No Salary Cap Smoothing. Huge Cap Increase Set for 2016 [ESPN]

Yep. The cap smoothing rejection doesn't do anything about the pending work stoppage (which I predicted on here with a thread well in advance.)

Lebron and Paul have hoodwinked the other players. They've been very vocal about how the players are getting screwed and what not and they've ginned up the base so much that they will reject anything the league offers financially. The end result is Lebron and Paul are going to get super fat contracts and there will STILL be a work stoppage.

Yay for the players that are free agents that year, every other player in the league will lose money as a result.

 

Which is why I originally said there will likely be a work stoppage regardless.

I also presume the "exception" contract values go up with the hike... which is the contract that most role-players rely on anyways.

 

We can all agree on that.

 

Yeah, everything that is tied to the cap goes up, but it's a one year boon. That's why the players are making a mistake. The only players who benefit will be that year's free agent crop.

I also wouldn't be shocked if the NBA owners do some sort of unofficial collusion like the NFL owners did during the uncapped year.

 

You know how the greats that were drafted in the 70's and 80's were thinking "Damn, I was born in the wrong era!" when it came to player salaries? Now the players that were drafted in the 90's can feel the same way.

 

Don't teams at the cap have a MLE every year they "could" use though? That won't be just a "one" year thing, will have increased value, and still is the contract most good role players end up settling for.

Agree that the work stoppage will be harsh and expected.

 

Yes, but they would have gotten that money anyway through a redistribution.

The difference is that instead of the money being distributed to all players it will now be distributed only to free agents. Then we will have a work stoppage and the owners will break the backs of the players again and when it is all said and done the people who benefited from the decision not to smooth the cap will be the players who hit free agency that year, particularly the stars like Lebron who will make tens of millions more.

 

This is true if the same system exists in 2017 and beyond. In that scenario, the players really hurt are the ones that are on their last contracts or just recently signed long-term deals so they don't get to benefit until 2018 or 2019.

But with the work stoppage coming, it's likely that the system is completely restructured again. So it's unclear whether there will be max contracts or MLEs or anything else. The free agents in 2015 are stuck in the old system and are forced to sign lower deals or take on added risk by only signing 1 year deals. The free agents in 2016 get a whole bunch of teams splurging and throwing money around. And the free agents in 2017 have a lot of uncertainty as to what they'll get or how long any work stoppage will last.

Basically, the people that definitely come out well are the 2016 FAs, which happen to include Chris Paul and Lebron James. Smoothing would have made sure everyone got at least some benefit from the new TV money. It would also have strengthened the union's hand in 2017 negotiations because all the players would get an immediate windfall to help them last longer before they cave because they are going broke.

 

LMAO wow... The players will and should take what the market is willing to pay. Whether they already make enough or not is irrelevant.

I dont know if you're a working professional or still in school, but if your boss were you offer you a substantial raise, would you decline? I'm gonna guess "no".

 

This is the other thing. Smoothing would have seen every single player get an unexpected chunk of money fall into their laps. That would have been huge to help them get through a potential lockout. Instead that money will be concentrated with a few players.

And as we keep pointing out, coincidentally Lebron James and Chris Paul, the two union leaders, happen to be the two players who will benefit the most from this decision. Gee, I wonder...

 

I am not exactly sure what the rejected "smoothing" proposal is after reading some brief descriptions in these articles. Maybe I wasn't reading carefully enough.

Specifically, I am not sure how the excess funds are to be distributed. The ESPN article linked in the OP says that it will be handed to the union and distributed "evenly." Does this mean that every member of the union gets exactly the same amount of money-- something like 1/470th of the total money? So Dwight Howard and some guy on a 10 day contract get the same bonus? Or does "evenly" mean proportional to the actual amount they earned in salary-- where a guy who made $2M in salary will get a bonus that is twice the amount of the bonus received by a guy who made $1M?

Also, does this thing affect anyone's salary for the 2015-16 season or will everything only start to take place after summer 2016?

 

Not clear. Either way, more members of the union would benefit under either scenario.

Also keep in mind that the cap would still go up, just not by the record number. So players who hit free agency would still see a bigger advantage with the increase to the max, etc., but they just wouldn't get to gobble all of it up.

 

Not sure this is necessarily true.

If the "smoothing" kicks in starting in summer 2016, the only ones who are guaranteed to benefit are players already under contract at or past the 2016-17 season-- for example, Carmelo Anthony. The vast majority of the NBA are not under contract past summer 2016. How "smoothing" works for you if you are, say, Donatas Motiejunas, Corey Brewer, or Joey Dorsey isn't 100% clear. It's not crazy for somone like DMo or even Dorsey to just prefer having a $90M cap rather than, say, a $75M cap and a 20% bonus.

 

Memphis Grizzlies owner faints

 

The money stems from the new TV contracts. In order to argue that the massive TV deal is a bad thing, you would have to believe Time Warner (TNT) and Disney (ESPN) keeping the money is a good thing.

'Enough' is completely relative. Quite frankly, stars like Durant, LeBron are grossly underpaid compared to what they would get in a open market. Are they underpaid compared to the average person, hell no, but they aren't the average person. Millions of average people are willing to pay to watch outstanding talent play basketball, which is why they get paid so much.

 

Spoiler

[rQUOTEr]Don't want to bring you down from your Kyrie High, but there's traffic up the road.

Last week's official decision by the National Basketball Players Association to reject the "smoothing" concept suggested by the NBA -- the union had already made it clear during All-Star weekend it had no idea of accepting the proposal -- continues the game down the path toward a 2017 work stoppage.

It doesn't have to end that way, of course. The current Collective Bargaining Agreement that came out of the 2011 lockout was a huge win for the owners, most of whom are now making money, propped up by the three-legged financial triad of enhanced revenue sharing amongst themselves, substantial salary savings from the players and the massive injection of $24 billion into their bloodstreams by ESPN/ABC and Turner Sports (which runs NBA.com) over the next nine years.

But that very largesse is part of the problem.

Both the NBPA and the league have incentive to opt out of the current CBA (which runs through the 2020-21 season), as each can do by Dec. 15, 2016. That means owners could impose a lockout as early as July 1, 2017.

Gulp.

Both sides need to tread lightly going forward. There are a lot of moving parts that will come with the new TV deal, and there aren't many easy answers. Both Michele Roberts, the Executive Director of the NBPA, and NBA Commissioner Adam Silver have some tough choices ahead.

Without smoothing, the cap will spike in 2016 -- from its current $63 million to an estimated $90 million for the 2016-17 season. And the floor -- the minimum amount that every team must spend on salaries -- would increase from the current $56.579 million (90 percent of the total cap) to around $81 million per team in '16-'17. A year from now, just about every team in the league will have significant cap room to spend on free agents.

But.

Players now receive up to 51 percent of Basketball Related Income -- a lower chunk than the 57 percent they received under the old deal. With almost all of the game's financial metrics going north, the union surely is feeling the heat from its members to do something to recoup at least some of the estimated $3 billion in future salaries it surrendered to owners in '11.

But owners also have their spatulas out for a bigger slice of that money pie. Getting the players to give so much the last time may embolden some of the league's hard-line owners rather than placate them. The game is going great, they may well argue, so why not be even more aggressive this time around in getting a bigger share of BRI?

Remember, the league's initial proposals to the NBPA before the '11 lockout began called for a hard cap, salary rollbacks by players and giving players just 41 percent of BRI. The players didn't seriously consider any of those proposals. Later, in November of that year, former Commissioner David Stern said if the players didn't accept the proposed "band" of 49 to 51 percent of BRI from owners, the league would reduce its offer to 47 percent. (Just typing "BRI" again gives me a headache behind my left eye.)

There are still some hard-liners out there. The question is whether they're running things.

In 1998, owners said they had to stop contracts like Kevin Garnett's $126 million deal with Minnesota from becoming commonplace. In 2011, owners said the current financial model was unsustainable, and the league decried the lack of competitive balance (though some of us have repeatedly written and said that the NBA has never had competitive balance).

But today, teams like the Milwaukee Bucks are now making money because of revenue sharing. The Los Angeles Clippers' $2 billion sale may have been an outlier, but franchise values have never been higher, and show no signs of dropping. And the huge repeater tax on teams that have paid luxury tax the last three seasons (next year, it will be three out of the last four seasons) has chilled salaries at the top end. By all available metrics, this system is working.

So wouldn't it make sense to let things continue as they are?

Have you ever met a rich guy who said 'you know, I've made enough money. I'm good'?

That's a separate issue, though, from the smoothing proposal.

The NBA proposed a deal that would gradually work in the new TV money over a three-year period, while not reducing the overall payout to the players. The idea (at least, how the NBA spun it) was that the smaller increases would give more players an opportunity to get good deals.

The NBPA didn't buy that version, saying it would not sign off on any deal that artificially lowers player salaries for any reason. Players that were under contract in 2016 wouldn't see any of that new money, the NBPA argues, and those who became free agents in '16 would have less money available to them if the cap increase was smoothed.

But the NBPA's rejection of the plan wasn't a shock to the league; the NBA has told teams all along to prepare flexibly for 2016, and have plans for both smoothed and unsmoothed salary caps at the ready.

Going forward, each side has to address issues that should give it pause.

There is the obvious issue of players who won't be free agents in 2016 sitting on the sidelines while those fortunate enough to be free that summer line their pockets. And there are already murmurs of discontent that the jump in the cap will be primarily enjoyed by the game's superstars, who'll all get maximum slices of the pie if they are 2016 free agents -- like LeBron James, the NBPA's newly elected first vice president, who has made it clear he'll sign a one-year deal with Cleveland this summer in order to be free again in '16 -- at the expense of the rank and file.

"Either way, they were getting the short end of the stick," texted one player, a prominent member of the NBPA, on Sunday. "I mean, you could say the same for 'Melo (Carmelo Anthony, who signed a five-year deal to remain with the Knicks last summer)."

True. But Anthony also makes millions off the court every year in annual endorsements -- a perk to which most other players don't have access.

And if the NBPA opts out of the deal, it will not only be giving up a guaranteed slice of a growing pie, but will be walking away from taking a likely second big bite of the pie in the summer of the summer of 2017 -- when Stephen Curry, Russell Westbrook, Serge Ibaka, Jeff Teague, Jrue Holiday and Tiago Splitter all become unrestricted free agents. Chris Paul, Blake Griffin, Gordon Hayward and Kyle Lowry could also become free agents that summer if they opt out of the final year of their respective deals, as could Dwight Howard if he opts in for the final year of his current deal in 2016-17.

(The Summer of '17 would also be the summer in which Anthony Davis finally becomes unrestricted, if he and the Pelicans didn't work out a new contract before then.)

This second expected huge spike in the cap in 2017 has not been reported or discussed much. But both the NBPA and the league anticipate it happening -- which would likely drive the cap past the $100 million mark that summer.

If the current formula works out the way it is now, there would be another big jump in the 2017-18 season, because even though the salary cap is based on revenues, it is also adjusted from year to year. And the huge guaranteed money that would go into the system in 2016 because of the new TV deals would artificially inflate the cap the following season, creating another spike. It will be a tough sell to the '17 free agents to walk away from the same tidy payday their brethren received a year earlier by opting out of the CBA.

However, that cuts both ways.

If teams use all the available cap room they're expected to have in 2017, there is a chance the cap would then decrease for the 2018-19 season. (Remember, the '17 spike would be based on an artificial inflation of the '16 cap. Once the artificial inflation of the cap goes away, the cap goes down.)

That could be a recipe for disaster for both players and owners -- for players who become free agents in '18, and for teams that try to lock up players in '16 and '17 because their deals would be relative bargains going forward, only to have less room than expected in '18.

Owners also have to juggle a lot of conflicting ideas when deciding what to do.
If Silver said it once during the last lockout, he said it a hundred times -- fixing the economic system was a necessity to increase the competitive balance of the league. If the high-revenue teams weren't coerced, strongly, to not spend going forward, the player givebacks would be meaningless. Thus, Silver and Stern wrestled the high-revenue teams to the ground and got them to accept greater revenue sharing, while also imposing the dreaded repeater taxes.

The strategies have worked. Only the Brooklyn Nets spent like crazy the last couple of years, and they have since put the brakes on future spending and taxes while owner Mikhail Prokhorov looks to sell at least part of the team. The Los Angeles Lakers and New York Knicks have kept their powder dry, looking to rebuild through free agency in '15 and '16.

But the new TV money will be very tempting for the previously high-spending teams to tap into.

They won't be able to sign three max players in the summer of '16, even if they conceivably had the full $90 million in cap room available. Max contract amounts for the LeBrons and Kevin Durants of the world (players with 10 or more years of service can get up to 35 percent of a team's cap, though they don't get exactly 35 percent for reasons I leave to the estate of Albert Einstein) will also increase, well north of $25 million per year. While it is technically conceivable to sign three such players with a $90 million cap, it's practically impossible, leaving less than $15 million to sign the other 9-12 players while three max players take up 90 percent of the cap.

But a Miami Scenario -- in which three stars take slightly less than the max to come together, as James, Dwyane Wade and Chris Bosh did in 2010 -- is certainly possible. And given that the max salaries will be stratospheric in '16, asking three stars to live on, say, $20 million a year to allow a team to build around them, isn't farfetched. (Although, with so many teams having major cap room in '16, veterans will also have more options. And, it could make it easier for teams like New Orleans to put players around Davis and keep him from considering other, greener, pastures.)

And that cuts to the very heart of competitive balance.

The system isn't supposed to allow high-revenue teams that can live off of their local TV deals and/or gate to pay their superstars. Talent is supposed to flow through all 30 teams, with the Memphis Grizzlies and Oklahoma City Thunders of the world to be able to remain competitive with New York, L.A. and Chicago.

In the interim, though, teams at least now have firm estimates for 2016 that they can use to decide how to attack free agency that year.

"Teams will be more motivated to get quality players under contract as their salary on a percentage basis will decrease significantly in '16," one team executive said Friday.

There are a few teams and players that will be interesting to follow as 2016 approaches:

• The Hawks: Atlanta has had a dream season so far and has understandably high hopes for a long playoff run. But Paul Millsap and DeMarre Carroll are free agents this summer. GM Danny Ferry, still on leave for his Luol Deng comments, positioned the Hawks to have a shot at major free agents this summer (can you imagine, say, Marc Gasol as the spoke of Atlanta's attack?). Given the Hawks' run so far this season, though, they may not want to do anything but retain the players they already have. But what incentive would, an All-Star like Millsap, who is finishing a two-year, $19 million contract, have in signing a long-term deal when he can sign a shorter one and cash in a year later?

• 2012 Draft superstars: Davis and the Portland Trail Blazers' Damian Lillard, both All-Stars, are the top candidates for maximum contract extensions next fall as allowed under cap rules. Bradley Beal, Harrison Barnes, Andre Drummond, Terrence Jones, Michael Kidd-Gilchrist and Jared Sullinger are also along the spectrum of '12 players who could get big offers.

New Orleans and Portland can each give Davis and Lillard the five-year "designated player" extension each team has at its disposal to use once during the life of the current CBA. If signed this offseason, Davis and Lillard would basically be getting new, six-year max deals -- with the big extension numbers starting in 2016.

Davis is also eligible for the "fifth year 30 percent max criteria," which allows eligible players on rookie deals to get a four-year extension and make up to 30 percent of their team's cap if they reach certain criteria. In Davis' case, he could reach the criteria if he is voted in as an All-Star starter for a second time in 2015. Davis was voted in as an All-Star starter this year, though he was injured and could not play in the game.

Davis' representatives have not yet decided how to proceed with the Pelicans, two sources said over the weekend.

• Draymond Green: The third-year forward has been an indispensable part of Golden State's rise to the top of the Western Conference. Starting every game at power forward for the Warriors, he's averaging 11.6 ppg and 8.2 rpg despite giving up several inches and pounds just about every night.

He's shooting 34 percent on 3-pointers. He leads the league in Defensive Win Shares (4.4), per basketball-reference.com, and is 19th overall in Total Win Shares (7.2). With Green, the Warriors have simply been a dominant team.

But Green will be a restricted free agent this summer. The Warriors can match any offer he receives from another team, but Golden State already has more than $78 million committed for salaries next season -- including Klay Thompson ($15.5 million), David Lee ($15.4 million), Andrew Bogut ($12 million), Andre Iguodala ($11.7 million) and Stephen Curry ($11.3 million). The Warriors will have to ultimately pay Barnes, too, as mentioned above.

Warriors owner Joe Lacob told Bay Area columnist Tim Kawakami last month that the team was prepared to be "very likely very substantially" in the luxury tax next season, which would seem to indicate Golden State's willingness to match any offer for Green. The Warriors have long been rumored to be willing to deal Lee, who'll be entering the last year of his deal next season and would be a valuable trade chip.

Green, though, has hired high-powered agent B.J. Armstrong from the Wasserman Group in preparation for next summer's negotiations. The blogosphere has speculated all year that Green, a Michigan native, has designs on returning home to play for the Detroit Pistons next season. Green is a very good player, but not a superstar. Can he afford to turn down a big offer this summer, even if there may be more teams with more cap room in '16?

So many decisions, for everyone. The NBPA's decision last week makes it a certainty -- unless there's a change of heart (maybe in exchange for other things that are important to the NBPA, such as keeping the age limit for entering the Draft at 19?) -- that the Summer of 2016 will be the most insane free agency summer yet. It will surely be the calm before an increasingly likely storm.

http://www.nba.com/2015/news/featur...ate-of-memphis-grizzlies-qa-with-george-karl/[/rQUOTEr]

 

KD to team up with best friend James Harden or to play with that one dude that got divorced by Kim Kardashian on the Wizards?

The world may never know

 

League to teams: Significant salary cap jumps loom

 

Great! Now the Knicks can assemble another $200 Million dollar roster and fail.

 

I warned you NBA players.