Share “OKC Thunder: How the Thunder could afford...”

OKC Thunder: How the Thunder could afford James Harden and a little luxury

COMMENTARY — Negotiations with James Harden will be the story of the Thunder preseason. Oklahoma City could write a happy ending that could even be a bit luxurious.
by Jenni Carlson Published: September 26, 2012

Plus, if a team exceeds the luxury-tax threshold for four out of five seasons, the rates increase substantially. It's such a big jump that a team could easily pay more in luxury taxes than in salaries.

In a big market, such a significant payout is more easily stomached. That's because in places like Los Angeles and New York, the revenue streams are so much bigger, the biggest being their TV deals. The Lakers and the Knicks have annual TV deals in excess of $100 million, so paying $20 million or $30 million in luxury tax isn't nearly the gut punch that it is in a place like Oklahoma City.

The Thunder's TV deal is less than $15 million a year.

Because the number of potential viewers is less, a small-market team is never going to be able to do a TV deal that compares to what those big markets have. That means a team like Thunder can't spend itself out of a problem.

But does that mean the Thunder is willing to pay nothing in luxury tax?

I say no.

And even though Presti isn't going to come out and say it, I don't think the franchise is opposed to paying some luxury tax.

Consider this: the Thunder has been negotiating with Harden. That alone is a signal that the team would be willing to pay something in luxury tax. If the team wasn't, it wouldn't even be talking with Harden's representatives because the number it would be offering would be laughable.

Just going to the table means that the team is willing to pay something in luxury taxes.

But the Thunder isn't going to do something outrageous. It's never been willing to do that. Look at the Jeff Green situation. Presti loved Green, even tearing up about him. But Green clearly wanted more than the Thunder thought it could handle because Presti ultimately had to pull the trigger on a trade with Boston.

“At the end of the day, you have to do the best thing for the organization,” Presti said Wednesday when I asked him what he'd learned from the Green situation. “That's what my job is. The day that I stop doing what's in the best interest of the organization is the day that they should get somebody else.”

Presti had to balance the short-term on-court benefits and long-term financial obligations. He did with Green, and that's what he'll have to do with Harden.

For this deal to get done, the Thunder is going to have to pay more than it'd like and Harden is going to have to take less than he'd like. Both sides are going to have to sacrifice.

Is paying luxury taxes among the sacrifices the Thunder is willing to make?

Is Presti willing to bite that bullet?

Depends on how big the bullet is.