We all vividly remember the NBA lockout that shortened the 2011-12 season. It dragged on and on as the two sides argued mostly about money, mainly the owners wanting a larger portion. Also many small market teams wanted more parity within the league rather than just being outspent by the big market teams. In order to achieve this the luxury tax had to be raised. Read more after the jump.
By the end of the 2014-15 season the luxury tax will rise substantially possibly forcing many teams to break up their superstar formations including the famous Miami Heat “Big 3”.
As a repeat taxpayer, the Heat will be facing the highest incremental tax rates in NBA history. If, for example, the luxury-tax threshold is established at $75 million — a highly optimistic gain of roughly $5 million from this season — the Heat could be faced with a tax bill approaching $48 million. In total, they would be paying $141.3 million for 12 players.
“They’re going to have to break up their team,” predicted a rival general manager who has done the math.
Unless the NBA’s financial circumstances improve over the next couple of years, Arison will be faced with two unhappy choices: The Heat could run a big deficit in 2014-15 to pursue the championship, or he could break up their winning roster by way of trades, amnesty or by not re-signing James, Wade or Bosh, should they exercise their options to become free agents in 2014.
As we’ve already seen some teams prepare for this future as the Knicks decided not to match the Houston Rockets offer for Jeremy Lin and the Oklahoma City Thunder chose to trade James Harden rather than giving him his desired max contract. In actuality Heat owner Micky Arison can afford to take the loss in revenue the question is will he be willing to? Clearly how the Heat perform during this season and the next will weigh heavily on that decision.