It would cost him to join them.
For starters, the Rockets are willing to pay Harden—who is owed $133 million over the remaining three years of his contract—a massive amount of money to stay. According to ESPN’s Adrian Wojnarowski, the team recently offered the former MVP a two-year, $103 million extension. The extension would make Harden the NBA’s first player to earn more than $50 million a season. It would also cover the 2023-24 and 2024-25 seasons, during which Harden would play as a 34-year-old and 35-year-old, respectively. While the eight-time All Star and league’s leading scorer over the last three seasons shows no signs of slowing down, the Rockets’ willingness to pay him more than $50 million a season while he’s in his mid-30s is a remarkable expression of support.
Then there are taxes. The Rockets play in Texas, one of nine states without an income tax on wages. If Harden is traded to the Nets, his pay would become subject to an approximately 12.7% tax rate between New York State and New York City. This change would have a sizable impact on his after-tax pay.
While Harden is owed $133 million over the next three years regardless of his NBA team, he’d take home $13.6 million more by remaining with the Rockets than by joining the Nets. Here are the dollar figures (which include jock taxes and assume that Harden, as a Net, would reside in New York City):
There are, of course, other financial factors. Not only would Harden take home less than $13.6 million by playing for the Nets, he’d also experience a higher cost of living in New York. Utilities, groceries, parking, health care, gasoline and other day-to-day expenses would be pricier. According to Nerd Wallet, the cost of living in Brooklyn is 92% higher than in Houston; Manhattan, meanwhile, is a whopping 165% higher. Put bluntly, Harden’s dollar would be “worth less” in New York than in Houston.
On the other hand, Harden might recoup what he’d lose through superior endorsement opportunities. Per Nielsen metrics, New York is the country’s largest media market. Houston ranks eighth. Harden already enjoys lucrative endorsement deals with Adidas, Electronic Arts, BodyArmor and other major brands. His value to companies would presumably climb by playing in a larger market. Plus, the Nets, with a “big three” of Harden, Durant and Irving—or “big four” if Spencer Dinwiddie, who averaged 21 points and 7 assists per game last season, remains on the roster after a Harden trade—would be well positioned to compete in the Eastern Conference.
It’s also fair to question how much Harden cares about tax, cost of living and endorsement consequences. Between NBA salaries and endorsements, he has already earned well over $225 million. Harden has also won numerous individual awards and recognitions. He is a sure-fire Hall of Famer. But at 31, Harden’s missing an NBA championship. His Rockets are also in a transition stage, with new leadership following Daryl Morey’s departure and the hiring of coach Stephen Silas. If Harden believes his path to a title runs through Brooklyn, extra millions might not matter.