Tag: NBA hard cap

Dallas Mavericks v Oklahoma City Thunder - Game Four

Would a hard cap really be good for small markets?


When we talk about a hard cap, we wonder how the Lakers at $90.4 million, or the Magic at $89.9 million, or the Mavericks at $86.6 million would get under those numbers. (For all of you out there that thought Dallas winning the title was a triumph of building a team over buying one, know the Heat spent just $66.7 million on salary last season.)

But smaller market teams who try to draft good talent and keep it together — teams like the Oklahoma City Thunder — would be ripped apart too, as Royce Young wisely points out at CBS’s Eye on Basketball blog.

Kevin Durant just signed a five-year extension that will pay him around $16 million a year. Russell Westbrook, an All-Star point guard at the age of 22, is eligible for an extension and would probably have it if there weren’t a lockout. He’s probably a max player or close to. So that would be another major mark on the cap for the Thunder. Then the other guys — Serge Ibaka, James Harden and Eric Maynor — all eligible for extensions next summer.

If the league has a stiff cap of even $60 million, how can the Thunder dream of re-signing these guys and keeping the core intact? Answer: They can’t….

Reality is, a hard cap might have more of an affect on the little guys, which is who the league wants you to think it desperately wants to protect. But basically, with a hard salary cap system, building through the draft and letting a core grow together is no longer the way to go. Put together a roster with five good players that need extensions and you’re out of room after three. Maybe you can get four, but how do you add another nine guys to fill out a 13-man roster?

If a hard cap does flatten out the talent base, you’ll see teams trying to do what Dallas did in the sense of having one elite star then trying to put more affordable veterans around them.

Which is to say, the NBA’s middle class will go away. What drives up the Lakers payroll is less Kobe and more Lamar Odom and Andrew Bynum and Ron Artest. They can afford to go over the cap and pay to keep good role players around their stars. But those days will end, it will be the high priced stars and the cheap guys around them. And some smaller teams that draft well will have to break up that core because they will bump up against the hard cap.

It’s one reason I think in the end you will still see a soft cap — one with far fewer exceptions but one that lets teams keep their cores together. Because what we want to see is good basketball, and drafting a team that can grow together is one of the best ways to get that.

Report: owners “big” concession is hard salary cap phased in

NBA & NBA Players Association Announce New CBA
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When the owners submitted their new proposal to the players at the end of last month, they said they had heard the players concerns and made concessions.

Apparently, that big concession is to phase in a hard salary cap over two years rather than just drop it on everyone next year, according to Marc Stein of ESPN. That’s not much of a concession, but there you go.

Sources told ESPN.com this week that the central change made by owners to past collective bargaining proposals called for easing in a more restrictive financial landscape over a three-season cycle as opposed to trying to impose a hard salary ceiling with immediate effect next season.

The league, sources said, regards this as a major concession, since the next two seasons would employ a salary-cap system with luxury-tax penalties not unlike the system currently in place…

Sources said the owners’ latest proposal, however, does still call for immediate rollbacks of 15 percent, 20 percent or 25 percent to current contracts depending on salary levels, as part of the league’s oft-stated desire to reduce payroll by roughly $800 million leaguewide on an annual basis.

If you want to know what are the two words that could cost the NBA all of next season, they are “hard cap.” If you want to make it four words, add “salary rollbacks.”

The owners remain insistent on those things.

The owners want an NFL style salary cap — the number is the number. Whatever it is you can’t go over it. The players an their union want a system closer to what exists now with a “soft cap” a team can exceed if it chooses to, but it would pay a penalty in terns of a dollar-for-dollar tax. This season, the Lakers will pay about $21 million in that tax, the Mavericks $20 million. About seven or eight teams will pay the tax (a couple of teams are right at the line and if they do pay it will be little).

The new proposal also calls for non-guaranteed contracts and a type of franchise tag that would offer great incentives to a player to stay with his current team. How well that would work in a hard cap world is a good question (right now teams can exceed the cap to keep their own players).

What does this report really mean?

Savor these playoffs. It’s going to be a long time before we see NBA basketball again.

Wizards’ owner Ted Leonsis likes NHL-style hard salary cap. Must like lockouts, too.


Leonsis_Wizards.jpgUPDATE 7:31 pm: NBA Commissioner David Stern tried to contain any damage that came from Leonsis (plus hit Leonsis with a $100,000 fine for talking about the CBA, all done within a few hours, just so you know Stern is not messing around):

“We’re negotiating and that was one of our negotiating points,” Stern
told the Associated Press, “but collective bargaining is a negotiating
process, and that was not something that Ted was authorized to say and
he will be dealt with for that lapse in judgment.”

4:23 pm: Washington Wizards and Capitals owner Ted Leonsis went through the ugliness of the NHL lockout that cost the league an entire season — and set the sport back considerably in public opinion. Check the television ratings.

But Leonsis seems to like what came out on the other side of that, enough that he thinks the NBA should go down the same road. He said as much meeting with a Virginia business group today, as reported by Fanhouse:

“In a salary cap era — and soon a hard salary cap in the NBA like it’s in the NHL — if everyone can pay the same amount to the same amount of players, its the small nuanced differences that matter,” Leonsis said.

Because Leonsis is not officially authorized to speak regarding the ongoing NBA labor negotiations, he refused to expound on his remarks when asked to clarify after his speech. But he did note that he is a huge fan of the NHL’s system, praising it and noting that it is a good one that works fairly.

“It’s working,” he said. “The teams are very, very competitive. There is no way that big markets teams can outspend small market teams. So when the season starts everyone thinks their team can compete for the Stanley Cup.”

Two thoughts here.

First, the NBA Players Association is not going to take a hard cap — not when the owners just sold $100 million more in season tickets than they did a season a go. After a year where the overall league revenue was up. If you want a hard cap you’re in for a long, drawn out, ugly fight.

Commissioner David Stern has countered that teams had more expenses to get that revenue up. They had to discount tickets and hire more sales staff, for example. My thought — welcome to the recession. At my favorite restaurant down the street from me, the owner is surviving and doing pretty well but he has to give away more meals now, market more and smarter, and generally work harder for a little less. The NBA is no different. Suck it up and don’t complain about it.

Secondly, the NHL salary cap is not the simple solution you may think.

As of this year, NHL players will have a salary cap set based on 57 percent of “hockey-related income.” Which is almost identical to the percentage of Basketball Related Income the NBA players get right now. It’s divided up differently (and the NBA’s pie is larger), but the percentage is the same. If the NBA used that model, the salary cap would likely be much closer to or higher than the luxury tax line now.

Also, some sites keep talking about the $40 million cap the NHL had when it came back from a strike. That was 2005-06 season. This year, the cap is $59.4 million with a salary floor of $43 million. As Joe Yerdon from our own ProHockeyTalk told me, a lot of teams are now complaining the must spend more than they could spend at all just a few years ago. Not all NHL teams are raking in money.

In the NBA’s case, whatever system is in place will need much better owner revenue sharing. And don’t for a second think all the owners are on the same page with that.

Also, if fans think you get a deal out of this, think again — NHL ticket prices now are higher than they have ever been.

One final note on all this — the NBA is having a renaissance of popularity. The Lakers/Celtics finals followed by what happened in Miami this summer vaulted the sport up the popularity ladder to Jordan era levels.

A lockout that costs games kills that. Fast. Dead. The NBA will lose the casual fan it is getting back now, and it will be 10 times harder to get them back. And then everybody’s revenue goes down.