[Boston Globe] Owners offer NHL-like 'flex cap'...

ok so tell me if i'm wrong about this

Salary total of all teams is 62x30m,(supposedly 8% is withheld) and if teams are over, the whole league's players get back an equivalent proportion of that.

There's no more s+t's or trading at all if over the cap.

Only Bird re-signing, mle and presumably rookies?

 

Wait what now? Maybe I'm lost now. I just assumed it meant that players would get essentially a pay cut if teams were over... Now I'm lost...

 

i think if the league spends more than $62Mx30 all players chip in to put the money back. for example $62M x 30 = $1.86B. if the owners spend a collective $1.96B, that puts the players over the cap by $100M. the players collectively would have to reimburse the owners for that amount.

i could be wrong but thats what i got out of reading this.

 

That's how i understood it also, is that how the NHL cap works?

Anyone know how they determine how much each player pays?

 

Isn't there a moral hazard problem here?

If I understand this correctly, teams can go over the cap without worrying about a luxury tax, fully knowing that it's the players who will pay the price. Owners who are willing to spend more (Lakers, Knicks, Nets, Heat, Bulls, Mavs, etc.) can technically have a payroll of more than $80 million, and players on the Bobcats are going to have to lose some of their salary, no? What's to keep teams from overspending under this?

 

it seems to me, part of the flex cap is that if you do go over the cap, you can't bring aboard anyone, even by trade that's not an mle.

 

Any player who is not franchised should have the ability to opt of any deal if they are on a over the cap team that is having salary reduced across the board.

If this is done team payrolls will self correct. If a player is loves the city he plays in and wants to stay no matter what he will take the cut if the team is over the cap. If a player knows that if he opts out he could go to a team with a lower pay roll and get the same contract with out the cut or more money in general we would do it.

In this flex structure the big 3 in miami could still happen but they would all have to take a 3 or 4 mil a year pay cut to field a competitive team.

 

From my understanding of the Flex proposal, not coming from the Globe article:

The Flex Cap, basically, is the current system with the luxury tax replaced with a hard cap. I'm surprised that they're keeping the MLE around at all, but the idea is that you can't use it to break past the hard cap, only the soft cap.

The "payback" would come in to play if all the teams had a payroll close to the hard cap.

All contracts are immediately shaved by 8% to give higher payroll teams breathing room. Not sure where they see the hard cap landing. If it's at the current tax line ($70M), the Lakers are in for it ($89M committed next year even after shaving the 8%).



The current CBA was designed so that players would get a 57-43 split of BRI, but we've got a cap of $58M and an average payroll of $67M. The other issue is that numerous teams have seen their post-recession revenue hover well below the cap (Pacers, Bobcats, Kings, etc....neighborhood of $50M).

Stern recognizes that he needs to avoid an MLB environment of Yankees and Redsox outspending small markets by a factor of 3, hence his late season comments about not wanting to see teams having to pay the luxury tax in order to contend. If you're a kid in Milwaukee, you're going to lose interest if you know your team can't spend like the Lakers to chase a title.

There's also truth to the notion that a number of teams simply can't afford to maintain operations in the current system, with over a dozen taking massive loans from the league to stay flush. It's never good when you see a team openly riding the bare minimum payroll like the Kings just did.

 

So if I read this right, irresponsible spending by teams hurts ONLY their own players financially, and I guess the implicit penalty of irresponsibility by the management would be that you overspend > your players get screwed > they leave for a more responsible team.

If true, that actually is a clever way to eliminate the Yankee effect of being able to build a winner by outspending anyone else. If, say, the Lakers want to keep their core together they'll have to convince all the players to take a damn near 50% pay cut.

 

If this is correct, then say if Lebron, Wade, and Bosh REALLY wanted say a CP3, they could do it if they were basically willing to take a pay cut.

 

If they were all willing to play for 8m each, you couldn't stop them under any system from not having Howard, Bosh, James, Wade, Paul

 

That line-up would dominate soo easily that it would be historic. The shoe contracts alone would make up the lost payroll revenue.

 

I don't believe this is what they are proposing.

The Flex System will have a Minimum Payroll, a soft cap, and a Hard Cap

You can exceed the soft cap with Bird rights, MLE, vet minimum deals, etc...but you can't exceed the hard cap no matter what.

The "payback" aspect is not a team-to-team issue. The NBA would add up all the salaries in the league at the end of the year, and if they exceed the allowable revenue split, all players in the league are hit for the % above it.

Only way the Heat could get CP3 is if they stay at least $5M below the hard cap (after all other roster spots are signed) and he takes the MLE....or they trade Bosh to get him before he becomes a FA.

 

I realize this isnt in mud, much less in stone, but teams that already have contract obligations that exceed the hard cap.....what happens to them?

 

So the "hard cap" and the "payback" are two totally different things, right? The hard cap is about parity. The payback is about money.

 

Not sure. The 8% cutback gives immediate breathing room to almost everyone but LA. And the hard cap isn't a "true" hard cap - teams aren't FORCED to get under it....they simply are not allowed to spend over it. LA would be unable to sign or resign anyone (for over the vet min?) so long as they are over the "hard cap"

They're both about league-wide cost control. The current CBA has loopholes the size of the moon, and despite the CBA being formulated to generate the "happy split", spending is 15% above that number. Coupled with the recession dinging a third of the league badly and the NBA is rightly declaring that they're spending themselves into bankruptcy.

They want to iron in, at a lower revenue split, the money going to players. They want steel barriers keeping total salaries under the threshold.