The Houston Rockets will have a payroll of $143 million this season and will pay in excess of $25 million in luxury taxes. If the Rockets were a repeater team, that would instead cost them $88.8 million.
Tilman Fertitta admitted the tax will impact decision-making. Fertitta bought the Rockets a little over a year ago and is believed to have used his most of his wealth on the acquisition.
"I know we're in it a lot this year," Fertitta said of the tax penalties. "It's a horrible hindrance. It's just brutal. You can take $5 million and look up and it cost you $20 million. At some point, you have to be smart and you can't get in the repeater tax, which happens when you are in the luxury tax three years (of four).
"At some point, you have to do some things so you're never in the repeater tax. It's something you have to be cognizant of. At the same time a team is built on superstars. If you have the top four or five players, you can always see other players move in and out. It is a chess game playing with the luxury tax. This year, in order to get back to the Western Conference Finals, we're going to have to be in it many millions of dollars."
Fertitta said he will pay the luxury tax for a title contender but not a fringe playoff team.
"I am here to win championships," Fertitta said. "I'm not going to let five or 10 or 15 or 20 million dollars make the difference. If you do win the championship, that's easy money back. Now, if we are in the luxury tax every year and barely getting in the playoffs and a first-round game is a struggle, I'm going to find me a new general manager."