There’s been unprecedented offseason excitement surrounding the Timberwolves after they reached the Western Conference Finals, but their time as title contenders could be limited, writes Jon Krawczynski of the Athletic. While ticket sales and sponsorships have reached an all-time high, there are financial realities on the horizon that threaten the team’s future.
Minnesota already has an expensive roster with Karl-Anthony Towns, Rudy Gobert and Anthony Edwards playing on max contracts, and Jaden McDaniels, Naz Reid and Mike Conley all have lucrative deals as well. The Wolves are one of four teams operating above the second apron, which imposes significant financial penalties and severely restricts their ability to make roster moves.
Krawczynski points out that wealthier rivals like the Warriors and Clippers made roster decisions this summer to ease their financial burdens, even if those choices meant sacrificing talent. Both those teams have stable ownership situations, unlike the Wolves, who are the subject of a battle between Glen Taylor and the Marc Lore/Alex Rodriguez group that won’t be decided until after a November arbitration hearing.
Krawczynski also notes that Minnesota has rarely been a taxpaying team since Taylor took over as owner. He speculates that anything short of a championship season could result in a roster upheaval, speculating that rival teams already have their eyes on a potential breakup. Towns has long been involved in trade rumors, while Gobert is eligible for an extension with just one guaranteed year (plus a player option) left on his current deal, Reid holds a player option for the 2025/26 season, and Nickeil Alexander-Walker will be seeking a raise next offseason following the final year of his current contract.
There’s more from Minnesota, all from Krawczynski:
- The Wolves didn’t seek a veteran guard to back up Conley this summer because they have confidence in first-round picks Rob Dillingham and Terrence Shannon. They lost Kyle Anderson, Jordan McLaughlin and Monte Morris from last year’s roster, and Dillingham is the team’s only true point guard behind Conley. At Kentucky, Dillingham displayed a quick first step to get past defenders, and Krawczynski states that general manager Tim Connelly believes the young guard can create opportunities for his teammates.
- Minnesota hopes Joe Ingles will replace the play-making from the wing it lost when Anderson left, Krawczynski adds. Ingles, who signed as a free agent, also provides much better shooting, although he’ll turn 37 in October.
- Krawczynski notes that Gobert responded to offseason criticism last year by becoming a better fit in the Wolves’ offense and winning Defensive Player of the Year honors for the fourth time. The French big man may feel like he has something to prove again after his embarrassing lack of playing time during the Summer Olympics.
The old, family-based ownership (Grousbecks Ii n Boston, Taylor in Minnesota) trying to raise the valuation of their franchises as they cash out for billions.
The owners believe that it’s worth going way over the cap for a couple of years, even if it means losing $400M-$500M, because winning and player contracts will increase the sale price by more than that.
A small-market team like Minnesota doesn’t have the revenue base to do this for more than 1 year, 2 max. Minnesota is estimated to have lost between $75-$125M last year, and it will be at least double that this year. If the sale completes by January, it’s possible, if not likely, that the Wolves immediately make moves to get under the cap to save ~$200M in penalties.
If the sale goes through I’d say its almost guaranteed that pay roll is immediately slashed. Bye bye Kat and bye bye Rudy. Go forward with Naz at the 5 and try to get a point guard to take over for Conley.
Boner , and people call *me* negative! lol
Yeah, but, unless the sale happens before the trade deadline this year, the new ownership group will not be able to avoid the ~$200M cap hit this season.
Naz is a free agent at the end of this season, so he’s worth, at least, double his current $13M salary, and probably significantly more on the open market.
After this season, 2 of Rudy, Kat, and Naz will be gone. There’s only enough cap space for 1 of them.
Top 4 tax teams
Suns
Wolves
Celtics
Bucks
Wolves spend more money than Celtics this season
Sillivan , check out: link to statista.com
Rule of thumb: player contracts should be max 50% of your revenues, other OpEx takes the rest.
Suns, Wolves, and Bucks all spending more than total revenues.
Celtics reportedly also losing money. Player contracts + other expenses < revenues.
These are just the current issues based on the old TV revenue…
Teams have one more season to get through before the league gets a massive financial boost…
If you can contend now you do… Warriors aren’t contending, which is why they cut costs… And the Clippers have also realised they are old…
The new CBA means you have to create a window of 2-4 years where you believe you can contend… Then drop out the tax for a season or 2 to retool and then go back in…
Scarlett,
You’re absolutely right to say that the new CBA forces teams to identify the window of 2-4 years when they’ll contend and be willing to go over the cap. And, even a team is much wealthier than others, they have to “reset”, going under the first apron for 1 year, to avoid the “highly punitive” repeater tax. As you say, that’s what the Warriors are doing this year, as are the Clippers. Those teams plan to get back to spending over the cap next year.
It’s a common misconception that new TV and streaming deals changes the issues of player retention, though. Basically, the increase to teams’ revenues is in the 10’s of millions per year, whereas the repeater tax penalties are in the 100’s of millions per year.
Back-of-the-envelop accounting (you’ll find similar other places): The new deal, at ~$6.5B/yr for 11 years, starting lower and ending higher than that average, should roughly double the current TV revenues. That’s an increase relative to current revenues of almost double. So, let’s say it’s $3B extra revenue. The league itself and the taxman both take a significant portion of that, leaving the remainder to the 30 teams, leaving, let’s say, $50M/yr extra per team. Roughly 1/2 of that goes to the players, which is $25M/yr/team. Keep in mind that this ~$25M is an average over the next 11 years, it’ll start at about $14M/yr and increase to $31M/yr over 11 years.
These number are mouse nuts when compared to this: the “haves”, like the Warriors, have ~$800M in annual revenues, whereas the “have-nots”, like the Timberwolves and Pelicans have ~$250M. The only way to address that inequity is to make it prohibitively expensive for ANY team to stay over the cap for more than 2-3 years.