The tumultuous tenure of Kyrie Irving in Brooklyn is over. The Nets are sending the All-Star point guard to the Dallas Mavericks for Dorian Finney-Smith, former Net Spencer Dinwiddie and multiple draft picks.
Irving joined the Nets in the summer of 2019, and his pairing with Kevin Durant was expected to elevate Joe Tsai’s team into title contention. Instead, Irving played only 143 games over four seasons, and the Nets won a single playoff series. He missed games for injuries, his refusal to get vaccinated against COVID-19, and a suspension this year for promoting an antisemitic movie.
Irving is in the final year of a four-year, $136.5 million contract that pays him $36.9 million this season and includes a 15% trade kicker. In December, Nike cut ties with Irving, ending a lucrative partnership for both sides with Irving earning more than $10 million annually from the Swoosh, and the Kyrie signature shoe serving as one of Nike’s bestsellers for basketball. Irving was seeking a contract extension from the Nets and requested a trade last week when the sides couldn’t come to an agreement.
The Mavericks hope Irving’s pairing with Luka Dončić can propel a deep playoff run similar to last year’s, when they made the Western Conference Finals—their first playoff series wins since taking the title in 2011. Mavs owner Mark Cuban, who’s worth more than $4 billion, is betting $29 million on it. That is the additional luxury tax the Mavericks will pay with Irving on the roster. Their tax bill will now be more than $60 million on top of their $174 million payroll.
The Nets paid a $98 million luxury tax penalty last season and were set to exceed that mark this year. Instead, the Irving trade cuts their tax bill to a tick over $80 million. The Nets are still expected to lose money this season.
The luxury tax was implemented to act as a de facto salary cap, but teams have treated it as a spending speed bump in recent years, and penalties for repeat payers have sent figures soaring. Last season’s $481 million in payments was nearly three times the previous high. This year’s projections smash that total, rising to $684 million, per Spotrac. The money is split evenly among non-tax paying teams.
The Warriors are on track to pay the highest luxury tax this season at $170 million. Warriors’ owner Joe Lacob told Sportico in December his club will not always be a huge taxpayer after it also paid $170 million last season. "The value of the brand building is worth the massive expense,” he said. "But you only do that if you have a chance to add a title.”
The Clippers ($145 million), Milwaukee Bucks ($70 million), Boston Celtics ($58 million) and Los Angeles Lakers ($45 million) are other teams set to pay big taxes for crossing the NBA’s $150.3 million luxury tax threshold on payrolls. In total, 10 teams are positioned to pay the tax for the 2022-23 season, although Thursday’s trade deadline could alter that.
As for Irving’s personal taxes? He’s catching a break moving his employment from New York City, where the rate is 13.5% on income over $1.1 million and 14.8% over $25 million, to tax-free Texas.
