The Golden State Warriors made what was initially viewed as a head-scratching move in the final moments of the NBA trade deadline on Thursday when they shipped out D'Angelo Russell to the Minnesota Timberwolves in exchange for Andrew Wiggins, draft assets, and a future trade exception.
However, a truly important (and under-reported) aspect of the deal was not the players involved, but the money it will end up saving the Dubs. Swinging this trade helped them avoid stiff financial penalties in the form of the "repeater tax" penalty under the NBA collective bargaining agreement's luxury tax rules.
NBA Repeater Tax Explained
So, what is the repeater tax, exactly? Well, it's a penalty meant to discourage teams from spending extra-large sums of money year after year. If a team pays the luxury tax three times in any four-season stretch, they are deemed "repeaters," which requires them to pay an extra dollar in luxury tax on top of any tax bill the following season.
It helps disincentive teams from simply throwing money at their problems, even if they think they can afford it.
The Warriors, if they stay the current course, likely don't need to worry about that now. After being right up against the NBA's "hard cap" -- the salary treshold above which you absolutely cannot go over by any means, even using normal salary cap exceptions -- they're suddenly in the clear after getting off of Russell, Omari Spellman, and Jacob Evans' contracts. Especially considering that they've added a $17.2 million trade exception courtesy of the Wolves as well, the additional flexibility they've afforded themselves heading into the next couple of years could constitute a big win.
Golden State was on the precipice of luxury tax hell heading into the trade deadline. Keeping Russell would have crippled them in the free agent market in the summer, and handed them a massive luxury tax bill besides.
Fortunately, they managed to dodge a serious financial bullet. Now they'll be able to reload much more freely once Steph Curry and Klay Thompson are ready to roll once again.
Keep this all in mind the next time you buddy tells you the Dubs were nuts for giving up D-Lo for Wiggins.