Phoenix Suns general manager James Jones spoke on Wednesday for his end-of-season availability and discussed something that will be a factor this offseason: the luxury tax.
The Suns’ nine guaranteed contracts on the books for next season add up to $128.3 million, per Cleaning the Glass, which already puts them $6 million over the cap and nearly within $20 million of the luxury tax line set at $149 million.
That is not including any money going towards restricted free agent Deandre Ayton, and again, only accounts for nine players.
To put it simply, Phoenix will almost undoubtedly be a luxury tax team for the first time in over a decade, meaning the organization will have to pay extra money because of how far it is putting its salaries over the cap.
This can get hairy for an NBA franchise quickly because the deeper a team goes over the tax line, the more expensive the fees get once a team gets past $5 million over the line, $10 million over and so on by increments of $5 million.
And then there’s the rule in place for repeat offenders, which makes those penalties even more severe if a franchise has been in the luxury tax for three of the past four seasons.
That is relevant for the Suns because of hefty long-term salaries for Devin Booker, Chris Paul and Mikal Bridges, along with Booker potentially eligible for a supermax extension this summer, Cam Johnson eligible for an extension off his rookie deal and Ayton’s potential new deal.
The Suns can bring everyone back. It’s just a matter of how much in luxury tax penalties they are willing to take on.
Jones was asked about the possible extensions coming for Booker and Johnson.
“That’s a part of the business. As your team improves, typically your payroll increases,” he said. “We’re focused on improving the team. And those guys, they deserve the credit, they deserve the accolades and the financial rewards that come with being good players and productive players. It doesn’t preclude us from doing anything.
“We’re not talking about luxury tax issues or avoiding those things. That’s not something that’s going to prevent us from continuing to build this team and keep this team together.”
Suns owner Robert Sarver on Arizona Sports’ Burns & Gambo last July discussed the luxury tax’s arrival coming soon.
“To answer the question directly about the tax, yeah, that’s going to come with the territory here,” he said. “I’m not sure whether it’s next season or the one after, but it’s definitely coming and we know that’s coming so we see ourselves as a taxpayer. That’s just part of what it’s going to take to try to bring home a championship.”
By all accounts, it sounds like Phoenix will be able to keep together its promising, young core that could keep it a contender for years to come. For now, Suns fans will have to wait until the summer to see if that is indeed the case.
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