The Nets will start next season with a payroll of about $98 million — well above the NBA’s tax threshold, which is set at $71.748 million for 2013–14. Under the terms of the league’s current collective bargaining agreement, teams above the threshold have to pay a tax that starts at $1.50 for each dollar they exceed that figure. But that tax escalates the more a team goes past the threshold, eventually rising to $3.25 per dollar once a team has exceeded it by $15 million. The Nets, therefore, will be on the hook for a whopping $75 million tax bill next season — the largest in NBA history. (Their $98 million payroll will actually cost them about $173 million.) These days, Nets owner Mikhail Prokhorov is more Steinbrennian than even the Steinbrenners themselves.
The comparison between Prokhorov and George Steinbrenner has been made before, including in this magazine by Will Leitch. Prokhorov did a lot of talking when he assumed control of the Nets, guaranteeing a title within five years. And he was a made-for-the-tabloids personality, what with the jetskiing and the playboy lifestyle and, of course, the billions of dollars in his bank account. NBA contract maximums prohibit him from throwing absurd amounts of money at individual free agents, but even under the complicated NBA salary system, he can run up a high total payroll, as long as he’s willing to pay the luxury taxes.
For many years, of course, spending lots and lots of money on payroll was sort of George Steinbrenner’s thing. And his sons, Hal and Hank, continued that tradition once they assumed control of the franchise. The previous Major League Baseball luxury tax had been designed to discourage teams from going over a set threshold, but what it mostly did was discourage everyone but the Yankees from doing so. Under baseball’s current CBA, though, teams are taxed even more for going over the threshold, and even the Yankees appear to be abandoning their win-at-any-cost strategy: They swear that they’ll get under the $189 million threshold, if only so they can go back over it without being taxed as repeat offenders. Baseball’s luxury tax doesn’t prohibit teams from spending as much money as they want, the way a hard salary cap would. But it does force rich teams, even the Yankees, to consider exactly how badly they want an astronomical payroll. It’s why the Steinbrenner brothers these days are willing to spend huge amounts of money, but not any amount of money.
Prokhorov, though, appears unfazed by the huge tax bill he’d owe if the Nets do indeed begin the season with a $98 million payroll. The Nets have other motives here than simply fielding a competitive basketball team: They want to make a splash on the local sports scene and maybe steal some attention away from the Knicks. And they’ll want to continue to establish Brooklyn as a destination for free agents or star players seeking to be traded. Neither of those things is an immediate concern of the Yankees, who already dominate back pages and have long been an attractive option for free agents. But Prokhorov’s willingness to spend would make the late Yankees owner, if not Hal and Hank, smile.