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Golden State Warriors Set to Face a Huge Tax Problem Hampering Their Return in 2021

Golden State Warriors Set to Face a Huge Tax Problem Hampering Their Return in 2021

Owing to their disastrous record, the Golden State Warriors are not going to complete the rest of their regular-season games. The Warriors stand last in the West, in what seems like a reality-check for the management. For a team that has never missed a trip to the NBA Finals since 2015, this season must have been hard to endure. 

Ever since the dynamic pairing of the Splash Brothers took a hit, the Bay team has struggled to cope up with their opponents in the league. From losing just 9 games in the 2015-16 season to experiencing defeat in 50 out of the 65 they have played this year, the team has come a long way. 

As the coronavirus pandemic has caused financial troubles everywhere, the NBA is largely affected as well. With a postponed 2020-21 season, the league is yet to determine the salary cap for the upcoming year. However, NBA Insiders have projected the amount to come down as a result of the economic hit.

Golden State Warriors are expected to pay a humongous amount as luxury tax

The Warriors, who are in dire straits with respect to their current season record, need to improve. It is no doubt that the return of Steph Curry and Klay Thompson will provide a huge boost to the team. Moreover, the team is also reported to claim the top spot in the West by paying an extra luxury tax amount in order to retain their stars. 

As per ESPN’s Adrian Wojnarowski and Bobby Marks, the Warriors could see their luxury tax amount skyrocket for the upcoming season. “The CBA has a projected 2020-21 salary cap of $115 million, with a luxury tax threshold of $139 million. With the reality of lost revenues coming, some teams fear that cap and tax could fall as far as $25 million to $30 million.”

“Without the league and union negotiating a new mechanism for the cap in the coming months, the league could be facing 25 of its 30 teams trapped in luxury tax payments based on projected payrolls — something that would paralyze free agency and many organizations’ ability to operate financially.”

“For example, Golden State’s projected tax penalty of $45 million would rocket to $160 million before free agency even started.”

What does it mean for the Warriors?

Well, the Warriors have a lot of time in their hands. Most importantly, the lowered pressure of not competing in Orlando gives the management more scenarios to work out. The team, enduring a downfall this season, might still go big next year to regain their #1 spot. 

The league has delayed free-agency along with the draft, and the Warriors will be on the lookout for top talents. If the Warriors find luck in the lottery, their top-five pick will earn them more success. Apart from that, a $17.2 million trade exception awaits them. The front office will be determining where to spend the big bucks when it comes to restructuring the team. Above all, the increased luxury tax is also something to keep in mind. To get back on top, the team needs someone who can get them wins when their star players are out. 

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