WARRIORS STAND TO GAIN FROM CAP RULES
League, players’ union agreed Monday to financial framework for 20-21 season
The NBA and National Basketball Players Association agreed Monday on the start of the 2020-21 season, offseason timeline and a finalized salary cap. The Warriors and highspending teams like them could be the beneficiaries of the agreement.
Negotiations between the league’s owners and players last week settled on a shortened 72game season to start on Dec. 22, and now the two sides have agreed to financial framework for the 2020-21 season.
Despite steep projected revenue declines due to the coronavirus pandemic, the 2020-21 salary cap will resemble last season’s at $109.1 million with the luxury tax line set at $132.6 million. The free-agency negotiating period will begin on Nov. 20 at 3 p.m., two days after the draft. Signings can be made official starting at noon on Nov. 22.
Here are some key ways these financial numbers will impact the Warriors next season, and beyond.
LUXURY TAX RELIEF >> The NBA will provide financial relief to teams paying the luxury tax,
according to ESPN. Payments for tax-paying teams will decline in proportion to the league’s revenue at the end of the season. If the NBA sees a 30% decline in its revenue because fans can’t safely attend games, the Warriors’ luxury tax bill would be reduced by 30%.
For example, with their current roster, plus a salary owed to the No. 2 overall pick, the Warriors are expected to pay upwards of $50 million in luxury taxes. A 30% decline in league revenue would drop that figure by $15 million.
MORE REASON TO USE THE TRADE EXCEPTION >> This relief could also motivate the Warriors to use the $17.2 million trade exception it created by trading Andre Iguodala last summer. As ESPN’s Bobby Marks calculated, if the Warriors used the full amount of the exception and league revenue decreased by 30%, the Warriors would save nearly $50 million.
Indications going into the offseason were that Golden State’s front office would only use the trade exception on a player who markedly increases its chances of going to the NBA Finals. While that is still the case, ownership may not take as much convincing to spend on a rotation-level player given the expected savings.
It’s unlikely the Warriors use the full $17.2 million exception — there doesn’t seem to be an available player worth that investment — but players like San Antonio’s Rudy Gay, Phoenix’s Ricky Rubio, Philadelphia’s Josh Richardson, Miami’s Kelly Olynyk, Memphis’ Jonas Valanciunas and Milwaukee’s Eric Bledsoe all fit within that exception. MID-LEVEL EXCEPTION AMOUNT IS SET >> Because the 2020-21 salary cap reflects that of last season’s, amounts for the mid-level exception will remain the same. The Warriors will have up to $5,718,000 to spend on a single player or split among multiple players.
With 13 players under contract, and a 14th spot earmarked for the first-round pick, using the full amount on a single player makes the most sense given the roster crunch. A veteran such as Marc Gasol, Serge Ibaka or Mason Plumlee could help address the need for a center. Danilo Gallinari, a 6-foot-10 power forward who averaged 18.7 points and 5.2 rebounds per game while shooting 40.5% from 3-point range for the Thunder last season, recently hinted he would take less money to play for a contender.
Something to note as the NBA draft approaches: the free-agent options at center are better than the options on the perimeter. It’s hard to see players such as D. J. Augustin, E’Twaun Moore, Kent Bazemore, Justin Holiday, Wesley Matthews and Maurice Harkless playing meaningful minutes in the playoffs, but they could provide helpful depth.
This is a pivotal offseason for the Warriors as they aim to vault back into contention next season. The financial impact of the pandemic raised concerns about if they could afford to rebuild around Stephen Curry, Klay Thompson and Draymond Green, but this financial relief will make doing so more palatable. Not doing so, however, may now be inexcusable.