Raptors President Reveals Plan For Potential Luxury Tax Bill Next Season

The Toronto Raptors aren’t ruling out paying into the luxury tax next season.

Is it likely? That’s harder to say. Historically, the Raptors have been reluctant to cross that line. In the last 20-plus years, Toronto has only once paid into the luxury tax, and that was to keep together a team that went on to win a championship in 2019.

Next year’s team is not that.

What the Raptors do have is a group already pushing up against the tax line, and they have yet to win a single playoff game together.

Here’s where things stand: Toronto has $177.3 million committed to 11 players for next season, including Jamison Battle’s partially guaranteed contract. That leaves only $10.5 million in space below the projected tax threshold to fill out the roster with a first-round pick still unsigned.

Once you factor in a second-rounder and at least one minimum signing, that flexibility shrinks to about $6.5 million to spend on the first-rounder.

And that’s where the trouble begins.

The Raptors could end up picking anywhere from No. 1 to 4, or No. 7 to 10. Here’s what those picks would cost in first-year salary:

Pick 1: $13,825,920
Pick 2: $12,370,320
Pick 3: $11,108,880
Pick 4: $10,015,680
Pick 7: $7,520,040
Pick 8: $6,889,200
Pick 9: $6,332,520
Pick 10: $6,016,080

If nothing changes, the Raptors can only stay under the tax by selecting ninth or tenth. Anything higher would require either a cost-cutting move or accepting a tax bill for a team that has not yet shown it can contend.

That said, the Raptors are well aware of the situation. Luxury tax payments are not calculated until the end of the season, so this isn’t an urgent decision.

“I think it depends on the kind of talent we have on the team and the kind of players you have on the team,” said Raptors president Masai Ujiri. “We’ll see how the draft goes and where we are. I think ownership will be fine with it, depending on the type of talent we have on the team.”

So what does that mean in practice?

If Toronto lands the No. 1 pick, ownership likely wouldn’t mind paying into the tax. Adding someone like Cooper Flagg may not make this a championship contender overnight, but it would be the kind of talent worth investing in.

If the Raptors pick ninth or tenth, it’s a non-issue. The team would remain below the tax to start the season.

The real question is what happens in the gray area. What if they land at No. 7, miss out on the top-tier prospects, and are only slightly over the line? Will ownership be willing to pay a tax bill for a team in that position?

If the past is any indication, probably not.

For now, everything hinges on the draft. A lucky result from the ping-pong balls could justify paying the tax. If not, it’s hard to see Toronto committing serious money to a team still searching for its identity.

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