[SportingNews] SBJ: NBA proposes $45 million hard salary cap

I like a hard cap. But 45M is obviously a lowball.

 

I don't know why people think this will screw Miami. Miami is only going to dominate more and more under the hard cap. And it's not going to stay at 45 mil without some rolling back of salaries. It's not even just a Miami thing. Every team is going to be screwed by this, short of salary-clearing teams like Houston or Boston. If the owners can get a $55 mil cap(same as this year) but make it a HARD CAP, they'll probably be happy. Especially bigger teams who can slice off deadweight easily.

45 mil is obviously bullcrap. But that's how things work unfortunately. There's no chance the owners are going to throw out a realistic figure first. It's annoying for fans, but it's what you get when the owners want to wait the players out.

 

Edit for the missed sentence in the middle.

 

That's called positional bargaining, and it rarely ends with both sides satisfied.

 

It's interesting to see this after seeing the NBA's previous proposal had backed off an immediate hard cap - proposing a soft cap for the next two years before revisiting the possibility.

As far as "trouble," IIRC the NBA originally was asking for a hard cap coupled with an immediate across the board 40% reduction in player contracts. Fans like myself expected contracts to remain the same and a return of the Allan Houston rule to allow over the cap squads like LA get to/under the new cap line.

$45M has to be a lowball negotiating figure - the current cap is already established by a revenue formula, so there's literally no call for a hard cap to be 80% of the current one. The issue today is the exceptions (and trades allowing for huge disparity in total length of contract money) permitting teams like the Lakers to swell payroll to 150% of the cap.

$45M only works if you take the worst revenue squads (Pacers, Hornets, Nets, Wolves, etc) and create a cap line that they would profit under. The thought there would be that the Lakers and Knicks would be hugely profitable and wouldn't care. BUT - the players have no reason to agree to a model that will make a current 55-45 split become 30-70.

And yes, should this continue, there will be a LONG, UGLY lockout. The players do have to make severe concessions - a third of the league is in dire straits. But what how many of us would sign off on a 40% paycut?

 

I agree with you. I always felt that a hard cap would be realistic if it was somewhere between $65 - $70 million. I also think that they should keep the contracts guaranteed but reduce the length of the contracts to 3 years if a player signs with another team and 4 years if a player resigns with their own team. That alone would greatly improve the trade activity throughout the league because each contract would be much more manageable even though some players will bound to still be overpaid due to the bidding war between teams.

What owners need to realize is that one of the biggest problems in the league is that there are too many stupid and selfish GM's employed by the owners. They overpay players in order to keep their jobs in the short-term instead of doing what's best for the organization in the long-term. No matter what concessions the owners end up winning from the union that problem will still exist.

 

Whole heartedly disagree with that. Management uses it all the time. They have a number they can live with. The workers will balk at whatever the starting number is anyway, so the starting number is way low. Management then raises the number in gradual increments until the workers say "I can live with that". The workers think they have a better situation & management is also pleased, becaused they have their number or lower.

This concept is a standard negotiating tool, as has been state before, & has probably been around since management desided that workers had rights. I first saw it used in the early 70's, a month into my first full time job.

 

I honestly don't have a clue how they can resolve this. I am not buying the argument that players would suffer if their salaries were reduced. You can't tell me players wouldn't still lineup to play if the average pay was $1-2 mil a year (not sure what NFL average is now, but I imagine it's around there).

At the same point, I don't blame players for wanting a piece of the pie, regardless of what they actually need to make it worth their while.

It would seem fair to split profits, but since owners control expenses, you can't do that. The owners would be too good at hiding profits.

I think you have to do some sort of hard cap, because the earn power of the teams is just too wide. The Celtics, Lakers, Mavs of the league will always be able to out earn and thus outspend the Griz, and Hornets of the league. I'm not a fan of profit sharing either, because it's obvious some teams just aren't 'working as hard' at making a profit then others, despite their earning potential.

Just a random thought, but I would also like to see guaranteed contracts done away with, but counteract it will some sort of pension fund based on the number of seasons played in the NBA. I want to see the best players out there, not the ones who negotiated the best contracts. Teams will still honor contracts as long as the player is remotely worth that and can't be replaced with a cheaper guy. A team would still have to pay the remainder of that seasons salary, but can cut players in the offseason without a buyout.

I'd like to see the matching salary rule in trades eliminated. With a hard cap, it really isn't necessary, and will allow teams to carry out personnel strategies much easier and quicker. Rebuilding won't take nearly as long when you can trade away your good players for picks and younger players without having to take an albatross contract back.

I really don't think reducing the number of teams will be that effective. You'd eliminate some of the lower earning teams, but you're also reducing the revenue and popularity of the league in that area. I think the overall effect would be minimal for the owners, and negative for the players since there would be the same number of players fighting for fewer jobs.

Overall, I think the league has made a mess of itself with their decision to market players over teams, and the current salary structure that allowed outrageous salaries and financial holes teams can't dig themselves out of. In the real world, business can take those kind of risks and deal with them, but in a league where you need your competitors to stay in business for your own success, you have to put it rules to eliminate these risks.

 

A couple of things to consider though, Basketball is an international sport, getting close to soccer. Look at the number of Soccer leagues in the world and you'll see that unlike Basketball, where there's no question the talent drops significantly once you go outside of the NBA, there are several leagues that can claim top talent.

You are already seeing some of the top Euro players staying over there for financial reasons, or NBA quality players moving over there. Player salaries is a major barrier to entry for any competing league, and even with it as high as it is currently, you're already seeing leagues around the world catching up. If NBA lowers the salaries of the players enough, I think you'll really see some second or third tier leagues start poaching NBA level players (i.e. if you bring the league average to $1 to $2 MM-ish for good role players like Lowry or make the max-guaranteed salary a guy like Dwight Howard be 3 years $24MM).

I think another analogy would be MMA. It's a young sport right now, some what global, and the pay of the fighter is much lower. UFC is the unquestioned dominant player in the game right now, but they are constantly having to buy out/push aside competitors. It also seem that once one get beat another pops up. You buy Pride and Dream comes to take it's place, you beat Affiction and Strike Force comes in and signs Dan Henderson, legitimize itself and force UFC to buy them out. I think the fact that a top fighter in the world like Eddie Alvarez can get paid as much in a third tier promotion like Bellator as he does in UFC contributes to it.

 

Why should fixing up MSG be an NBA expense? Don't the Rangers play there also? As well as other events that take place there during the off season.

This is the type of "negative accounting" which makes one higly suspicious of the amount of "losses" the owners are complaining about in the deal the originally agreed to in the last lockout.

 

i couldn't agree more. Six year guaranteed contracts are the worst part of the current cap structure. Give players signing bonuses and non guaranteed contracts like the NFL does. If you make a bad signing you cut the player and the bonus number goes to your cap year the next year and then they are gone. A bad signing shouldn't haunt a team for half a decade.

 

So the owners have 67mil. Now suppose you have that 850 million dollar debt. so suppose your annual payments are 35 mil.

Sports teams are notorious for paying crap to their employees. Suppose the rockets had a 100 guys making on average 50k. You have executives (Coach,GM,etc.) paid 10 mil. Lets say all the other guys are making 5mil. In that cause you are still making over 10 mil a year.

 

I think we are at least a decade away from being concerned about that. I'm not sure what Euro players are opting to stay home over entering the NBA, but it certainly doesn't seem to be hurting the talent level in the NBA. As far as NBA talent going to other leagues, it's not a problem for the mid level or bench warming talent to go. What's the problem with that? We are far far away from the NBA being concerned anything but the top league in the world. Even in international competition, it's clear the NBA has the highest talent level.

As well, the NBA has shown that at least part of it's strategy for going international is to associate itself with other leagues, like NBA China. The growth of other leagues is good if it grows the popularity of the sport and the NBA can use it's brand to bring in revenue.

 

I also think we're at least a decade away, but we're definitely going that way, especially if NBA lower the cost of acquiring a top player. Lower the pay on your top players will definitely start making some of them thinking about it. Josh Childress was getting a tax free $8 MM for playing in Olympiacos.

As far as players refusing to come over, take a look at Fran Vasquez, or Rudy wanting to go back. You also have situations like Ricky Rubio where the buyout of their current clubs + contract they'd give up outweighs their NBA pay.

 

No way this goes ahead, as it would kill free agency overnight.
Most teams would be over the cap, and wouldn't be able to sign anyone, or players would be forced to accept huge paycuts, and play for nothing.

 

If they go with a hard cap period, some teams are going to have to make moves, unless they set it at 90m, which would accomplish nothing.

I agree that 45m would be the last proposal. But even in the 52-55m range, most team will be over for next season.

Obviously, either trimming salaries or a gradual decrease in the cap will have to happen.

Perhaps:

65m 2011/12
62m 2012/13
59m 2013/14

and so on until some bottom figure is agreed on.

58m

 

Meant to read this way.

 

I refer to you the last NHL CBA. "Salary Rollback"

 

Thanks for that, will look into it.

 

Um, the matching salary rule only applies to teams over the cap....with a hard cap, no one is over the cap and so....