletes rather than professional athletes and humans when it’s convenient.

Professional athletes make a lot of money so I can see how it’s easy to say that makes up for challenges they have to deal with. But let me remind you that we didn’t see fit to allow these exceptionally tall men sit in chairs appropriate to their physical stature until a global pandemic forced us to do so. I’ve had an ergonomic chair at every office job I’ve ever had. Just sayin’.

Relegation

I know this will never happen, but I would love to see the NBA adopt a relegation system. What better way could there be to really incentivize teams not to suck out loud?

Of course, there’s every possibility that this is just offseason smoke. Once the recency of the Warriors' win simmers down, I could blow away like so much smoke.

I’ll just say I hope I never see the day when NBA teams are penalized for being excellent.