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What will the soft cap level and tax threshhold be as % of BRI?

Discussion in 'NBA Dish' started by Carl Herrera, Nov 29, 2011.

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  1. Carl Herrera

    Carl Herrera Member

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    Give that there will not a "true up" if the 10% escrow doesn't cover excess player salary, it strikes me that two critically important part of the CBA are (a) what the "soft cap" level is at, and (b) where the "luxury tax threshhold" is at.

    The soft cap and luxury tax level will determine how likely it is for teams to splurge to such an extent that the 10% escrow plus a 1% BRI "retired player program" money which can be raided become insufficient as a remedy if owners go wild on contracts.


    For example, under the prior CBA, the soft cap was at 51% and the tax level is at 61% of projected BRI. If the levels going forward are the same, I find it a bit hard to believe that the 10% escrow (plus 1% retired programs money) are guaranteed to be enough to hold player share of the BRI to within the 49% to 51% "band" which we've heard much about.

    If the nominal salary one season ends up being, say, 59% of BRI (not that far fetched since most teams spend between the soft cap level and the tax level, and a few will still go above the tax level). 10% escrow of that would equal to 5.9% of BRI. Even if you remove this 5.9% BRI from the escrow and the 1% retired player programs money, 59% minus 5.9% minus 1% equals to 52.1%. This means that the player share of the salary will exceed the 49 to 51% band to which the party agreed.

    It would seem that they'd have to move these 51% and 61% down a bit in order to be sure that the 10% will be sufficient.


    Yet, we have heard almost nothing about these numbers other than that they'll end up roughly at the same place ($58 mil and $70 mil) this coming year as they were last year. I imagine that these will be defined as a % of BRI as they were under the last CBA. Seems strange we don't know the numbers yet-- and we've heard everything else about the new CBA (the exceptions, contract length, increases, amnesty, etc.).

    If they really are close to the 51%/61% number as they were before, it might mean that the players have stealthily negotiated for a higher % of the BRI than the 49 to 51% band we hear about.


    [Bimathug: Have you heard anything?]
     
  2. valorita

    valorita Member

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    Conceptually, it would make sense that with a lower BRI, the cap should also go down a bit. However, I'm not certain of all the implications. I get your drift though...

    I think that would severely restrict player movement in the form of free agency.
     
  3. Geaux Rockets

    Geaux Rockets Member

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    As best as I can tell, the cap and tax levels are going to stay at the 51% and 61% they were at under the previous CBA. Sounds like they're counting on the increasing luxury tax levels to temper down total spending and expect the 10% escrow to be able to make up the difference. If I recall correctly, last year with the softer tax rules they still only ended up paying out a little over 56% to the players, and that should only go down under the new rules, unless Im underestimiating the impact of raising the cap floor. But it does look like the owners going to fully rely on the escrow system to get the players' cut down to 49% and if it (plus taking from the benefits) doesn't cover it, the owners are SOL.

    Strange, though, certainly seems like adjusting the cap level and tax level would make more sense.
     

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