Last year, the NBA had its highest luxury tax distribution in league history. Seven teams finished over the luxury tax and combined for $481 million in luxury tax payments. The remaining 23 teams who finished below the luxury tax received $10.46 million each from the distribution.
The 2021-22 NBA season was projected to have a record-setting luxury tax season as early as the 2021 offseason. The Golden State Warriors, Brooklyn Nets, Los Angeles Clippers, Milwaukee Bucks, Los Angeles Lakers, Utah Jazz, and Philadelphia 76ers collectively spent $481 million last season, making the distribution nearly three times larger than the previous 2002-03 record season.
Now the 2022-23 season is currently projected to beat last season’s luxury tax distribution by a significant margin. Four more teams are set to join the list with the Boston Celtics, Phoenix Suns, Dallas Mavericks, and Denver Nuggets while the Utah Jazz are set to leave. The 10 teams are currently projected to collectively spend $650 million in luxury tax payments. This would have the remaining 10 non-taxpaying teams collect $16.24 million from the distribution.
The Atlanta Hawks and Portland Trail Blazers are also currently over the luxury tax but they aren’t being counted in this projection. There’s a strong possibility they finish below the luxury tax by the end of the season since they are just slightly over the threshold.
Let’s break things down team by team.
2022-23 Payroll: $188.7 million
2022-23 Luxury Tax Payment: $164.9 million
2022-23 Combined Payroll and Luxury Tax Payment: $353.6 million
The Warriors entered the repeater tax last season and spent $170.3 million in luxury tax payments. Their roster expenses nearly totaled $350 million but it was all worth it when they won their fourth title in eight seasons. Their tolerance of the repeater tax will help extend their window of contention if several teams mentioned later get weeded out from it.
The Warriors are currently projected to have a $165 million luxury tax payment once they follow through on their signing of JaMychal Green. However, they still need to sign at least one more player to what will most likely be a veteran minimum contract. That would raise their luxury tax payment to $176.5 million, and it would be even higher if they sign a 15th player. That figure should serve as a minimum for their luxury tax payment projection as they’re unlikely to reduce payroll by trading any of their core players.
2022-23 Payroll: $192 million
2022-23 Luxury Tax Payment: $144.7 million
2022-23 Combined Payroll and Luxury Tax Payment: $336.6 million
The Clippers paid $83.1 million in luxury tax penalties last season, giving them a tax and payroll combination just shy of $250 million. They maximized their spending last year, including utilizing the entire taxpayer mid-level exception and increasing their payroll in their acquisition of Norman Powell and Robert Covington. At one point they were set to pay over $100 million in luxury tax penalties but reduced it significantly by trading Serge Ibaka at the trade deadline.
The Clips are currently projected with a $144.7 million luxury tax payment with 14 players. There is still some room for it to grow since they have one roster spot open they could look to fill. They still haven’t replaced Isaiah Hartenstein with a true backup center, though they could leave that void open since they’ll mostly play lineups consisting of wing-sized players. If they do want a new backup center, they could use their $9.7 million trade exception to acquire one, but that would raise their luxury tax payment significantly.
2022-23 Payroll: $181.4 million
2022-23 Luxury Tax Payment: $90.6 million
2022-23 Combined Payroll and Luxury Tax Payment: $272 million
The Nets finished last season with a $169.3 million…
Read More: Luxury tax 2022-23: How much is each team projected to spend?