The league is interested in replacing the highest luxury tax with a hard line cap.
The NBA is looking to add a “upper spending limit” instead of the largest luxury tax line, a change that the NBPA currently resists, ESPN’s Adrian Wojnarowski reports.
The way teams like the Warriors and Clippers have easily surpassed the upper luxury tax, leading to large payrolls and significant penalties, has led the NBA to try and implement a hard cap on that line so no team can surpass it. According to Wojnarowski, the NBPA considers this issue a “non-starter” in the next collective bargaining negotiations.
“There will be a lockout before there’s a hard cap,” a source told NBA insider Marc Stein.
The current CBA expires following the 2023-24 season, but both sides can agree by December 15 to opt-out of the CBA in December ’23.
The NBA’s point of view is that the current system makes it harder for there to be a level playing field for all 30 teams, and that the current gap in spending between the largest and smallest markets is unsustainable long term. Additionally, the league argues that more balance in this area will lead to higher salaries and revenues.
However, Wojnarowski also reports that some smaller market teams don’t think a hard limit would help create the balance the NBA wants, and would ultimately force them to break up their teams despite wanting to spend beyond the luxury tax line.
If this would go through, the NBA would need to find a new way to share revenue without the luxury tax, according to Wojnarowski.
Currently, 10 NBA teams are above the luxury tax line for this season, and the Warriors, Clippers and Nets are paying a combined 61% of those penalties after combining to pay 73% last year.
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