The dollar amounts seem quaint now, but in 2001, the NBA was searching for ways to curb teams’ spending around the league.
The league was three years removed from a lockout and payrolls were starting to soar. The 2001 Portland Trail Blazers, for instance, poured out $87 million just to compete with the Los Angeles Lakers in the Western Conference.
They had Scottie Pippen, Rasheed Wallace, Shawn Kemp, Arvydas Sabonis and Damon Stoudamire all making at least $10 million. The star power didn’t help much. They won 50 games that year and still got swept by the Lakers in the first round.
The price tag on the Blazers roster made the Lakers’ $57 million payroll look frugal. But the Lakers, in the midst of a run of three straight championships, were perpetually among the Top 10 teams in spending.
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As a deterrent, the league’s first luxury tax was born.
The penalty was one dollar for every dollar the team went over the $55 million salary cap. Initially, it changed the way front offices and players made decisions.
“It’s important that teams manage spending habits and know how the luxury tax is going to be for years to come,” Grizzlies general manager Billy Knight told the Memphis Commercial Appeal at the time. “You have to prioritize your roster — future signings you might have or protecting your free agents that are coming up. It makes everything more difficult and complicated.”
In the long run though, the tax didn’t stop teams from the urge to spend.
In the 23 years since the tax was first introduced, 221 teams have gone over it — that’s about 10 each season. Generally, it’s worth it. Teams that spend more than the luxury tax threshold averaged 44 wins over that span while teams that didn’t averaged 38. Of the 221 teams that went over the tax threshold, 12 won titles. Of the 436 that didn’t, 10 still pulled off championship runs.
About a decade later, the league threw down some more rumble strips. They added what they called a luxury tax apron to discourage spending even further. Exceeding it came with more penalties that restricted how front offices could construct teams. Difficult decisions had to be made — some, like the Thunder breaking up a Finals team by sending James Harden to the Rockets, changed the league — but still, some teams deemed going past the spending limit was worth it.
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Since 2011, 72 teams have gone over the luxury tax apron. Many of them didn’t see the same rewards, though. The teams that went over the first apron averaged 42.5 wins, compared to 39 for the teams that didn’t. Four of those 72 teams won titles. Seven of the teams that didn’t pay still won.
The Celtics finally hung banner 18 by putting together the best roster in basketball. With a $187 million price tag, that roster was also one of the league’s most expensive. They were over the $136 salary cap, the $165 million luxury tax and the $172 million apron by miles and tested the waters of the league’s latest threshold for overspending. The league introduced a second apron last year when they reached a new collective bargaining agreement with players. The Celtics were one of four teams to exceed it (along with Golden State, Phoenix and Milwaukee).
Still basking in the afterglow of parades and first pitches, it was hard for Celtics executive Brad Stevens not to say it was worth it.
The penalties the Celtics will face will be restrictive.
Teams that go over the second apron won’t have a taxpayer mid-level exception, commonly used to add veterans at a reasonable cost. They can’t participate in the buyout market during the season. They can’t aggregate salaries in trades. They can’t give cash away in trades. They can’t sign and trade their own players for others. They can’t reach into the future to trade picks seven years away. And if they go over the second apron twice, their first-round pick automatically falls to the end of the draft.
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Knowing how the rules around team-building were going to change, Stevens said last summer was crucial.
“It’s one of the reasons why last year was the time to trade,” Stevens said. “That was the time we could aggregate and that’s a big part of this right now that you’re over the second apron, you can’t aggregate in trades. Both of our major trades last summer, that was a part of it. So this kicking in, it’ll be interesting to see how it affects the league. Are there a lot less trades? That will be interesting to follow, and look back at, and study over the next few years.”
The Celtics spent money to build the best roster in basketball, singing Jaylen Brown to a $296 million super max contract last summer, trading for Kristaps Porzingis and Jrue Holiday and singing them to extensions of $60 million and $135 million, respectively. Rewarding Jayson Tatum this summer with a supermax contract of an estimated $315 million is a foregone conclusion.
With that, the Celtics, who have been one of the league’s five highest-spending teams in each of the past three seasons, will continue to have one of the most expensive rosters in the league.
But winning is expensive.
Julian Benbow can be reached at julian.benbow@globe.com.