The Pelicans have until the final regular-season game to avoid paying the luxury tax. According to Spotrac, they risk incurring a $4.4 million fine if they don’t.
New Orleans Saints/Pelicans owner Gayle Benson speaks during her keynote address at a Baton Rouge Entrepreneurship Week (BREW) luncheon at the Hilton Capitol Center, Wednesday, May 3, 2023.
(Source: TRAVIS SPRADLING)
New Orleans Pelicans to be Paying Luxury Tax?
E.J. Liddell was promoted by the New Orleans Pelicans earlier this month. Liddell transitioned from a two-way contract to full-time. The three-year, $6.1 million contract Liddell signed increased the Pelicans’ salary to $168.2 million, or nearly $3 million above the luxury tax line for the NBA, and increased the team’s roster to 14 players.
In a published article by Bayou Bets, the Pelicans will enter the upcoming season in previously unheard-of territory as an over-the-tax team if they don’t make any other changes between now and October. The Pelicans are one of just two NBA teams to have never paid the luxury tax, the other being the Charlotte Hornets. More importantly, they will not be qualified to collect their fair part of the fund that is allocated to teams that do not pay taxes. According to salary cap specialist Eric Pincus, each of the 21 non-taxpaying teams received $17.3 million this summer.
Executive vice president David Griffin asserted in September that Gayle Benson, the owner, could be willing to pay a luxury tax under the appropriate conditions. Griffin remarked that they will truly go all in on anything when the moment is right.
The luxury tax was paid in each of the previous two seasons by five franchises. The Brooklyn Nets, Golden State Warriors, Los Angeles Lakers, and Los Angeles Clippers are four of them. They are large-market organizations situated in glitzy coastal cities. The Milwaukee Bucks, a small-market team from a flyover state, are the fifth team and are attempting to make the most of Giannis Antetokounmpo’s prime years. The luxury tax is typically only paid by clubs when their owners are particularly wealthy and when they think they have a good chance of winning the title or both.
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Pelicans are Riding High
The Pelicans are in an interesting situation because, despite having enticing moments late in the year, most notably when Zion Williamson led them to a seven-game winning streak in late November and early December, they have never had consistent success over the past four years. The squad dropped to ninth position in the Western Conference after Williamson suffered a hamstring injury in January. They were eliminated from the playoffs for the third time in four seasons after losing to the Oklahoma City Thunder in the play-in tournament in April.
The Times-Picayune reported that sources close to the Pelicans organization think Benson would be prepared to pay the luxury tax for a competitive team. They did, though, express doubt about Benson’s ability to pay the luxury tax the next year. They said that paying the luxury tax is unusual for a club that narrowly missed the playoffs, especially in a small market like New Orleans.
