There were no champagne showers in the Washington Wizards’ locker room after their win Wednesday in Phoenix. No raucous celebrations, even though the night represented one of the few moments of consolation during this failure of a season. The win, a 124-121 escape against one of the worst teams in the NBA, wasn’t the reason a little jubilation would have been warranted. Instead, a little-known fact about the business of basketball gave the Wizards something to cheer at last.
That day, five-time all-star point guard John Wall missed his 41st game because of season-ending surgery to remove bone spurs. The Wizards had fulfilled their 41-game deductible, and insurance would kick in to cover the remaining amount of Wall’s 2018-19 salary.
The NBA mandates that all 30 teams insure at least the five highest salaries on their roster. Every organization uses the same insurance company, determined by the league, which provides compensation in the event of an injury that forces a player to miss a significant amount of time. If one of those players gets hurt, then the team is still on the hook for his salary for the 82-game season. But if he remains on the sideline with the same injury for 41 games, the insurance pays 80 percent of the rest of his salary.
Wall’s latest injury, an Achilles’ rupture, will keep him out until at least early February 2020. While the Wizards were rightfully devastated by the setback, which interrupted the 28-year-old’s prime, the injury could benefit the team’s bottom line.
Wall and the Wizards have not discussed the potential of him sitting out for the entire 2019-20 season, according to a person with knowledge of the situation. The plan remains for Wall to rehabilitate and come back healthy, however long that takes. Whether he plays or not, Wall’s “supermax” contract extension is set to begin next season, making him one of the highest-paid players in the NBA: He’ll have a $37.8 million starting salary.
If he does not play next season, 80 percent of that salary, up to a certain amount, is eligible to be paid by the insurance. That would return a substantial amount of money to the Wizards. While unlikely, even if Wall returns on the early end of the rehabilitation timeline (12 months from the time of his surgery), that’s still at least 50 games of salary that largely will be covered by insurance because the deductible does not reset into the next season.
Still, a February 2020 return for Wall makes little sense, especially when reviewing recent history. Take, for instance, Kristaps Porzingis, who tore his left ACL in February 2018. The original recovery timeline, albeit a loose one, was 12 months. But Porzingis has not returned to the court and will miss the entire 2018-19 season. In February, the New York Knicks traded him to the Dallas Mavericks.
Because Wall will miss most of the 2019-20 season during his recovery, as soon as the games begin, the insurance company — not the Wizards — will be paying 80 percent of his salary. Washington will be responsible for only 20 percent of his income.
In less than a year, the Wizards will have transitioned from a team steeped in the luxury tax to an organization receiving financial relief.
This season, Washington started with heightened expectations because majority owner Ted Leonsis had committed so much money to the roster. With three maximum-contract players, the Wizards were on track to soar over the luxury tax line while carrying the fourth-highest payroll in the league. This prompted Leonsis to equate all those zeros on his players’ pay checks to on-court success.
“We have one of the highest payrolls in the league with the Wizards,” Leonsis told NBC Sports Washington in September while speaking about the team’s new practice facility in Southeast Washington. “All right, Wizards. If you have this practice facility and one of the highest payrolls in the league and you’re getting well-tended for your health, nutrition and the like, no excuses. Let’s play ball.”
But it didn’t take long for the team’s front office to start meticulously scaling back salary.
In October, the Wizards traded Jodie Meeks, who was serving a drug-related suspension, and saved at least $7 million in salary and luxury tax. The team got busier in December, shipping away Jason Smith and his $5 million salary. Smith was a unifying force within the locker room and a popular figure with the fan base, but he was making too much money to be the third center on the roster.
By the end of that month, Washington traded 23-year-old Kelly Oubre Jr. for a swingman 10 years older, Trevor Ariza. The move hinted at the Wizards’ intentions this summer: There appear to be no plans to spend in free agency — not even when it comes to homegrown talent such as Oubre, who played the majority of his first four seasons in Washington.
When Wall suffered his Achilles’ injury, the organization made an emergency move to get out of the luxury tax and create financial flexibility for the upcoming year: Washington reversed course on building around its three max players and parted ways with Otto Porter Jr. As the team was shopping Porter before February’s trade deadline, Washington entertained offers that would have brought back a first-round draft pick. Those deals would have also saddled the Wizards with more salary, though, and the team aimed to have salary cap space and remain under the luxury tax. So Washington settled on the Chicago Bulls’ offer and received a pair of pending free agents (Bobby Portis and Jabari Parker, who has a team option of $20 million this offseason) in return.
Then came Wednesday in Phoenix, a big win for the organization. The Wizards hit their deductible. Massive compensation will be coming their way.
The Wizards won’t make the playoffs, but by reaching their deductible on Wall, there are a few million ways to wash some of that sourness away.
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