Tag: Luxury Tax

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Lessons to be learned from the Golden State Warriors’ business and real estate strategy

This article was originally posted for Red94.net on June 18th, 2019.

With the NBA Finals now having passed, I found myself reflecting on the successes of the Golden State Warriors these past five years, and how the team became the greatest NBA dynasty of its time. As a Rockets fan, it sometimes pains me to discuss the Warriors, a team that has been responsible for Houston’s four out of its last five exits from the NBA playoffs. However, the Rockets can learn a great deal not only from the organization’s careful roster construction but also its business operations.

They say ownership is the greatest competitive advantage in sports, but owning one’s real estate is certainly a close second.

Much has been discussed how the Golden State Warriors successfully managed to build arguably the greatest roster of NBA talent ever assembled. First, the team drafted extremely well, choosing Stephen Curry in 2009, Klay Thompson in 2011 and Draymond Green in 2012, setting up its core championship foundation. Next, the team pivoted away from head coach Mark Jackson in 2014, hiring Steve Kerr as his replacement. In Kerr, the franchise developed a stronger identity and its now famous “assist-first” culture – the team went from being sixth in assists during 2013-2014 to leading the league in all seasons subsequently thereafter. Finally, as a result of a collective bargaining agreement between the league and players’ association, the salary cap jumped from $70 million in 2014-2015 to $94 million in 2015-2016, allowing the team to add arguably the greatest player of this era’s current NBA generation in Kevin Durant to an already 73-win championship team. These were perhaps the three most important developments on the basketball side that allowed the Warriors to dominate the league over the last five years. Credit to General Manager Bob Myers is well-deserved.

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On Tilman Fertitta’s acquisition of the Houston Rockets (Part 3)

This article was originally posted for Red94.net on September 15th, 2019.

In June, I concluded that despite the dire luxury tax implications, the Golden State Warriors would be able to retain their four All-Stars of Stephen Curry, Kevin Durant, Klay Thompson and Draymond Green. The solution to the financial conundrum would be found in the enhanced revenue streams generated from the team’s new arena, the Chase Center.

The Westbrook trade aside, the team was remarkably more conservative compared to last season. It also seems apparent that Fertitta wants Morey to conserve resources for a “silver bullet” trade that truly increases the team’s championship odds.

How much has changed since I wrote that article; the only constant in the modern NBA is that there is no constant. Durant ultimately teamed up with Kyrie Irving to lead a new Eastern Conference top-tier competitor in the Brooklyn Nets. Durant is one of the more self-aware superstar professional athletes, so it came as no surprise that in a recent sit-down with the Wall Street Journal, he validated what many basketball fans felt of the KD era in Golden State – he ultimately felt out of place amongst the original core three of Curry, Thompson and Green.

Regardless of Durant’s intentions to sign with Brooklyn, the move ultimately changed the landscape of the NBA for the 2019-2020 season and beyond. Subsequent cataclysmic shifts in the player landscape occurred, including Kawhi Leonard luring Paul George away from the Oklahoma City Thunder to help lead the Los Angeles Clippers, which subsequently opened the window for Rockets general manager Daryl Morey to trade Chris Paul for Russell Westbrook. Once the dust settled from the 2019 NBA offseason, the league could claim to have eight contenders for the Larry O’Brien Championship Trophy – the Rockets, Clippers, Lakers, Warriors, Nuggets, Bucks, 76ers and Jazz – when in the past it was simply the Warriors. The path to an NBA championship is wide open.