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Is the New Orleans Pelicans’ stance on the luxury tax preventing them from competing?
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Is the New Orleans Pelicans’ stance on the luxury tax preventing them from competing?

The New Orleans Pelicans are one of five NBA teams that have never reached an NBA Finals. Since their revival as a New Orleans basketball franchise in 2002, the Pelicans have never made it past the second round of the playoffs.

In addition, New Orleans has not paid a luxury tax in any year since the NBA’s collective bargaining agreement went into effect in 2017. Is that holding them back?

According to Sportico, 13 of the last 17 NBA champions paid luxury tax in the year they won the championship.

This year’s champions, the Boston Celtics, paid an estimated $41.4 million in luxury taxes, a figure that is expected to rise even higher this year after Jayson Tatum, Jaylen Brown and Jrue Holiday were granted contract extensions over the summer.

Fittingly, the Celtics are back in the thick of the championship fight after making the playoffs for the past ten years in a row.

The Pelicans seem to be avoiding paying the tax at all costs. Last season, they traded guard Kira Lewis, Jr. before the trade deadline to avoid the penalty for exceeding the luxury tax limit of $165.3 million.

Lewis Jr. was once a first-round pick in New Orleans, but injuries derailed his career. The Pelicans also included a second-round pick in the trade.

The NBA offers incentives to teams that do not exceed the tax limit.

If a team does not exceed the tax even once during the entire term of the CBA contract through the first year of a new contract, those teams will receive a refund of $46.5 million. About 12 teams have received the full refund amount since 2017 for not exceeding the tax.

None of these teams have won a championship or even reached the NBA Finals.

New Orleans is currently expected to pay a $2.5 million luxury tax. The Pelicans could make a move like they did last season to get under the tax line and avoid a penalty.

There are currently uncertainties regarding the roster. There is no clear perspective for the center position and the contract extensions of Brandon Ingram and Trey Murphy III are uncertain.

Murphy III’s contract extension is expected to be finalized before the start of the season. Both sides are well aware of the value of this agreement.

Ingram’s contract extension has been the talk of the summer for the Pelicans. Ingram reportedly wants between $45 million and $50 million annually, and New Orleans isn’t willing to accept his demands. For now, Ingram will remain on the roster, but he could be moved during the season to collect compensation before he’s an unrestricted free agent next summer.

The Pelicans were able to increase their winning percentage in the first three years under Willie Green in New Orleans. During these years they also had to fight in the play-in tournament for their place in the playoffs.

At what point will New Orleans be willing to “pay” for a chance at the title by recruiting more top talent?

Right now, the Pelicans seem to be toying with the idea of ​​staying under the tax to see what a healthy roster would look like. Although Zion Williamson had the healthiest season of his career, he has yet to play a playoff game.

Simply relying on perfect health may not be the answer for New Orleans. As the old saying goes, sometimes you have to pay to play.

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