NBA's luxury tax could cool Heat and Thunder

FORT LAUDERDALE, Fla. - The devil, of course, is in the details. That might have had plenty to do with why NBA Commissioner David Stern sure seemed to have a bit of a devilish grin as he addressed the media in both Dallas and Oklahoma City on re-opening day last Sunday.

To many, the new collective-bargaining agreement certainly appears to be behaving like the previous deal. That?s because it is.

At least at the start, with the same luxury-tax rates as the previous agreement, during a two-year, phase-in period.

And then? And then when everyone is over this lockout-distorted season, when ratings and revenue fall back in place, the luxury tax will become an accounting nightmare for teams that dare to actually spend to win.

For the next two seasons, spend a dollar over the luxury-tax threshold (which is set at $70 million in team payroll for this season), pay a dollar in luxury tax into the league fund. But starting in 2013-14, the tax levels rise as high as $3.75 in tax per dollar over the threshold.

In other words, you ain?t seen nothing yet. But you will.

"A team that goes into the tax in year three, with a $20 million player, is going to pay $45 million in tax money," Stern said during his appearance in Dallas. "We?ll see who does that."

LeBron James, Dwyane Wade and Chris Bosh, of course, all will be $20 million players soon enough, although they won?t be new money added above the tax. But Stern didn?t come up with that $20 million figure out of nowhere.

Based on the way Erik Spoelstra?s team has started the season, the question seems to be: Who can slay the Heat? In 2013-14, it just might be the accountants.

During his appearance in Oklahoma City that followed his attendance at the Heat-Mavericks opener, Stern said again was talking luxury tax, his secret weapon ready to detonate in 2013.

"It does have a bite if you have any team that?s well assembled and you want to keep it together," Stern said of the soon-to-be-absurdly-punitive tax. "So if you have the Thunder over here and the Heat over there, they?re both going to have to deal with luxury tax issues."

Great, just as the Thunder are enticing with their possibilities, just as the Heat are playing up to their potential, a cautionary warning is being fired that neither might endure.

More Stern, "People are saying to Miami, ?Well, you?re going to have a decision to make with respect to one of your big three.? And they may say the same thing to Oklahoma City."

Then came the kicker, "and that?s a good thing." (To be fair, he did continue, "That means you?ve arrived and you?re out there being competitive.")

In the end, the tax, as much as any other aspect of the new CBA, is why the players balked. They understood the eventual chilling impact it could have on current powers (such as the Heat) or future powers (such as the Thunder) continuing to spend to make what is good even better.

When Heat owner Micky Arison addressed the media recently, he made it clear that money mattered, which is among the reasons he favored a hard cap. Considering the punitive tax starting in 2013-14 essentially stands as a hard cap, perhaps we have an indication of where he is headed.

(c)2011 the Sun Sentinel (Fort Lauderdale, Fla.) Distributed by MCT Information Services

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