Report: Thunder could pay massive 2018-19 luxury-tax bill to retain core
Oklahoma City is one of the smallest cities in America to boast a professional sports team, but it's clear the Thunder's bankroll is anything but tiny. Even after reportedly agreeing to a five-year extension that brings Russell Westbrook's outlook to an NBA-record $233 million over the next six seasons, the franchise may have its sights set on new financial stratospheres.
The Thunder's ownership group is reportedly committed to taking on a massive luxury-tax bill next season, according to former NBA general manager and current ESPN analyst Bobby Marks.
That suggests the Thunder don't envision recent offseason additions Paul George and Carmelo Anthony as rental players and will attempt to retain their new core past 2017-18. George and Anthony each have player options for the 2018-19 season reportedly valued at $20.7 million and $27.9 million, respectively.
George will almost certainly decline his option, entering unrestricted free agency. The Thunder hold his Bird Rights, allowing them to go over the salary cap to re-sign him, and if he makes an All-NBA Team, he'll be eligible for the Designated Veteran Player Extension - what Westbrook reportedly agreed to Friday.
Anthony may very well decide to execute his player option, as he'll be 34 years old next summer and, depending on how this year with the Thunder goes, may not be able to attract a significantly better deal on the open market.
The 2018-19 luxury tax threshold is projected to be $123 million, based on the league reportedly informing teams to budget for a $101-million salary cap. Teams whose salaries exceed the tax limit pay additional fees based on how much they overspend. Unless the Thunder dump about $13 million in salary before the end of this season, they'll have to pay the even more exorbitant repeater tax, after being a tax-paying franchise in three of the past four seasons.
For instance, the Thunder would pay an additional $2.50 per dollar every dollar over the tax limit, up to $5 million; the taxes become increasingly punitive for each tax bracket, eventually reaching $4.25 per dollar for teams that spend greater than $20 million over the tax limit. If the Thunder entered 2018-19 with a $143-million team salary, they would pay approximately $65 million in luxury taxes.