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Mark Cuban: It’s not the new luxury tax, it’s the restrictions

Jul 26, 2012, 6:10 PM EDT

Dallas Mavericks owner Cuban reacts during the second half of their NBA basketball game against the Los Angeles Clippers in Dallas Reuters

Mark Cuban has led the Dallas Mavericks to be proactive — after winning an NBA championship he started to work to shed the team of long-term salary. It’s not that he didn’t want to win — come on, this is Mark Cuban we are talking about — but he saw the writing on the wall with the new Collective Bargaining Agreement and knew he needed to change how he does business. Now. He laughed at the Nets owner when he didn’t.

Most people (myself included) talk about the increased luxury tax bills that start hitting in 2014. To use an easy example, the Lakers $16 million dollar-for-dollar tax bill from this year would have been $52 million in a couple years. That’s a steep tax. The kind all these owners would call “socialist” in any of their other businesses.

But it’s not the money, Cuban told ESPNDallas.com.

In actuality, Cuban doesn’t fear the larger luxury tax hammer the CBA starts swinging in 2013-14 nearly as much as the roster handcuffs it will slap on luxury tax offenders….

“The money is secondary to the team-building strategy,” Cuban said. “Once you get above the tax apron [the $70.307 million luxury tax plus $4 million], there are limitations in player movement that I think have a big impact on how to build a team.”

Already teams over or close to the tax line can’t use their full $5 million mid-level exception, they only have a taxpayers’ $3 million exception. (Teams just under the tax line can use the full MLE but if that takes them over the line there is a hard cap at $74.3 million. A real hard cap.)

The bigger one kicks in in 2014 — teams in the tax cannot do sign-and-trade deals. That means the Lakers could not have gotten Steve Nash this summer. Next summer Brooklyn could not try to do a sign-and-trade deal for Dwight Howard (as if it’s not tough enough to move him as is). The sign-and-trade has long been a favorite tool of high spending teams and it goes away next summer for taxpayers.

So Cuban adjusted. It cost him wins last year and it will again this year, they have fielded a competitive but not contending team around Dirk Nowitzki. But most of their new contracts are one-year deals, and Dallas will be in the free agent game next summer. Unlike Brooklyn, they could make a play for Howard next July.

For our sanity, let’s hope the Howard situation is resolved by then.

  1. hannsta - Jul 26, 2012 at 6:25 PM

    I have to say Im hearin a lot of people writing off the mavericks..no body called their team of 33-34 year olds a contender last year until they won now with similar looking peices, some actually a bit younger, they are gettin the same flak. Not a mavs fan and dont think they can do it again but silly to write them off allready.

    • mannyfresh209 - Jul 26, 2012 at 6:33 PM

      There’s a difference between being a good team, and being a legitimate contender. I don’t think anybody would write Dallas off if there weren’t the Thunder and revamped looking Lakers standing in their way. Let alone the Heat (insert jokes here, go ahead), Boston and Chicago in the East. Boston looks extremely good coming in to this season, based solely off their current roster.

      I’m almost inclined to say that I’m more looking forward to the upcoming NBA season than I am for the upcoming NFL season. That’s a first. It’s gonna be really exciting, though! Can’t wait!

  2. alildusty - Jul 26, 2012 at 7:10 PM

    @mannyfresh209

    Your post looked good until you inserted Chicago in there. Bulls are going into hiding next season knowing that they can’t compete with Rose out half the year, hence the fire sale of bench mob.

    NFL season hinges on an agreement with refs. It’s go

    • berto55 - Jul 26, 2012 at 8:34 PM

      Yes…..calling anybody, would you like a Loul Deng, Carlos Boozer or Joakim Noah? How can we help you facilitate taking that contract today?

  3. twreck13 - Jul 26, 2012 at 7:16 PM

    Cuban really is becoming an incredible owner

  4. Kevin S. - Jul 26, 2012 at 8:27 PM

    Cuban’s right about it being much tougher to operate above the apron, but laughing at the Nets is a bit off base. Given the option of locking into Deron/Johnson/Wallace/Humphries/Lopez (with the possibility, however slight, of upgrading to Dwight) or starting from scratch, the Nets were certainly better off locking in.

  5. BigBeachBall - Jul 26, 2012 at 9:33 PM

    lots of math… brain shutting down… goodbye.

  6. crillbill - Jul 26, 2012 at 9:42 PM

    Cuban is a genius. He will have them at .500, under the cap and sold out till Nowotzki retires.

    Congrats on being fiscally responsible in Dallas.

    And being incredibly mediocre.

    Bravo!

  7. fanz928 - Jul 27, 2012 at 8:50 AM

    I think Howard has more interest in Atlanta than mavs

  8. ocgunslinger - Jul 29, 2012 at 12:23 PM

    Mark Cuban may be a lot of things but stupid is not among them. The Mav’s will be one of the strong teams over the next decade plus.

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