The Houston Rockets have been sending mixed signals on their willingness to pay the luxury tax. What’s really going on? And is it really that important to spend it? Let’s look at the last 5 NBA Finals match-ups and see if there are any consistencies.
It seems like the Houston Rockets have been in the news a lot as it pertains to the luxury tax. At one point, Tillman Fertitta is speaking out against the tax, and at another point, Daryl Morey is saying he’s been given the green light to spend the tax.
So what’s really going on? According to reports, the Rockets have been holding off on a deal to acquire Andre Iguodala because of an unwillingness to pay the luxury tax. This doesn’t really make sense though because if Fertitta gave Morey the authority to pay the tax, what’s the hold up on the deal? Besides, it’s not like Fertitta can’t afford it, he’s a billionaire!
Granted I can understand the desire to avoid it if at all possible, as you don’t want to incur any unnecessary costs, but that’s the question. Is the luxury tax necessary? Well, if the Rockets current ownership is serious about putting together a championship team, they’re going to have to come around on paying the tax. To illustrate this point, let’s take a look at some of the recent teams that have paid the tax. In each of the last 5 years at least one of the two teams playing in the NBA Finals has paid the luxury tax. Furthermore, in 3 of the last 5 years, both teams playing in the Finals paid the luxury tax.
In the 2014-2015 season, the Cleveland Cavaliers, who made the NBA Finals that season, paid the luxury tax. In the 2016 NBA Finals, the Golden State Warriors and the Cleveland Cavaliers played against each other and both teams paid the luxury tax that season. The Cavaliers were even repeat taxpayers so they paid significantly more in taxes but how did that work out? They won the NBA championship. I’m sure they didn’t regret paying taxes that season.
In 2017, the Cavaliers also faced off against the Golden State Warriors in the NBA Finals again, and Cleveland paid the luxury tax that year as well. They likely realized when you’ve got a star player like LeBron James, you’ve got to do what’s necessary to win a championship AND show him you’re serious about compiling a championship contender.
This is likely why the following season the Cavaliers paid the tax again as they made it to the Finals again. But the team they faced off against, the Warriors, also paid the luxury tax that year as well. The Warriors ended up beating the Cavaliers, but did Cleveland regret spending the tax? I’d highly doubt it considering they made it to the Finals again, which is all you can ask for.
This past season, the Toronto Raptors and Golden State Warriors played in the NBA Finals and both teams paid the luxury tax. Toronto won their first championship in team history and likely didn’t look back on paying the tax.
So it seems the proof is in the pudding as it pertains to paying the luxury tax. Obviously paying the tax doesn’t guarantee you a title, as the Rockets paid the tax back in 2016 and finished 41-41, but that was under the previous ownership. The Houston Rockets new ownership will have to come around on paying the luxury tax because it’s not a coincidence that in each of the last 5 years a team playing in the NBA Finals was a taxpayer.
The reality is, a billionaire owner like Fertitta certainly has the money to pay it. And if it culminates into an NBA championship, would he regret it? Or would it be viewed as a necessary means for pursuing an NBA championship?