Just four NBA teams finished the 2019/20 season in tax territory and none of those clubs will be on the hook for a substantial bill. As Tim Reynolds of The Associated Press relays (via Twitter), this season’s four taxpayers, along with the penalties they’ll pay, are as follows:
- Portland Trail Blazers: $5,082,084
- Miami Heat: $2,461,242
- Oklahoma City Thunder: $2,102,278
- Minnesota Timberwolves: $497,502
Since half of the luxury tax penalty money is reallocated to the teams that finished out of the tax, those 26 non-tax clubs are in line for modest payouts of $195,060, per ESPN’s Bobby Marks (via Twitter). Marks notes that the $10,143,106 in total tax penalties represents the lowest leaguewide amount since the NBA introduced its luxury tax system in 2002/03.
While those four teams wouldn’t have been subjected to big tax bills either way, they received a small break from the NBA, according to Marks and Eric Pincus of Bleacher Report (Twitter links). The league implemented its anticipated tax adjustment for 2020/21 a year early, reducing teams’ penalties by the percentage that the league’s basketball related income (BRI) fell short of the preseason projection.
As cap expert Albert Nahmad and Shams Charania of The Athletic detail (via Twitter), the NBA ultimately finished with a BRI figure of $6.865 billion after initially projecting $8.034 billion. That means the league only earned about 85.4% of its anticipated BRI and in turn only charged taxpaying teams 85.4% of their tax penalties.
For example, Portland should have owed $5,947,943 in tax penalties, but was only charged $5,082,084. The other three taxpaying clubs received similar reductions.
The Blazers only saved about $866K based on the league’s leniency and the other three clubs saved less than that, but the temporary change the tax system could have a significantly greater impact in 2020/21, when more clubs project to be in the tax and the NBA is bracing for a more substantial loss in revenue.