The Lockout has arrived.

[RookieOfTheDay]

Fact is, the 2002 Kings era is gone. MSE will not be spending that kind of $$$ anytime soon. I would rather Sacramento be on even footing with other cities financially than being outspent every year. We may lose some players, but, then again, so will everyone else. A hard cap and revenue sharing would do wonders to make smaller market teams not so dependent on luck (winning the lottery - Cleveland, San Antonio, Seattle/OKC, etc.) to be able to be competitive. We were lucky MSE had the cash to spend earlier. That isn't the case anymore. And I don't think we can rely on it in the future.

It always comes down to luck, even with the big spenders. Look at the teams like the Magic, Knicks, Hawks, Trailblazers, and until this year, Mavericks that have been over the cap for years and still weren't serious contenders. Spending big is far from a guarantee that you'll be a championship contender. But when you're a team that's right on the cusp of being a serious contender and just need that one piece to put you over the top, that's when a hard cap is your worst enemy. Basically the way I see it is, if you're too cheap or can't afford to spend what it takes to compete with the best, then you don't deserve to win and shouldn't own a team in the first place.

 

[Bricklayer]

Yeah when it comes time to resign all of this talent the Kings are stockpiling a few years down the road and they can't do it because of a hard cap, that's going to be a big help.

I'm actually of this camp. I think taking away the soft cap has the potential to kill us in a few years. I am 100% certain this team is on the way up...under the old system, Its built very well to utilize the old system's rules. But if they change the rules on us, then all of a sudden we lose the edge we've spent 4 years acquiring. For a young team with guys on rookie contracts it almost means you can't sign anybody at all until your elite talents (Reke/Cousins) resign, because there is no way you risk losing them because of a hard cap.

 

[Warhawk]

It always comes down to luck, even with the big spenders. Look at the teams like the Magic, Knicks, Hawks, Trailblazers, and until this year, Mavericks that have been over the cap for years and still weren't serious contenders. Spending big is far from a guarantee that you'll be a championship contender. But when you're a team that's right on the cusp of being a serious contender and just need that one piece to put you over the top, that's when a hard cap is your worst enemy. Basically the way I see it is, if you're too cheap or can't afford to spend what it takes to compete with the best, then you don't deserve to win and shouldn't own a team in the first place.

OK, but Sacramento will NEVER be able to spend with the New Yorks, LAs, or Chicagos. Just won't. So you would be effectively permanently handicapping us by keeping the existing system in place. Leveling the $$$ playing field would work to our benefit when you have a good drafter like Petrie and other teams can't just outspend you every year.

 

[RookieOfTheDay]

OK, but Sacramento will NEVER be able to spend with the New Yorks, LAs, or Chicagos. Just won't. So you would be effectively permanently handicapping us by keeping the existing system in place. Leveling the $$$ playing field would work to our benefit when you have a good drafter like Petrie and other teams can't just outspend you every year.

You don't have to spend 90 million to compete though. You just have to draft well and make good decisions and you can compete at or slightly over the current soft cap. At the very least there has to something like Bird rights to allow teams to exceed the cap to resign their own players. Otherwise it will just kill teams like the Kings who have a lot of great young talent when it comes time to resign them all.

 

[pdxKingsFan]

I guess now would be the time where I make the suggestion I've been thinking about to the hard cap: Bird Exception SOLELY for players drafted by a club. Or maybe just don't count a player against the cap for as long as he plays on the team that drafted him.

 

[RookieOfTheDay]

I guess now would be the time where I make the suggestion I've been thinking about to the hard cap: Bird Exception SOLELY for players drafted by a club. Or maybe just don't count a player against the cap for as long as he plays on the team that drafted him.

Either of those suggestions would be reasonable. There has to be some exception because NBA teams just can't flourish long term under a strict hard-cap. It's not fair that teams like the Kings that spend years drafting well then not be allowed to retain those players long term due to spending restrictions.

 

[Section 101]

You don't have to spend 90 million to compete though. You just have to draft well and make good decisions and you can compete at or slightly over the current soft cap. At the very least there has to something like Bird rights to allow teams to exceed the cap to resign their own players. Otherwise it will just kill teams like the Kings who have a lot of great young talent when it comes time to resign them all.

Except any new system will put the drafting team in better position to keep the players with longer deals and more money.

 

[Section 101]

I guess now would be the time where I make the suggestion I've been thinking about to the hard cap: Bird Exception SOLELY for players drafted by a club. Or maybe just don't count a player against the cap for as long as he plays on the team that drafted him.

Said that months ago !

 

[ParniValjak]

I'm actually of this camp. I think taking away the soft cap has the potential to kill us in a few years. I am 100% certain this team is on the way up...under the old syste, Its built very well to utilize the o;d system's rules. But if they change the rules on us, then all of a sudden we lose the edge we've spent 4 years acquiring. For a young team with guys on rookie contracts it almost means you can't sign anybody at all until your elite talents (Reke/Cousins) resign, because there is no way you risk losing them because of a hard cap.

I tend to agree with this. However, surely if they bring in the hard cap the will cap the maximum salaries as well so you don't get in a situation where another team can offer $10million as opposed to your $8million. If the hard cap is set, then the maximum salary structure should be set as well. You simple can't have hard salary cap set at $45 million but maximum salary set at $20 million. It just can't work. Maximum salaries will need to be scaled according to the cap. That should eliminate losing players like Cousins and Reke but the lesser players like Thornton, Hickson, JT, Jimmer etc... thats another story.

 

[RookieOfTheDay]

I tend to agree with this. However, surely if they bring in the hard cap the will cap the maximum salaries as well so you don't get in a situation where another team can offer $10million as opposed to your $8million. If the hard cap is set, then the maximum salary structure should be set as well. You simple can't have hard salary cap set at $45 million but maximum salary set at $20 million. It just can't work. Maximum salaries will need to be scaled according to the cap. That should eliminate losing players like Cousins and Reke but the lesser players like Thornton, Hickson, JT, Jimmer etc... thats another story.

And that's the crux of the problem right there. Those lesser players can be the difference between a 500 team and a 50+ win team and title contender.

 

[hrdboild]

I snipped this because really it all does boil down to profit and risk and with the exception of LA how many teams are really making more than they did 5 years ago? We know that many teams' revenues are down over the past few years. So the next contract players are going to have to suck it up.

As for players providing the product, the same can often be said for the low-level workers in any corporation, except that the players if they all took a 25% pay cut across the board tomorrow would all still be living lifestyles most of us only dream of. On the flip side if the league or their team loses money five years in a row the players will still get paid. If they can do it all they can start their own league. The NHL players thought about that for about 5 minutes too.

Again, this is precisely my point. Even the CFO of the NBA herself admits that overall league revenue is at an all-time high. So if 22 out of 30 teams lost money last year that means one of two things: (1) The remaining 8 teams are making money hand over fist, in which case revenue sharing should be sufficient to bring the majority of the league back into financial solvency or (2) A lot of those 22 teams are lying about how much money they lost last year.

Those struggling small market teams may be the ones writing the actual paychecks, but the players are employees of the league itself, not just one individual franchise. Their image is marketed worldwide under the umbrella of the NBA. The numbers say the league is as profitable as it's ever been. So how can the owners justify asking the players to take a pay cut? There's no empirical justification for them to make that demand.

And if revenue continues to go up in the future (as it did this season) are the owners going to then re-negotiate a larger share of the revenue to give back to the players? Of course not. At least not until this CBA expires. So basically the owners are asking the players to pick up the tab this time with no guarantee that they won't do it again the next time the CBA comes up for renewal. There's no such thing as good faith when it comes to union negotiations. The more the players give up now the more they're setting themselves to give up in the future.

 

[pdxKingsFan]

Look, I'm a union worker and no damn well about good faith and how every give back you allow is gone forever, but again we are talking about multi-million dollar guaranteed contracts here and not middle class workers fighting to save their health care and retirement benefits because management can pretend that if they cut those it isn't "cutting pay". These guys are overpaid.

As for league revenue being at an all time high what good is that if expenses outpace revenue growth? The last few CBAs have been highly rigged towards the average pay skyrocketing. The owners sought to curtail superstars asking for 100 million dollar deals and the result was the "maximum" contract. Which meant every B+ level player now demanded precisely that and usually got it. Some were even smart enough to fire their agents so they didn't have to share a percentage of this new fixed amount with anyone else. So most teams lived at the cap and then signed C+ level talent to full MLE extensions every two years. This was stupid but that became the way to play the game under the current rules if you were a playoff level team.

 

[Superman]

The players get 57% if BRI (basketball related income). Whether that is via contracts or contracts + other revenue.

So to make the numbers easy lets say the 57% of BRI is $2 billion. The players get that $2 billion not more not less. So if the contracts were all $1 mil per player at 15 players per team x 30 teams thats $450 million. So the 450 players would then split the $1.55 billion and get $3.44 million over their $1 mil contract.

Right now the players pay a % of their check into an escrow account. At the end of the year the contracts are added to determine what % of BRI they add up. If the % is less than 57% they get the money from the escrow account until it equals 57%. If the players are below 57% the owners pay the players the difference.

From Larry coons twitter

I forgot about the player escrows. You're right.

However, there's going to be a donut hole for this season, somewhere around $150 million (if I understand correctly). Who pays that back to the owners?

 

[Section 101]

I forgot about the player escrows. You're right.

However, there's going to be a donut hole for this season, somewhere around $150 million (if I understand correctly). Who pays that back to the owners?

57% of 0 BRI = 0

 

[Superman]

There needs to be some change, agreed. Probably even big changes. But that doesn't mean the players should have to pay for the owners inability to police themselves. From what I've read about the negotiations, the players are willing to make whatever concessions are needed to arrive at a functioning system, within reason. Asking for a 33% reduction in player salary, or whatever that number is, is not reasonable.

One could argue that point on the basis that players are being paid and contracted to more money than the current CBA allows for in total compensation. The owners are suggesting a $62 million firm cap (not a true hard cap), which is actually more than current compensation allows for.

What the owners need to get sorted out is a way to ensure that the league doesn't become 10 profitable big market teams which are competing for the championship and then 20 perennial also-rans struggling to get by. I think Billy Hunter was right that revenue sharing is a bigger problem in terms of economic viability for most teams than player salaries. Media markets are dictating profits now and there's no way to get the Sacramentos of the league into the same ballpark as the Los Angeleses without a more expanded form of revenue sharing. If the owners can sort that out among themselves there wouldn't be a need for a lockout in the first place. Obviously that's not in the best interest of the few teams who are making a killing under the current system so they're going to deflect responsibility onto the players for as long as they can get away with it.

I don't really agree. I think that if the Lakers can secure a $3 billion TV deal for themselves, then they should be allowed to do so. You don't need to share that money in order to level the playing field. All you need to do is more aggressively restrict the amount of money the Lakers can spend on player compensation. With a hard cap, you can let the Lakers have their mega TV deals, but you don't let them go $30 million over the cap, and extend their best players with $60 and $80 million deals, and make trades to absorb more salaries, and give them signing exceptions.

The league is already set up for revenue sharing. I mentioned gate receipts earlier, and there are other forms of revenue sharing that are used now. The system could be bolstered, for sure. But I don't think they need to go as far as the NFL has gone, with league-wide TV and merchandising contracts, etc. These are the aspects that have opened the NFL up to significant anti-trust scrutiny, not just from the players, but also from business partners (see American Needle vs. NFL, in which the Supreme Court has ruled that the NFL does not have broad anti-trust exemption).

 

[T-Time]

Whatever happens, the new CBA needs to restrict players from trying to stack teams like they are now because that will cause teams to lose money and it eventually will lead to the dissolving of franchises, something I as a fan, do not want to witness. This league financially operates on star power for many teams and thats just how it is. Look at Cleveland for how much of a difference 1 star player can make in the success of their team and their financial situation in general. I know it has been thrown around in the past but the implementation of a "Star Player Tag" or franchise tag like the NFL I think would benefit all teams because it shows the players that the owners hold the cards and won't just let players destroy a franchise in one off season like Lebron did to the Cavs and form super teams. I realize teams can recover after something like that happens, Cavs getting the 1 and 4 pick (hmm weird how that happened), but it takes time and the whole economy of that city felt the wrath of Lebron leaving not just the economy of the Cavs franchise in general.

 

[Superman]

I'm actually of this camp. I think taking away the soft cap has the potential to kill us in a few years. I am 100% certain this team is on the way up...under the old system, Its built very well to utilize the old system's rules. But if they change the rules on us, then all of a sudden we lose the edge we've spent 4 years acquiring. For a young team with guys on rookie contracts it almost means you can't sign anybody at all until your elite talents (Reke/Cousins) resign, because there is no way you risk losing them because of a hard cap.

I think the true hard cap is off the table. But even if it weren't, a hard cap doesn't necessarily mean you lose your young players.

What a hard cap would do over the next two years, before we have to worry about Evans and Cousins, is start a market correction. If they set a hard cap at $62 million, which is the owner-proposed figure, eight teams would have to make cuts in order to get under the cap (unless there's some grandfathering and/or exemptions*). All eight of those teams were in the playoffs last year, including both Finals participants. Dallas would have no shot at resigning Tyson Chandler. The Lakers would be broken up (their four best players are on the books for $68 million next year). The Heat would be severely restricted, and probably completely unable to make a run at a player like Dalembert.

Players like Antawn Jamison, Rip Hamilton, Gilbert Arenas, Chauncey Billups, etc. would likely be released, and have to resign and much more modest contracts. Mid level players making $5-8 million a year would also have to address their contracts one way or the other. The average contract length and value will have significantly decreased by the time we have to ink our guys. There will be new comps on the market. Derrick Rose and Russell Westbrook will be going a year before Evans. Blake Griffin goes a year before Cousins.

We do lose the edge we've been building, wherein we can take on salary now while we're under to cap, then go over the cap to keep our guys.

*One simple exemption they could make would be to allow teams to make whatever cuts they need to reduce their payroll to as low as 80% of the new cap, with no rights to resign those players. The money is still owed to the players, but is not counted against the cap. And if a team has to cut more than two players to get under the cap, they get compensatory draft picks at the end of the first round. This is a one-time provision, like a beefed-up amnesty clause.

 

[Superman]

Whatever happens, the new CBA needs to restrict players from trying to stack teams like they are now because that will cause teams to lose money and it eventually will lead to the dissolving of franchises, something I as a fan, do not want to witness. This league financially operates on star power for many teams and thats just how it is. Look at Cleveland for how much of a difference 1 star player can make in the success of their team and their financial situation in general. I know it has been thrown around in the past but the implementation of a "Star Player Tag" or franchise tag like the NFL I think would benefit all teams because it shows the players that the owners hold the cards and won't just let players destroy a franchise in one off season like Lebron did to the Cavs and form super teams. I realize teams can recover after something like that happens, Cavs getting the 1 and 4 pick (hmm weird how that happened), but it takes time and the whole economy of that city felt the wrath of Lebron leaving not just the economy of the Cavs franchise in general.

This has been going on for years. The Lakers form a "super team" every decade.

 

[Warhawk]

And that's the crux of the problem right there. Those lesser players can be the difference between a 500 team and a 50+ win team and title contender.

You seem to think the Kings would be the only team affected by this. Why is that?

And a hard cap would really crimp these huge contracts for players that don't deserve it. Players and teams would be forced into not throwing gobs of $$$ at players unless they truly are the best in the league.

 

[T-Time]

Exactly and part of the reason aside from the fact they can pay more than any other team in the league is because players want to play there because of the market it's in. The players have too much leverage right now and it needs to be controlled.

 

[RookieOfTheDay]

You seem to think the Kings would be the only team affected by this. Why is that?

What would lead you to conclude that I think that?

And a hard cap would really crimp these huge contracts for players that don't deserve it.

So would wiser spending. Don’t overpay players in the first place.

Players and teams would be forced into not throwing gobs of $$$ at players unless they truly are the best in the league.

Yeah I understand how it works, I just don’t agree that it’s necessary or that the NBA will be better because of it. On principle, I tend to support free market/enterprise and the NBA is no exception to that.

 

[Superman]

So would wiser spending. Don't overpay players in the first place.

That ship has sailed, that song has been sung... It doesn't work. You need restrictions.

Yeah I understand how it works, I just don't agree that it's necessary or that the NBA will be better because of it. On principle, I tend to support free market/enterprise and the NBA is no exception to that.

But do you believe the NBA is better because of the salary cap and restrictions that are already in place? If so, your free market argument is already neutered, so to speak. The NBA is not a free enterprise industry, and hasn't been for many years now. We're talking about more restrictions, sure, but this isn't about principles that already have been broached by the NBA's business model.

 

[kennadog]

On principle, I tend to support free market/enterprise and the NBA is no exception to that.

Well, if we ever get a true "free" market in the US, it'll be intersting to see if that actually works.

Don't forget that most professional sports are paying those ridiculously high salaries to players that play in stadiums and arenas that are largely paid for with public dollars. We probably would have no professional sports, if owners all had to pay the costs themselves. Makes most pro sports teams publicly-susidized businesses because government funding is cheaper than private financing. This is also a disadvantage to smaller cities, that don't have the resources of bigger urban areas.

I actually want Sacramento build and own an arena here, but it would be nice if the owners could pay less to their players and more toward the building they will or are playing in.

 

[RookieOfTheDay]

That ship has sailed, that song has been sung... It doesn't work. You need restrictions.



But do you believe the NBA is better because of the salary cap and restrictions that are already in place? If so, your free market argument is already neutered, so to speak. The NBA is not a free enterprise industry, and hasn't been for many years now. We're talking about more restrictions, sure, but this isn't about principles that already have been broached by the NBA's business model.

No I do not believe it's better. Ideally, I think there should be no restrictions on spending. Nice try at "nuetring" my argument but you'll have to do better than that to catch me in a contradiction.

 

[RookieOfTheDay]

Well, if we ever get a true "free" market in the US, it'll be intersting to see if that actually works.

Don't forget that most professional sports are paying those ridiculously high salaries to players that play in stadiums and arenas that are largely paid for with public dollars. We probably would have no professional sports, if owners all had to pay the costs themselves. Makes most pro sports teams publicly-susidized businesses because government funding is cheaper than private financing. This is also a disadvantage to smaller cities, that don't have the resources of bigger urban areas.

I actually want Sacramento build and own an arena here, but it would be nice if the owners could pay less to their players and more toward the building they will or are playing in.

I'm not going to get into a debate about what constitutes a "true" free market or if such a thing even exists. My philosophy is simply the less restrictions on spending, the better.

 

[hrdboild]

Look, I'm a union worker and no damn well about good faith and how every give back you allow is gone forever, but again we are talking about multi-million dollar guaranteed contracts here and not middle class workers fighting to save their health care and retirement benefits because management can pretend that if they cut those it isn't "cutting pay". These guys are overpaid.

Well then let me put it this way: The NBA is an entertainment business. Let's say you're a singer, a very popular one. So popular in fact that your CD sales, merchandise, and concert revenue totals a billion dollars a year. Out of that billion dollars your record company takes $400 million off the top. Then you have to pay concert promoters, event staff, agent, producer, taxes, etc. So at the end of the day you end up making $20 million out of a possible $1 billion. It's your name on the marquee, you singing on the album. Ostensibly you are the product which is generating a billion dollars. So are you overpaid at $20 million?

By any objective standard the contracts NBA players make are absurd, but if you compare them to the overall revenue it's not absurd in context. It's a worldwide business that reaches a lot of people. You're arguing that the players have no right to ask for fair compensation because they make so much more than the rest of us. But what right then do the owners have to ask for a bigger slice of the pie? If the current system isn't working for the majority of the league and forcing them to outspend their means it's because the few teams who are making a profit are able to set the competitive standard that much higher by overpaying to acquire the best players. Again, that's a big-market/small-market issue. If small market teams are forced to go into debt to remain competitive than the league needs to correct for that. But that shouldn't mean the players have to take a pay cut. They have the right to receive market-value payment for their services just like anyone else.

Unfortunately for the owners they can't outsource those jobs to other countries with less restrictive labor laws like every other American business. The players in the NBA are the best in the world. That's what everyone pays to see. That's why they should get a fair share of the revenue.

 

[Superman]

No I do not believe it's better. Ideally, I think there should be no restrictions on spending. Nice try at "nuetring" my argument but you'll have to do better than that to catch me in a contradiction.

I wasn't trying to catch you. I assumed that you would agree that the NBA is better off with spending restrictions than it would be were there none. I guess you'd rather have an MLB-style system of haves and have-nots in which the big market franchises dominate the small markets, which is ironic since you're a Kings fan.

You're entitled to your viewpoint, I just don't see how you can argue that the NBA isn't better off with spending restrictions.

 

[Superman]

Well then let me put it this way: The NBA is an entertainment business. Let's say you're a singer, a very popular one. So popular in fact that your CD sales, merchandise, and concert revenue totals a billion dollars a year. Out of that billion dollars your record company takes $400 million off the top. Then you have to pay concert promoters, event staff, agent, producer, taxes, etc. So at the end of the day you end up making $20 million out of a possible $1 billion. It's your name on the marquee, you singing on the album. Ostensibly you are the product which is generating a billion dollars. So are you overpaid at $20 million?

By any objective standard the contracts NBA players make are absurd, but if you compare them to the overall revenue it's not absurd in context. It's a worldwide business that reaches a lot of people. You're arguing that the players have no right to ask for fair compensation because they make so much more than the rest of us. But what right then do the owners have to ask for a bigger slice of the pie? If the current system isn't working for the majority of the league and forcing them to outspend their means it's because the few teams who are making a profit are able to set the competitive standard that much higher by overpaying to acquire the best players. Again, that's a big-market/small-market issue. If small market teams are forced to go into debt to remain competitive than the league needs to correct for that. But that shouldn't mean the players have to take a pay cut. They have the right to receive market-value payment for their services just like anyone else.

Unfortunately for the owners they can't outsource those jobs to other countries with less restrictive labor laws like every other American business. The players in the NBA are the best in the world. That's what everyone pays to see. That's why they should get a fair share of the revenue.

This is true. Unlike your typical union worker (no offense to any union workers), the NBA labor pool is not replaceable, at least not as readily as your ordinary union pool is.

None of this means that NBA players aren't paid too much. I think it's obvious that they are.

 

[pdxKingsFan]

The players assume none of the risk. If they want to form their own league, do their own marketing, own their own buildings, manage or contract out operations, etc than they can take whatever cut they want. Players don't take a salary hit when ticket sales go down or their teams suck or when they personally can't even perform their jobs any more. Right now all that risk is on the owners which is why the owners are entitled to take back.

You seem to have major issues differentiating revenues from profits. In your music star example: The musician is not the employee as players are, the musician is THE BUSINESS. The musician brought in 1 billion in sales but had 980 million in expenses leaving a 20 million dollar profit, which he then pays himself. If music star only makes 500 million the next year he loses 480 million after he pays out. Which is actually what happens to many, many people in that industry (on a much smaller scale). Next time an NBA player takes a loss we'll talk.

 

[Warhawk]

What would lead you to conclude that I think that?

Because every response from you is how this would affect the Kings only. News flash, EVERYONE would be in danger of losing their "lesser" players. That would be the incentive by teams to cut salaries for most players to reasonable levels and enable you to keep the players you have. And the players, with only a limited pool of money to draw from, would have to be reasonable in their demands in order to keep playing. Otherwise they risk being an overpaid player on a perennially losing team, or, worse, out of the league like Bonzi. The team that manages their $$$ wisely would have an even chance at being competitive. And that is more than we can claim right now.