If you’re hoping the NBA can avoid a lockout in the summer of 2017, Adam Silver did not make you feel particularly good on Wednesday.
The big news out of the NBA Board of Governors meeting (the owners and their committees) was the rejection of a draft lottery reform proposal. However much of Silver’s post-meeting press conference focused on the massive influx of money coming into the system in the new $24 billion television deal the league just signed and how that will impact things going forward with the owners and players.
Silver said it was too early to think about the next CBA talks (even though you know they are planning for it already) and that even with the new CBA there are issues.
“So what this new television money will mean, of course, is that teams will have a greater opportunity to be profitable because remember, this money doesn’t come into our system until 2016 and ’17,” Silver said in his press conference broadcast on NBA TV. “ We still have roughly a third of our teams that are not profitable under the current system, despite revenue sharing.”
The opportunity to be profitable was one of Silver and then Commissioner David Stern’s big talking points during the last CBA negotiations and lockout. The owners won big in that negotiation and, in their view, came closer to a system where every team has the opportunity to be profitable and every team can compete for a title. After the public press conference Ken Berger of CBSSports.com pressed the Commissioner on how exactly that should play out. Does every team have to be profitable?
“No,” he said. “No, because the caveat has always been, if well managed. And I would also say, if you don’t have a hard-cap system, for example, one of the teams that isn’t profitable are the Brooklyn Nets. That’s an election they’re free to make under our compensation system. They’ve elected to be unprofitable. My preference would be to have a harder cap, where teams couldn’t elect to spend so much more than other teams.
Ahh, the “hard cap.” A more NFL style cap. A lot of owners would love that. You can bet that is back on the table from the owners in 2017. If that’s on the table the players will oppose… and here we go again.
“There’s gradations of hardness in terms of the cap as well. I wish our current cap system was harder. It’s what we proposed last time around, but we compromised.”
• The other main money topic was “smoothing in” of the money from the $24 billion television deal, so that the salary cap doesn’t just jump massively in the summer of 2016 and throw off the system. Silver said talks are underway.
“So first of all, on the television money, we have begun a discussion with the union where we would in essence the expression we use is create a smoothing of the money in essence, rather than having in ’16’17 such a dramatic increase in the cap in one year, we would smooth the increase in. The players would still receive what becomes 51 percent…” Silver said.
“What we’ve begun discussing with the union is a plan in which, for a smoother operation of the cap, while the players would still receive every nickel of their 51 percent that year, we in essence would artificially lower the cap and then make a shortfall payment directly to the union, and then they would then distribute that money, presumably proportionately, to the players.”
Expect the players union to sign off on a version of that. Remember that teams have a spending floor — they have to get up to 90 percent of the cap — so if the cap makes a massive leap in one season that summer’s free agent class is going to disproportionally benefit (those dollars have to be spent). If you smooth this in over three or four years, then multiple free agent classes get a kick at the can and make more money.
• Silver discussed what derailed the lottery reform proposal that seemed a lock 48 hours ago:
“I think in essence, the owners were concerned about unintended consequences. I think we all recognize that we need to find the right balance between creating the appropriate incentives on one hand for teams to of course win, and on the other hand allowing what is appropriate rebuilding and a draft to work as a should, in which the worst performing teams get the highest picks in the draft, and we’ve tinkered with the draft lottery several times over the years. I don’t necessarily disagree with the way it works now. I’d say from a personal standpoint, what I’m most concerned about is the perception out there right now. Frankly the pressure on a lot of our teams, even from their very fans, to somehow underperform because it’s in some people’s view the most efficient and quickest way to get better, so I think that’s a corrosive perception out there….
“…but I think there was a further concern, too, that we’re changing the rules midcourse, that based on the current odds in the draft lottery, teams made certain selections in the draft, traded accordingly, and now we’re already in essence midseason, because we’re into the preseason already, rosters to a certain extent have been decided, and now we’re changing the rules, and I think the sense from the Board was the competition committee, one, needs to continue to make sure they understand potential unintended consequences, and also we have to come up with a timeline for implementing it where teams are appropriately on notice so that they draft and trade accordingly.”
• Silver said multiple bidders have stepped up looking to buy the majority share of the Atlanta Hawks that is up for sale, but that the current ownership’s stated timeline of the end of the year to get it worked out is likely optimistic.
• Finally, the NBA set up a new David J. Stern Sports Scholarship to “provide talented and promising students the opportunity to further their study of sports management.” Those that win the scholarship with both get $30,000 a year toward college and get to intern a couple summers at the NBA league offices.
