The era of player empowerment and massive contracts from the NBA’s lucrative broadcasting deals has been felt throughout the league in the last decade or so. Starting with “The Decision” by LeBron James when he left Cleveland to join the Miami Heat, teams have been shelling out big-time for superstars who are unhappy with their situations. While only a few of them have panned out to a championship, it’s spurred some concern about competition across the league.

Enter the luxury repeater tax. While not a new tactic in the collective bargaining agreement between players, team governors, and mediated by the NBA itself, the repeater tax serves to multiply the amount of money a team is paying if they go over the salary cap even more-so than the regular luxury tax threshold. It’s supposed to provide a competitive advantage to small-market teams which don’t have the revenue generation of a Lakers, Warriors, or Celtics franchise with abundant resources that come with success in a largely-populous city, and to a certain degree, it does exactly that: It incentivizes teams to be smart about their roster construction without just throwing money at big names. It benefits everyone without really having a cost.

Unless you happen to draft very well.

The Golden State Warriors have become lauded for their ability to build through the draft. The franchise core of Stephen Curry, Klay Thompson, and Draymond Green were all drafted there. Emerging star Jordan Poole and hard-nosed anchor Kevon Looney were drafted there. Up-and-comers Jonathan Kuminga and Moses Moody, only in their 2nd year and already having played meaningful playoff minutes in a championship run, were drafted there. The Warriors are likely going to have to make decisions on which of these guys to keep because they’ve hit well on their draft picks in recent years… Well enough that these guys are all getting or likely going to get paid.

A lot of finger-pointing to Andrew Wiggins’ contract (considered both an albatross and overpay before he joined the team) paints this as a situation the Warriors have gotten themselves into by paying all that money for a good player, and that’s true to a certain degree. The problem is that Wiggins is one of three pending extensions for guys who could easily get their maxes, the other two being Jordan Poole and Draymond Green. A lot of sentiment is that they can keep only two of these three at the salary they deserve, but reality still puts the Warriors in luxury tax territory even if they didn’t work out an extension for only one of them.

Adam Silver, the NBA’s commissioner, has naturally done a cover job for his reasonings when Warriors owner Joe Lacob called out the league rules punishing a team for developing largely in-house. However, while he tries his best to circle around the sentiment that it is indeed a barrier for well-drafted teams, he manages to admit that the model encourages “talent sharing”. This is really all the evidence we need to see that, according to the NBA, teams are not meant to develop to win. Silver is trying to strike a strange middle ground between aiming to pick drafts well and player movement, likely because the drama of free agency keeps the press lines hot during the off-season, but in reality, this punitive device is going to hurt whoever tries to replicate the Warriors blueprint a lot more than the team everyone loves to hate.

Let’s take, for example, the Memphis Grizzlies. It’s clear that Ja Morant and Jaren Jackson Jr. are the guys over there, but the Grizz are a very young team with a lot of players drafted there who are just starting to show their talent: They actually have a similar count of drafted players to Golden State on their roster. So what happens when those guys all start to hit their stride in their primes? Memphis won’t be able to retain talent which they developed, and it’s going to keep them from success they’d otherwise have. The Denver Nuggets are in a similar situation: Nikola Jokic, Jamal Murray, and Michael Porter Jr. are all drafted. They have up-and-coming talent like Bones Hyland, and a history of doing well in the draft outside of those guys. So what happens when their talent outgrows the team’s ability to pay? They no longer have the competitive advantage which they earned. If you look at teams like the Pistons and the Wolves, their cores are primarily self-drafted, and they’ll have to reckon with these same rules in a few years if those players start to get good.

The luxury tax is a beneficial thing by many stretches to initially maintain an element of general, surface-level competitiveness; but without specific rules for drafted players to help teams retain those they’ve developed legitimately all on their own without it costing a fortune, that competitiveness does have a falling-off point. It keeps teams which can buy their way out of development hell - like the Lakers - from fixing issues within their organizations, an advantage which plenty of teams don’t have. It’s anti-player empowerment because it forces teams to make decisions which can excommunicate guys who have come to call an organization home. The Warriors are a large-market team, and can afford to keep shelling cash until they finally hit their spending limit: The same cannot be said for other teams in smaller markets which don’t have as many draws for stars to make their homes there, nor the resources to spend all that money. ESPN’s Brian Windhorst said it himself that the Warriors won with their checkbook, despite most of those high-contract players being drafted:

Other teams aren’t going to have that ability when they don’t generate as much revenue in much smaller markets to meet the demands of the tax.

A solution would be to implement ceilings on the luxury and repeater tax when it comes to contracts of players drafted by the organization: It still gives a margin for small teams without spending power to sign bigger names, while allowing them to keep guys which have gone through their development systems. It encourages player loyalty, a narrative that has become increasingly important as player movement becomes more prominent. While it may not be easy, it would help maximize competitive efforts not just in the Bay, but across the NBA landscape. It can help teams like the Pacers or Kings escape purgatorial mediocrity by putting an emphasis on and rewarding in-house development.

What Commissioner Silver said about talent sharing has some merit to it, but teams shouldn’t be so severely punished for being good at their jobs and, frankly, being selfish about it. It connects players to the fans who can get behind rooting for a guy long-term if they’re more optimistic he will stick around. There are far more benefits than there are costs to a decision like this. Is it likely to happen? Maybe a year ago it wasn’t, but the success of the Golden State Warriors surely calls into question the idea of “what if teams were able to invest in their players for longer periods of time without as much worry about them improving?”. CBA negotiations are due after the 2023-2024 season, and it’ll be interesting to see which of the well-drafted playoff teams begin a push for encouraging, instead of punishing, homegrown hoops.

(Photo credit: Andrew D. Bernstein / Getty Images)