This is insane. Triple the value? The owners are having a little get together to smoke their celebratory cigars. How does that flow through to the salary cap? Is the cap calculated as a % of the previous years income? Surely tripling the main revenue source must affect the cap value in a fairly large way.
Just did some rough calculation, which no doubt ignores some factors but I think is somewhat useful. Conclusion: If all other numbers stay more of less the same, the increase in national TV dollars from roughly $900M per year to $2.66B per year alone would cause the salary cap to be increased by $26M per team. For example, the current salary cap is $63.065M. If all the other relevant incomes and outlays stay the same when the new TV $ is applied to the formula, then the cap will be more thean $89M. Specifically, the salary cap is set by taking the league's basketball-related income (BRI), subtracting certain costs (player benefits, etc.), multiplied by 44.74% then divided by 30. Going from $900M to $2.66B would give the league roughly $1.76B in BRI. $1.76B*44.74%/30=$26.25M. So, all else being equal (which they wont be, but any change is likely to be much more gradual than the change in TV money), the extra money causes the cap to go up by roughly $26M. Now, the TV contract may not be set at a flat amount each season, but rather containing gradual increases from year to year. And the NBA and the TV companies may have additional "smoothing" mechanisms built in so that the salary cap effects do not all come in the same year, but the fact remains that this is a ton of extra money and will kick the cap numbers up dramatically one way or another.
Not at all. No. Next summer, expect a lot of 2-year contracts for players wanting to cash in the summer of 2017.
Zach Lowe (and others) reported that there may be a plan to begin phasing in the increases as early as next summer so that the salary cap jump will happen over a couple of years instead of all at the same time. So it is possible for the revenue to affect the 2015-16 season's cap numbers.
Should the players strike at this point? Because with almost all other Operating Cost staying the same (or should be), it sounds like Owners are taking a huge cut ($32MM) of the increase in revenue. Does the argument that teams are losing money (last CBA) still make sense when the average team is seeing $89MM in just TV money alone?
Either the players or the owners can opt out of the CBA after the 2016-17 season. I think there will be an opt-out and renegotiation in 2017, which may lead to another work stoppage, but I doubt that either side does anything before then. Back in 2011, the sides specifically negotiated the 2017 opt-out with the new TV deal in mind and have eyed that date as when to fight over the CBA again.
That's why all these smart business men decided to become NBA owners in the past several years. It's an incredibly lucrative investment w/ the asinine CBA terms that the NBPA agreed to taking into account the anticipated bump (turned out to be a crazy bump) to the TV contracts. These owners hosed the players, so I'd expect another work stoppage pretty soon... sucks.
I really just want to know what channels I'll be able to watch the games on. I'm in the process of signing up for cable, and I want to be sure I can watch the games. Would the NBA network cover it? Or is that only non-local games?
Just make sure your provider has NBA TV. Then you will be covered as much as possible. NBA TV blacks out games for local teams.
So each team is going to get like 100 mil just from tv deals. The Players should take notice. Why don't the networks just get together and create their own leagues and cut the owners out of the equation.
If it's the Rockets or bust, correct. But if you want some quality games each week not involving the Rockets (particularly when they aren't playing), NBA TV is very good. The last couple of years it has developed into something useful.
Yeah, I'd love to have the additional games, but obviously the Rockets are my #1 priority. So I want to be sure whatever provider I choose, they can provide that. Recently Comcast has been the only option, so hopefully that changes to give more/additional options.
I think just the opposite. Labor and management tend to get along pretty well when the pie is getting higher and everyone is making more than they did before. It's when the business plateaus or especially when it's in decline that the parties really start fighting to maximize share. No one is going to want to upset the apple cart when there is a flood of new money. Teams will be handing out some crazy contracts that offseason, so why would players want a work stoppage? There will be a negotiation, of course, and I bet it'll focus on what salaries the mid-level and other cap exceptions should carry now. Right now, they're on a schedule that goes right through 2017 without a big bump. If they don't recalibrate the schedule, the difference between the max contract (tied to the cap) and the MLE will get a lot bigger. The majority of voters in the NBPA will care a lot about how much the MLE pays.
Because the sports leagues require certain federal exemptions to function (not to mention the hundreds of logistical requirements in place)
The economics of the TV deal is huge, and players should rightfully ask to adjust the cap at a much higher number that what was initially projected. Ugh imagine having to pay stars/superstars 50-75 million per season. Not my money, but some how, we the consumer are going to feel this cost. My tickets that cost $80/game might now cost $150...I think i may just start watching games at home on TV...
http://grantland.com/the-triangle/nbas-new-tv-deal-blow-up-the-salary-cap/ Its why Morey's a smart dude...but dont think for a second that players dont want that salary increase...If the cap rises from 60mil or so up to 80mil plus, player maxes should be increased/eliminated...as Lebron James has been stating. The 2016 offseason is going to be very very interesting!!!!
