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Home»Basketball
Basketball

The huge amount of money Luka Doncic loses in taxes by trading Mavericks for Lakers

News RoomBy News RoomFebruary 5, 2025No Comments3 Mins Read
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In an early morning that shook the NBA, the shocking three-team trade not only redefined the sports landscape, but also left serious financial ramifications for Luka Doncic. The star, who was on the verge of signing a five-year super-max contract for $345 million with the Dallas Mavericks, will no longer be able to access that option after being traded to the Lakers.

In this high-voltage transfer, which involved three franchises, the Lakers received Luka Doncic, Maxi Kleber and Markieff Morris. For their part, the Mavericks acquired Anthony Davis, Max Christie and the Lakers’ first-round pick for 2029, while the Jazz obtained Jalen Hood-Schifino along with second-round picks from the Clippers and Mavericks for 2025.

The details of the exchange

The operation limits the Los Angeles Lakers to offering Doncic a five-year maximum contract for $229 million, that is, $116 million less than he could have obtained in Dallas. In addition, the change of scenery implies a drastic fiscal shift: from state tax exemption in Texas to facing the highest tax rate in the United States in California, where incomes above $1 million a year are subject to a 14.4% state tax.

The super-max, which allows teams to pay up to 35% of the salary cap, is reserved for players with seven to nine years of service who have achieved distinctions such as inclusion on an All-NBA team, an honor Doncic earned last year. However, the rule also requires the player to remain with the team that originally acquired him or to have been acquired before his fifth year in the league. With seven seasons in the NBA, Doncic lost this valuable status when he changed jerseys.

Given this scenario, some experts suggest that it might be in Doncic’s best interest to sign a three-year extension with a player option for the 2028-29 season. In this way, upon reaching 10 years of service, he would again be eligible for contracts representing up to 35% of the salary cap, recovering some of the economic potential he has lost.

Reaction from Dallas

Mavericks general manager Nico Harrison commented on the decision:

“We really feel that we got ahead of what was going to be a tumultuous summer, with his eligibility for the super-max and, in addition, a year away from being able to opt out of any contract. We know that other teams were already accumulating interest in trying to sign him once that option became available.”

The transfer of Luka Doncic not only redefines the sporting future of one of the most outstanding players in the NBA, but also highlights how contractual and tax implications can significantly affect the net worth of a star. With a reduced contract and a considerably higher tax burden in California, the Slovenian star will have to adapt to a new economic environment while continuing to prove his worth on the court.

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