The potential pitfall of the Warriors' burgeoning dynasty

Bobby Marks
The Vertical

The Vertical Front-Office Insider Bobby Marks, a former 20-year executive with the Nets, examines the financial cost of keeping the Golden State Warriors together.

Contrary to popular belief, the Golden State Warriors didn’t have a big payroll this season.

The Warriors ranked 15th in total salary and did not reach the $100 million mark.

But the reality is the Warriors will be a luxury-tax team for the foreseeable future.

Because of future cap restrictions, Golden State will need to put a heavy emphasis on player development and get inexpensive production from former and future first-round picks to complement its care of stars. Getting more under-the-radar talent – such as second-round pick Patrick McCaw – would also go a long way to maximize the Warriors’ dollars.

The salary situations discussed here are based on projections and take into account that Steph Curry, Kevin Durant, Klay Thompson and Draymond Green will most likely sign max contracts.

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Thompson and Green could be eligible to sign for Designated Player Veteran Extensions if they meet the criteria.

However, if Golden State signs Curry this summer for 35 percent of the cap, Golden State would have to choose between Thompson or Green for the DPVE.

Teams are only eligible to have two players signed to a “super max contract.”

Both players could still sign max contracts, but only for 30 percent of the salary cap.

Although Golden State doesn’t need to trade any of its four All-Stars, ownership will need to weigh the value of roster flexibility and tax consequences against winning NBA championships.

In other words, if ownership is willing to pay, the Warriors core four can stay together.

The projected price to keep the burgeoning dynasty together? A mere $1.4 billion over next four years.

Keeping the Warriors together will be very, very expensive. (AP)

Here are the details of what it will take to keep the NBA champions together for the foreseeable future.

2017-18

Under contract                          2017
Klay Thompson                    $17,826,150
Draymond Green                  $16,400,000
Kevon Looney                        $1,471,382
Patrick McCaw                       $1,312,611
Damian Jones                         $1,312,611

With Kevin Durant expected to opt out of his contract, the Warriors will have two starters and three former draft picks under contract.

FA to be signed                           2017                        How
Stephen Curry                        $35,300,000                   Bird
Kevin Durant                          $31,848,000                Non-Bird
Andre Iguodala                      $15,000,000                    Bird
Shaun Livingston                   $10,000,000                    Bird
Ian Clark                                  $7,700,000                Early Bird
Zaza Pachulia                         $3,477,600                 Non-Bird
JaVale McGee                         $3,400,000         Partial tax mid-level
David West                             $2,794,382                  Non-Bird
Free agent                               $1,471,382          Minimum exception
Free agent                               $1,471,382          Minimum exception

Curry’s contract could be valued at $205 million over five years, and how Durant structures his contract will have an impact on how the Warriors build their bench.

If Durant signs a one-year deal using non-Bird rights (player option for 2018-19) as projected below, Golden State will be able to retain Andre Iguodala and Shaun Livingston.

Iguodala ranks fourth among free-agent small forwards and should get a salary that averages $15 million per year for three years.

Livingston, ranked ninth among free-agent points guards, should get a salary slightly above the $8.4 full mid-level exception. The projection for Livingston is three years, $30 million.

The contracts of Iguodala and Livingston are conservative projections and could be higher if they sign with another team.

If either player leaves, Golden State will not have the cap flexibility to replace players of their caliber.
Filling the bench will be a challenge because of cap restrictions, but the Warriors can bring back the core elements of theor bench with the following deals:

• Ian Clark: four years, $35 million
• David West: one year, $2.8 million
• Zaza Pachulia: one year, $3.5 million
• JaVale McGee: one year $3.4 million
• Two free agents signed to the minimum

Salary table                                           2017
Guaranteed salaries                       $150,785,500
Dead money                       $945,126 (Jason Thompson)
Salaries: cap                                   $151,730,626
Salaries: tax                                    $151,730,626
Salary cap                                       $101,000,000
Luxury tax                                       $121,000,000
Cap space                             None ($50,730,626 over)
Tax room                                None ($30,730,626 over)

Golden State projects to spend close to $240 million in 2017-18: $151.7 million in salary and $88.7 million in luxury tax.

The luxury tax will decrease if Livingston or Iguodala does not return.

Kevin Durant has options when it comes to how he’ll remain with the Warriors. (AP)

2018-19

Under contract                                      2018
Stephen Curry                                  $38,124,000
Klay Thompson                                $18,988,725
Draymond Green                              $17,469,565
Andre Iguodala                                 $15,000,000
Shaun Livingston                             $10,000,000
Ian Clark                                            $8,316,000
Kevon Looney                                    $2,227,081
Damian Jones                                    $1,544,951

Because of the financial commitments from the summer of 2017, Golden State will be over the salary cap when free agency begins in 2018.

Thompson could be eligible for the Designated Player Veteran Extension if he earns All-NBA honors.

FA to be signed                                      2018                               How
Kevin Durant                                      $35,700,000                     Early Bird
Patrick McCaw                                   $6,000,000                      Early Bird
Free agent                                          $4,000,000               Partial tax mid-level
Free agent                                          $1,486,096               Minimum exception
Free agent                                          $1,486,096               Minimum exception
Free agent                                          $1,486,096               Minimum exception
No. 30 draft pick                                 $1,592,160                     Rookie scale

After again opting out, Durant could sign for four years and $160 million with early Bird rights that would reflect a max salary.

McCaw, a restricted free agent, projects to sign for three years and $19.3 million.

Because of the team’s lack of flexibility, the development of McCaw is vital to the Warriors’ bench. It also will be crucial for Golden State to identify a player who can eventually contribute with its first-round pick.

Salary table                                             2018
Guaranteed salaries                         $163,420,770
Dead money                         $945,126 (Jason Thompson)
Salaries: cap                                     $164,365,896
Salaries: tax                                      $164,365,896
Salary cap                                         $102,000,000
Luxury tax                                         $124,000,000
Cap space                               None ($62,365,896 over)
Tax room                                 None ($40,365,896 over)

Golden State could be the first $300 million team in NBA history with $164 million in salary and $137.1 million in luxury tax.

2019-20

Under contract                               2019
Stephen Curry                           $40,948,000
Kevin Durant                             $38,556,000
Draymond Green                       $18,539,130
Andre Iguodala                         $15,000,000
Shaun Livingston                      $10,000,000
Ian Clark                                     $8,932,000
Patrick McCaw                           $6,480,000
Damian Jones                             $2,305,057
2017 First rounder                      $1,864,560

Iguodala and Livingston will be entering the final season of their deals, and when free agency begins Golden State will be in the luxury tax.

Green is extension eligible and could sign for the Designated Player Veteran Extension if he were to meet the criteria from the previous season.

FA to be signed                              2019                               Insider info
Klay Thompson                         $32,130,000                                Bird
Free agent                                  $4,000,000                   Partial tax mid-level
Free agent                                   $1,560,401                    Minimum exception
Free agent                                   $1,560,401                    Minimum exception
Free agent                                   $1,560,401                    Minimum exception
No. 30 pick                                  $1,864,560                         Rookie scale

After signing Curry and Durant in consecutive summers, it’s now Thompson’s turn to the tune of five years and $186 million. The deal reflects 30 percent of the salary cap as a Tier 2 max contract.

Golden State will be in the luxury tax even if Thompson were to give the team a discount, but he could also be eligible to sign a DPVE with a starting salary of $37.5 million.

Salary table                                    2019
Guaranteed salaries                $183,740,109
Salary cap                                $107,100,000
Luxury tax                                $130,200,000
Cap space                       None ($76,640,109 over)
Tax room                         None ($53,540,109 over)

The consequences for Golden State being in the luxury tax for three of the past four years has a significant impact in 2019-20.

The Warriors will be a repeater tax team and face harsh financial penalties.

On top of $184 million in salary, the Warriors will have an additional $219 million in luxury tax payments.

The total financial commitment could top $400 million.

2020-21

Under contract                                 2020
Stephen Curry                             $43,772,000
Kevin Durant                               $41,412,000
Klay Thompson                           $34,700,000
Ian Clark                                       $9,548,000
Patrick McCaw                             $6,960,000
2018 First-rounder                        $1,953,480
2019 First-rounder                        $1,957,800

Player development will be critical for the Warriors.

With the losses of Iguodala and Livingston, Golden State will now rely on McCaw and its 2018 and 2019 first-round picks for bench production.

FA to be signed                                 2020                                      How
Draymond Green                         $33,736,500                                  Bird
Free agent                                    $4,000,000                       Partial tax mid-level
Free agent                                     $1,638,421                       Minimum exception
Free agent                                     $1,638,421                       Minimum exception
Free agent                                     $1,638,421                       Minimum exception
Free agent                                   $1,638,421                       Minimum exception
Free agent                                     $1,638,421                       Minimum exception
No. 30 pick                                    $1,957,800                            Rookie scale

Green would get a five-year, $195 million contract, with the Warriors once again adding a first-round pick to develop.

The remaining roster is comprised of minimum-exception players and one signed to part of the tax mid-level.

Salary table                                       2020
Guaranteed salaries                    $188,189,685
Salary cap                                   $112,455,000
Luxury tax                                   $136,710,000
Cap space                          None ($75,734,685 over)
Tax room                             None ($51,479,685 over)

As a repeater tax team again, the Warriors project to have $188 million in salary and $256 million in luxury tax.

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