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Analysis: Financial Strategy GSW


The focus for team general managers is often on balancing risk and profit, weighing the potential benefits against the potential drawbacks. This is evident in the case of the Golden State Warriors, where some fans criticize the team's transfers without considering the financial implications. Each additional million dollars in salary costs the team approximately ten times that amount in taxes due to their repeater tax status, resulting in significant penalties. To improve their salary situation, the Warriors could explore options involving players like Klay Thompson and Chris Paul.

Firstly, it's important to assess the team's current situation, including their ranking (#12) and the available players in the market. If there are no top 30 players available, acquiring role players may not significantly impact the team's performance.

Secondly, the GM needs to determine whether the team is close to being a contender or if they are lacking in multiple areas. If the team has significant deficiencies, addressing them may require substantial sacrifices.

Thirdly, if the team's moves only yield lateral improvements and don't make them a contender, it's a waste of time. Instead, it's better to consider the big picture and focus on long-term goals. Players like Kobe Bryant, Dirk Nowitzki, and Tim Duncan never requested transfers in their final years, and the same should apply to Stephen Curry. Acquiring players of their caliber would require sacrificing a great deal and would not align with the loyalty and legacy associated with those players.

It would be more prudent to view the current season as a period of development. In the summer, the team can free up salary space by parting ways with Klay Thompson and Chris Paul. While trading Andrew Wiggins at a low value may be challenging, it's better to wait for his value to increase to avoid further losses. The analogy of buying shares at $50 and selling when they drop to $10 doesn't apply here. Instead, the focus should be on selling high when they reach $100.

Some argue that the team can't afford to waste a year of Curry's remaining prime seasons. However, it's crucial to avoid repeating the same mistakes made in previous seasons. By positioning themselves financially and creating flexibility, the team can have the necessary tools to improve in the next three years without burdening Curry's final seasons with mediocrity.

The new salary rules make it advantageous to lower the team's tax burden, as they would then have the opportunity to use the mid-level exception in free agency to sign role players with contracts worth $13 million per year. Remaining at high salary levels would result in filling the team with players earning minimum wages, which could lead to mediocrity once the team's star players age.

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