While it certainly helps to have deep pockets, as we have seen from the New York Knicks, spending money is no guarantee of success in the NBA.
Fans of teams in small markets can thank the salary cap for the parity that the league offers. Without these restrictions, teams with the most money would be able to offer the top players contracts so large that it would be challenging to maintain any semblance of competitive balance.
The salary cap is only a soft restriction and teams like New York (worth an estimated $4.6 billion, per Forbes) can still exceed it if they are willing to pay the luxury tax.
Since the luxury tax was instituted in 2002, Knicks governor James Dolan has been hit with the penalty 11 times. But the franchise has very little to show for it as they have missed the playoffs during eight of those seasons.
According to our research, teams have paid the luxury tax 167 times. But in 47 instances, they did not make the postseason. That means luxury tax teams have missed the playoffs 28.0 percent of the time. Overall, among the 21 worst teams record-wise to pay the luxury tax, New York appears five times.
Below are the other most notable seasons in which a team paid the luxury tax but still fell massively short of preseason expectations.
1
Miami Heat, 2007-08
(Photo by Al Bello/Getty Images)
Payroll: $74,767,603 ($91,917,507 adjusted to inflation)
Payroll rank: No. 5
Record: 15-67 (.183)
Net Rating: -9.4
This was mostly a transitional season for the Miami Heat as they traded Shaquille O’Neal midway through the year and, at the conclusion of the season, big man Alonzo Mourning retired and head coach Pat Riley resigned.
2
New York Knicks, 2014-15
Brad Penner-USA TODAY Sports
Payroll: $81,369,219 ($87,446,049 adjusted to inflation)
Record: 17-65 (.207)
Net Rating: -10.1
This was the worst season in franchise history for the Knicks, finishing with a 60-loss campaign for the first time since their inception in 1946-47. The front office released six-time NBA All-Star Amare Stoudemire and traded Iman Shumpert and JR Smith.
3
Los Angeles Lakers, 2014-15
(Photo by Scott Halleran/Getty Images)
Payroll: $77,546,500 ($83,337,839 adjusted to inflation)
Record: 21-61 (.256)
Net Rating: -7.1
This was an incredibly rough season for the Lakers, who struggled to stay healthy. Their lottery pick rookie Julius Randle suffered a season-ending injury during the first game of his NBA career, Kobe Bryant tore his rotator cuff and the Lakers lost 60 games for the first time in franchise history.
4
Minnesota Timberwolves, 2007-08
(Photo by Jonathan Daniel/Getty Images)
Payroll: $69,043,895 ($84,880,916 adjusted to inflation)
Record: 22-60 (.268)
Net Rating: -7.3
After trading franchise cornerstone Kevin Garnett to the Boston Celtics during the offseason, the Timberwolves did not put together a very competitive roster in their first season without their longtime big man.
5
New York Knicks, 2007-08
(Photo by Chris McGrath/Getty Images)
Payroll: $96,190,114 ($118,253,832 adjusted to inflation)
Record: 23-59 (.281)
Net Rating: -6.8
The Knicks owed large paychecks to Stephon Marbury and Zach Randolph but failed to make much noise. Following the season, Isiah Thomas was fired as head coach and general manager.
6
New York Knicks, 2005-06
(Photo by Ezra Shaw/Getty Images)
Payroll: $126,631,098 ($166,764,356 adjusted to inflation)
Record: 23-59 (.281)
Net Rating: -6.6
Despite coming into the season way above the luxury tax because of money owed to Allan Houston and Penny Hardaway, among others, the Knicks had the second-worst record in the NBA. After just one season with the organization, head coach Larry Brown was fired at the conclusion of the campaign.
7
Chicago Bulls, 2003-04
(Photo by Brian Bahr/Getty Images)
Payroll: $55,489,797 ($77,372,466 adjusted to inflation)
Record: 23-59 (.281)
Net Rating: -6.5
During the offseason, guard Jay Williams was injured in a motorcycle accident and would miss the entire season. This was the final professional season for six-time NBA champion Scottie Pippen, who averaged just 5.9 points per game.
8
Toronto Raptors, 2002-03
(Photo by Lisa Blumenfeld/Getty Images)
Payroll: $55,408,207 ($78,890,619 adjusted to inflation)
Record: 24-58 (.293)
Net Rating: -6.3
There were high hopes for this season in Toronto but injuries made it a tough stretch. Their big man Hakeem Olajuwon announced his retirement due to his back issues and star Vince Carter missed a lot of time with an ongoing knee injury.
9
Minnesota Timberwolves, 2019-20
Dan Hamilton-USA TODAY Sports
Payroll: $114,202,982
Record: 19-45 (.297)
Net Rating: -4.0
The season was cut short due to COVID-19 but the Minnesota Timberwolves were one of the worst teams in the NBA. Midway through his sixth year with the organization, Minnesota traded away former No. 1 overall pick Andrew Wiggins.
10
Miami Heat, 2002-03
(JEFF KOWALSKY/AFP via Getty Images)
Payroll: $57,378,326 ($81,695,690 adjusted to inflation)
Record: 25-57 (.305)
Net Rating: -5.8
Miami had some tough luck this year as Alonzo Mourning, their highest-paid player, missed the entire season due to kidney problems. Meanwhile, their top scorer Eddie Jones also missed nearly half the season due to groin issues.
11
Washington Wizards, 2009-10
James Lang-USA TODAY Sports
Payroll: $73,440,274 ($87,212,893 adjusted to inflation)
Record: 26-56 (.317)
Net Rating: -5.3
This was a particularly rough year for the Washington Wizards, who had high hopes but lost Gilbert Arenas and Javaris Crittenton for the second half of the season due to a gun-related suspension.
12
Los Angeles Lakers, 2013-14
Kirby Lee-USA TODAY Sports
Payroll: $77,423,614 ($84,930,083 adjusted to inflation)
Record: 27-55 (.329)
Net Rating: -6.0
This was the first time that the Los Angeles Lakers missed the playoffs in nearly a decade. They lost Dwight Howard during the offseason and while Kobe Bryant returned from a torn Achilles, he played just six games after breaking his knee.
13
Toronto Raptors, 2005-06
(Photo by Doug Pensinger/Getty Images)
Payroll: $62,411,884 ($82,192,110 adjusted to inflation)
Record: 27-55 (.329)
Net Rating: -3.2
Perhaps the most notable moment of the season for Toronto is when Kobe Bryant scored 81 points in a single game against them. Looking back, it is surprising to see this team paid the luxury tax considering the noticeable lack of star power on its roster.
14
Atlanta Hawks, 2003-04
(Photo by Jonathan Ferrey/Getty Images)
Payroll: $64,497,340 ($89,932,175 adjusted to inflation)
Record: 28-54 (.342)
Net Rating: -4.8
The Hawks were struggling and midway through the season, forward Shareef Abdur-Rahim was traded to the Portland Trail Blazers. Head coach Terry Stotts was fired at the conclusion of the season.
15
Memphis Grizzlies, 2002-03
(MATTHEW CRAIG/AFP via Getty Images)
Payroll: $61,009,172 ($86,865,318 adjusted to inflation)
Record: 28-54 (.342)
Net Rating: -3.5
This was the second season in Memphis for the Grizzlies, whose head coach Sidney Lowe resigned after just eight games. The highest-paid player on their salary sheet was Bryant Reeves, who was still owed $13 million despite playing his final professional game in 2001.
16
New York Knicks, 2009-10
(Photo by Nick Laham/Getty Images)
Payroll: $85,710,076 ($101,783,713 adjusted to inflation)
Record: 29-53 (.354)
Net Rating: -4.0
Seven-time NBA All-Star wing Tracy McGrady played just half a season for the New York Knicks. He averaged just 9.4 points per game during his 24 appearances with the team.
17
Phoenix Suns, 2003-04
(Photo by Jeff Gross/Getty Images)
Payroll: $66,931,770 ($93,326,635 adjusted to inflation)
Record: 29-53 (.354)
Net Rating: -3.8
The Phoenix Suns had made the Western Conference playoffs in 2003 but were sluggish out of the gates the following season. They fired head coach Frank Johnson after starting 8-13. Phoenix later traded both members of their promising backcourt, Stephon Marbury and Penny Hardaway.
18
Detroit Pistons, 2011-12
Tim Fuller-USA TODAY Sports
Payroll: $70,923,605 ($80,482,110 adjusted to inflation)
Record: 25-41 (.379)
Net Rating: -5.0
During their first season under coach Lawrence Frank, the Pistons were not able to make much of a splash after the 2011 NBA lockout. This was the final professional season for Ben Wallace.
19
Portland Trail Blazers, 2006-07
(Photo by Jonathan Ferrey/Getty Images)
Payroll: $75,026,386 ($94,714,055 adjusted to inflation)
Record: 32-50 (.390)
Net Rating: -4.8
The Portland Trail Blazers were rebuilding after drafting LaMarcus Aldridge and Brandon Roy. But they still had a decent amount of money owed to veterans Zach Randolph, Raef LaFrentz and Derek Anderson.
20
Minnesota Timberwolves, 2006-07
Joe Robbins-USA TODAY Sports
Payroll: $66,820,673 ($84,355,083 adjusted to inflation)
Record: 32-50 (.390)
Net Rating: -4.0
This was the last season that Kevin Garnett would play with Minnesota before he was traded to the Celtics. Despite him winning NBA MVP just a few seasons earlier in 2004, the Timberwolves failed to surround him with much talent.
21
New York Knicks, 2008-09
© Robert Deutsch, USA TODAY
Payroll: $96,643,646 ($113,130,233 adjusted to inflation)
Record: 32-50 (.390)
Net Rating: -2.5
The Knicks had the highest payroll in the league but were in the middle of a transitionary season, trading away two of their leading scorers in Zach Randolph and Jamal Crawford and waiving Stephon Marbury.
HoopsHype’s Alberto de Roa contributed research to this report
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