Heat s CEO s team history elaborates on the team s luxury tax concept for the first time

At the season summary press conference held on May 9 local time, Heat president Riley clearly mentioned that "the team needs to reduce the burden of luxury tax to avoid the impact of duplicate luxury tax."

This made many Heat fans feel dissatisfied again, thinking that "it has started to search again." But in fact, the total amount of luxury tax paid by the Heat in history has exceeded US$50 million, ranking 10th in the league.

In fact, Eric Wolworth, president of Heat's commercial operations (in the Heat's physical structure as a professional sports club, Wolworth is the head of the commercial operations department, and is at the same level as Andy Ellisberg, head of the basketball operations department and general manager of Heat. For details, please click on the blue link to view the relevant content: Current list of major members of the Heat's management and operation team + interpretation instructions) At the beginning of this season, when he was a guest on a podcast program, he published the most detailed interpretation of the team's concept and strategy for paying luxury taxes.

When he spoke, the Heat ranked seventh in the league in total salary this season, with the team facing a luxury tax bill of $26.9 million. And this is obviously not the ideal operational state for management.

Woolworth said bluntly:

"Any NBA practitioner who claims to be willing to pay luxury taxes is lying, no one wants to pay this money. The current system is becoming more and more stringent.

There are several operating philosophy in the league: some teams never pay taxes, and I respect this choice - although this mentality is difficult to compete for the championship, it is understandable considering the market size or business philosophy; some teams have overtaxed taxes all year round but have outstanding results; and we are opportunists. When we see that the puzzle of winning is only one piece, we will take decisive action.

This 'strategic assault' thinking has allowed us to win three championships and seven finals. As long as we can increase our winning goal, we He will act. If he can avoid taxes and maintain competitiveness, it is naturally more ideal."

Woolworth emphasized:

"Luxury tax is like a business poison. As a professional manager, I hate it - paying tax means it is difficult to make a profit."

He specifically pointed out that all non-tax-paying teams can divide the luxury tax pool: "Tax-paying teams have to bleeding and not be able to pay dividends. "

Data shows that the Heat paid luxury tax in the 2019-2020 season, successfully avoided taxes in the 2020-2022 season, and paid $15.2 million in the 2022-2023 season, and was exempted from tax payments again last season.

This season, the Heat finally paid taxes again ($4285,481), but the team's philosophy is to try hard to avoid triggering "repeated luxury taxes" in recent seasons. This clause is for teams that exceed taxes three times in four years or four times in five years.

"Repeated tax makes the punishment worse, either restarting the cycle or completely collapsed," Woolworth warned.

If the current salary structure is maintained, the Heat will exceed taxes for the third time in four years, and the 2026-27 season may trigger duplicate taxes. Management will inevitably be more cautious about maintaining salary levels, which will also affect the stay and departure decisions of Dunro (19.9 million next quarter) and Rozier (26.4 million in 2025-26).

In his speech, Woolworth praised the responsibility of owner Mickey Allison and CEO Nick Allison: "They are commendable for their willingness to pay taxes for the championship. The season plan may be completely subverted in the Christmas season, and we must remain flexible and adaptable - this is a model. We have established a healthy operating model and won the respect of the league with innovative spirit and fan-first concept. "

This season, the Heat salary did not exceed the threshold of the second luxury tax line, and the management is unwilling to cross the red line for multiple considerations:

-Triggering the second luxury tax will prohibit teams from trading. Receive excess contracts, package transactions or use cash, and the special cases of existing transactions will also be invalid;

-If the second luxury tax line at the end of the regular season, the team's first round pick in the next seventh year will be frozen, and it will be kept offline for at least three years in the next four years before the transaction can be unfreezed. If the second luxury tax line is twice in the four years after the freezing period, the signing position will automatically be reduced to the 30th pick. "Many new bosses are confident that they can transform the league when they enter the industry," Woolworth concluded, "but the cruel reality teaches them: there is no shortcut to profit, especially in the pursuit of victory."