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  • The cost of competition has reached an all-time high for NBA owners, with Golden State and Cleveland at the head of the league's new arms race.
By Rohan Nadkarni
August 28, 2017

After a summer of superstar movement, it’s clear there is only one way left to compete for a championship in the modern NBA—you have to form a “superteam.” A duo simply won’t cut it anymore.

Realistically, with the Warriors rolling out four top-20 players in their starting lineup, other teams need at least three max-contract-caliber players who live up to a star billing. It’s why the Rockets are so desperate to acquire Carmelo Anthony. It’s why the Wizards are taking a big risk on Otto Porter. And it’s why the Celtics were willing to move assets for Kyrie Irving (We're still waiting on that). This clustering of stars produces many interesting byproducts, perhaps none more interesting than the increased importance of team owners.

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Depending on how you feel about billionaires and the uber rich, the superteam era is putting some level of pressure on NBA owners. In what’s already becoming (if not become) a player-dominated league, NBA owners will be forced more to spend more than ever if they hope to win a title in the coming years. And it will be increasingly transparent which teams are completely committed to winning, and which ones are trying to cut corners.

The importance of owners is two-fold. Not only will they need to be willing to hand out max contracts that are larger than ever thanks to the league’s recent cap boom, they will also have to likely pay a punitive luxury tax to keep that team together.

The obvious examples here are the Cavaliers and Warriors. Dan Gilbert, so far, has paid record-breaking amounts of money to keep Cleveland’s title core together, paying high salaries and high taxes on those salaries. How far is Gilbert willing to go, though? There have been persistent rumors about the Cavs trying to trade Iman Shumpert this summer, a move that screams cost-cutting. Shumpert wasn’t exactly a difference maker for Cleveland in the Finals, but he’s the kind of young-ish perimeter body the team desperately craves. If LeBron James was actually committed to Cleveland for the long-term, it’s possible Gilbert may have already shed salary because he’d know his best player couldn’t bolt right away.

Nathaniel S. Butler/Getty Images

There were many factors that led James to return to Cleveland in 2014. It didn’t help when the summer before, Heat owner Micky Arison amnestied team-favorite Mike Miller for purely financial reasons. After James had sacrificed some money to sign in Miami, the Miller move was on some level a sign that ownership wasn’t as committed as he was.

The Warriors’ brass will face decisions similar to Cleveland and Miami in the coming summers. Kevin Durant did the Dubs a massive favor by taking a paycut on his most recent contract. But Stephen Curry is now signed on a supermax deal after being on a bargain contract, and Klay Thompson can command his own huge deal in 2019. Golden State can certainly keep their core four together by handing them max deals. But the result would be an astronomical payroll that—with tax payments—could cross the $1 billion combined over the course of a few years.

This isn’t to say anyone should have sympathy for NBA owners. They are, after all, the richest of the rich, with a salary cap that deflates the salaries of megastars like Curry and James. But this is the new cost of doing business. The Wizards have three max guys—will they be willing to add a fourth if they want a real chance against Golden State? If all the 76ers prospects pan out, will ownership be willing to max out a bunch of players seemingly at once? If most owners blanch at the thought of having three or four max guys, competitive balance will still be an issue as long as the Warriors keep their team together.

Players are savvy enough to know which owners will spend, and how to leverage their owners to make sure they continue to do so. Mostly lost in the hysteria of Durant’s decision to leave the Thunder in 2016 was how Oklahoma City ownership for years refused to dip into the luxury tax. As a result, OKC wouldn't offer James Harden the money he wanted. Fearful of having to pay too much, the Thunder traded Harden, and broke up a potential superteam that could have maybe kept Durant, Harden and Russell Westbrook in the same city for their entire careers. Durant now plays for one of the richest ownership groups in the league, and he’s created a lot of public pressure on them to continue to spend after taking less money.

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Money will not be the only factor, though likely the biggest. In a league with players who aren’t afraid to be outspoken, personality may matter to a degree as well. It’s no secret James and Gilbert don‘t get along in Cleveland, which could make it more palatable for LeBron to leave a second time. It’s possible political leanings could one day sway players a certain way, though dollars and opportunity will likely still come first.

While the Warriors seemingly have a stranglehold on the NBA right now, they’ve at least forced teams who want to compete to go all-in. The weapons race is fun! As a result, Golden State has driven up the cost to compete. The number of owners who are able to stomach to rising costs will go a long way in determining the competitive balance of the league. Over the next few seasons, it will be more obvious than ever who is actually willing to take down the Warriors.

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