Billy Hunter mentioned on the BS Report that Mark Cuban suggested an alternative plan where there is only the luxury tax and no cap or excetions below it (or perhaps with only very limited amount of them... he didn't get into too many details). Cuban apparently called it a potential "game changer" and Hunter said he was happy to discuss it but the other owners shut it down. If Hunter liked it, presumably the threshhold for tax is not too low. Also, one presume that there would need to be robust revenue sharing to enable small market teams to spend close to the threshhold. In any case, this reminds me of Morey's comment about him preferring a system with "hard cap and no other rules," which got Morey fined. What are your thought about the Cuban Plan.
This is the key to that plan, and I just don't see the big market owners being willing to share enough of their revenue in order for this plan to be viable for all 30 teams to compete. Also, Morey's preference would expressly prohibit owners from being able to spend any amount they wanted (albeit subject to harsh luxury taxes). That's a BIG difference.
Really, thats it in a nutshell. If the owners were williing to share everything except lux boxes,parking,and concession, the hard cap would be in play sorta. The teams that we all know about who exceed the lux tax threshold do it mainly because of the local tv,cable,and radio deals. The lux boxes to bring in bread, but that other revenue is truly a game changer.
Cuban delves into the luxury tax because he's a fanatic. His no cap plan would definitely benefit him.
However, NBA spokesman Mike Bass says Tuesday that it was the union, not Cuban, who proposed the elimination of the cap, an idea he says "was even worse for the NBA than the union's prior proposals.'' http://www.nba.com/2011/news/10/25/nba-responds-to-billy-hunter-podcast.ap/index.html
Isn’t this just like baseball? The problem of big market teams getting all the superstars is only going to get worse without a cap.
If this is Cuban's plan, I'm sure it doesn't contemplate any revenue-sharing. Dallas is one of the Haves in the league. I'm sure Cuban would love a to have a league where he can spend in whatever way he likes to win, and at least 20 teams don't have the financial resources to keep up with him. He figures smart management will help him beat out the others. I think it may be a symptim of divisions among the owners, but I doubt it is something the league would ever consider. I don't know if the union would really like it either -- probably superstars would soak up most of the money and destroy the middle class.
In the end, the question is, and has always bee, this: Who is going to subsidize the teams in the crappy markets? The answer is either (a) the players or (b) the bigger maket teams. This is where it stands, too, with the "systems/competitiveness" issue, too: Smaller market teams can compete only if there is either a low(er) and hard(er) cap or, if the cap is going to be high(er) and loose(r), the will need to be some form of subsides to enable them to reach the "cap." One way to provide the subsidy is through revenue sharing, where the biggest market teams pay the most. An alternative way to provide the same subsidy would be through an increased escrow of player salary (and the give-back of amounts in excess of the agreed upon BRI). I think the latter is a more viable option since the players are already going to be subject to the BRI share cap anyway. Also, the difference between Morey's thinking and this "no cap" plan is of course cap vs. tax. However presumably we are talking about a tax rate so high that it might as well be a hard cap.
It wouldn't be feasible, unless it was a low threshold and at least $2 or $3 per $1 over. The major problem right now is that free spenders like LA, NY, Mia, etc force lower revenue teams to either outstrip their means trying to keep up or stay inside their budget and languish. On the flipside, the more draconian hard cap being proposed is unfair to the players - Stern wants it set just above the revenue line for poor markets like Charlotte and Sacramento (~ $45M), a drastic cut in player salaries while half the league gets to pocket huge profits. I really wish this would go to arbitration. The NBA bully routine is disgusting to watch. Implement a serious revenue sharing model to protect the small markets and implement a double or triple tax line at $75M. Kill the S&T, Make the MLE available once every two years, make the LLE annual, Make the Bird Exception available once every three years. Done.
The only way a no-cap situation would work was if there was a substantial increases in luxury taxes above the 70 & 80 million mark, to not only contribute to revenue sharing but also deter drastic payroll differences. For example, 1.5X over 70million, and 3X for every over 80million. All tax revenues would be distributed evenly to every team which spent above 50 million. Of course luxury lines will be determined yearly based on revenue just as the current salary cap is. In this scenario, the tax payers for 2010-11 would have been: LAL - 60 MILLION in taxes .... 95mil payroll. ORL - 45 million in taxes .... 90mil payroll. DAL - 33 million in taxes ..... 86mil payroll BOS - 24 million taxes .... 83mil payroll DEN - 24 million in taxes ... 83mil payroll HOU - 3 million in taxes .... 72mil payroll UTA - 1.5 million taxes ..... 71mil payroll Totaling 190 million in taxes as oppose to 91 million last year. Every team would receive 9 million in lux tax revenue sharing except 6, MIN, SAC, CHI, LAC, NYN and TOR. All lux teams also receive a share to encourage spending w/o fear of not receiving tax dollars due to being a few million over as well as to promote rev distribution. In such a scenario, all exceptions are eliminated as well as eliminate the sign and trade option. Most importantly either reduce contract length to 4 year max for resignings (3 year for FA) OR leave contract length at 5/4 but have a mutual buyout option on every contract by paying 2/5 its value in full (not valid in cases of injuries). For example, Arenas has 3 yr 60 million left on his contract, the Magic would pay arenas 20 million to buy him out, though the payment would be made in full, the cap number would be 25/3. Conversely in the case of Steve Nash who has 1yr and 12 million left on his contract, he would pay 4.8 million to escape the contract and become an unrestricted free agent. This provision would allow teams to escape the contracts of unmotivated, lazy, underperforming and disgruntled players while also allowing disgruntled, dissatisfied, underpaid players to escape from talentless teams, bad coaches and owners by buying out.
Also I've noticed throughout the year, a lot of people citing the Miami Heat's super team as an example of how the current cap structure most benefits rich teams, when in reality, their payroll in 2010 was not even in the top half of the league and in 2011-12 would still projected to be lower than 66 million. A hard cap or even this "Cuban Plan" would not effect the Heat or future "superteams", unless it also raised the maximum salary. Therefore, I also suggest eliminating any max on individual salary. Home teams/Re-signings would still have the added benefit of an extra year and higher annual raises. Also rookies should become unrestricted FA instead of restricted FA in year 5. Along with increasing luxury tax rates, adding a mutual buyout option on every contract, eliminating caps, S&T and all exceptions, these changes should result in stars being paid like stars, scrubs being paid like scrubs and teams and players alike happy with not being stuck in crappy situations.
This assumes that teams would continue to be fiscally irresponsible. I doubt that will be the case. This would further screw the small market teams.
I like Morey's idea. Hard cap, no rules. And give the players a bigger cut of the BRI (55%?) so the union will accept. smart management will win (both on court and financially) in this system in the long run, and salaries will mostly go to players who deserve them.
Are there any exceptions for injured players under the hard cap? The NBA gave the Rockets the disabled player exception two years in a row for his injuries. Smart management can't prevent players getting hurt.
With the introduction of a 1.5x and 3x tax, I'd expect teams to be less financially irresponsible, but how would teams being less financially irresponsible further screw the small market teams? If for instance, the Lakers, Mavs and Magic lower their payroll to under 80million to avoid paying the 3x tax, that would help close the gap between them and the rest of the league. Even with teams avoiding the largest tax penalty, contending teams would likely still spend in the 70 to 80 million range and still contribute more to less financially equipped teams than they do currently, due to the 1.5x tax rate. It would be in effect a hard cap for most teams at 80million while benefiting teams who's normal annual payroll would be in the 50-60million.
Of course this plan wouldnt completely solve the revenue problems of small market teams, but it would eliminate alot of the structural problems inherent in the current system in regards to player salary and team payroll. Though admittedly the idea of a mutual 1/2 or 2/5 buyout option in every contract is as likely as an 82 game season this season. Without such, I guess reducing contracts to 4years max for resignees and 3 for new teams would be the next best option along with the buyout option the NBA floated that stretched payments out over a longer period of time.
Am I the only one that likes 5-6 year deals? My NBA 2k team loves wrapping Dwight up on a fat 6 year extension... c
I am stressing "in the long run." In the long run, smart management will factor in injury risks in their personnel decisions and how they construct their teams. It's like playing poker. The good players will win in the long run even if they are hit by crappy hands like everybody else.
