New Rockets owner Tilman Fertitta says he’ll pay luxury tax to reach Finals, not otherwise

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Before selling the Rockets, Leslie Alexander set up the team to spend big. He signed off on a super-max extension for James Harden and a trade for Chris Paul, who’ll be an unrestricted free agent next summer.

Houston already has nearly $76 million committed in 2018-19 and more than $85 million in 2019-20 committed to just five players (Harden, Ryan Anderson, Eric Gordon, P.J. Tucker and Nene). That doesn’t even account for three starters headed toward free agency next summer (Paul, Trevor Ariza and Clint Capela, who’s eligible for an extension through Monday). Re-signing that trio would vault the Rockets well into the luxury tax.

New Rockets owner Tilman Fertitta, in a Q&A with Tim MacMahon of ESPN:

ESPN: On that note, this looks like a team that can be a legitimate contender for several years, but the price will rise significantly next summer if the core is kept together. What’s your tolerance level for paying the luxury tax?

Fertitta: This is what was told to me by my experts that work here: If it’s going to take you to the Finals, then you should pay the luxury tax. And I totally agree. If you have to lose money to get to the Finals or win a championship, I think you do what you have to do because it’s going to come back to you.

Remember, I don’t look at things year to year. I don’t operate any of my businesses year to year. I look at everything long-term, so if it costs me money to win a few championships, I’m fine with that. But you don’t want to be in the luxury tax and not be getting to the Finals, so if you don’t have a team that can get to the Finals, you shouldn’t be paying the luxury tax.

The luxury tax is applied to team salary on the final day of the regular season, and the last opportunity to significantly affect payroll is the trade deadline. Obviously, the Finals matchup isn’t determined until months later. So, Fertitta must project Houston’s fate when determining his willingness to spend.

The Rockets aren’t in line to pay the luxury tax this season, but how they fare will affect Fertitta’s perception this summer. Will Houston reach the Finals anytime soon? The Warriors exist.

Maybe the walls are closing in on the Rockets’ window even more quickly than anticipated.