Is it too soon to talk about the implications of the salary cap possibly jumping up to $91 million in 2016?
NBA's new $24 billion TV deal
NBA's new $24 billion TV deal
Could salary cap take huge jump in 2016? (split)
- Thread starter hrdboild
- Start date
So who should get the money? The team owners? Essentially players just take a chunk of league revenues. The superstars that are true superstars get max deals and then huge endorsement contracts on top of that. Do you raise the floor so that fringe players make FU money? Or do you just give everyone a bump at the current level?
Everyone's contracts are going to go up. That happens organically anyway, it's just that it's usually been a slow incremental process. What's different about this next CBA is that the new TV deal is so big that league revenue is going to get a huge spike at the start of the 2016-2017 season (technically at the end of the season, but the projected salary cap should go up at the start of the season and teams will be spending accordingly). If I'm a free agent right now, I'm weighing the benefit of a long-term deal (guaranteed money, injury risk mitigation) with the benefit of a short-term deal that expires just as the salary cap is set to go up for every team in the league. Unless there's a compelling reason to sign that long-term deal now, I'm going to make damn sure I'm a free agent in 2016 when the spending bonanza begins.
I don't know that the league could handle a one season spending spree of this magnitude though. The whole point of the last CBA (besides bailing out owners who made poor investments by cutting into the players' percentage) was to more severely enforce the cap restrictions so that teams with less innate market appeal could theoretically have a better shot at signing free agents. A by-product of this is that teams with seemingly unlimited budgets (New York) couldn't dig themselves into a huge Isiah Thomas sized hole anymore. Whether this was successful or not depends on your point of view. Miami was able to take advantage of this "increased parity" to write their own ticket to the last 4 NBA Finals. Attempts to replicate that success elsewhere though ranged from miserable failure (New York, Brooklyn, LA Lakers) to partial success (LA Clippers and Houston still haven't been able to get that third amigo but they are solid playoff teams). With Lebron returning to Cleveland, the era of the super team appears to be over. But opening the flood gates all at once could undo what all the small market teams fought for in 2011.
The current CBA is set to expire in 2022 but either side can opt out and renegotiate in 2017, which it seems inevitable the players will decide to do. Why? In 2011 they agreed to cut their share of revenue drastically from 57% to 49-51% (it varies year to year based on certain conditions). It's always difficult for the players to frame their side of the argument in a way that is acceptable to joe blow sports fan, but the reality of the situation is that every sports league shares a substantial portion of it's profits with the players. The NFL guarantees 47% of league revenue to the players though 53 player rosters per team, and 32 teams, spreads the money out over a much larger player base. Baseball has no enforced revenue split, relying on free agency to drive player salaries. The result is a huge gap between the star players (getting 20-30 million a year) and rookie scale players making less than a million. MLB also has 25 players per team plus extensive minor leagues both overseas and domestic which extend the "unofficial" roster size to something like 200 players per team. That's a lot of players. 16 of those 30 teams had payrolls exceeding $100 million last year with the Dodgers and Yankees spending in excess of $200 million -- and that only accounts for the 25 man major league roster. I don't know how to work out the salary split there, but common sense says it's got to be at least 50%.
The NBA, in contrast, has only 15 players per team so the value any one player provides is magnified. A case could be made that exclusivity gives the owners a right to keep player salaries lower (roster spot supply is incredibly low so the pool of potential talent vying for those few spots is theoretically enormous). On the other hand, a contrary case could be made that the players' ownership stake in the league is increased. Jordan won 6 titles, Kobe has won 5, Kareem won 6, Bill Russell won 11. Basketball is a team game that can be dominated by individual talent. No D-League call up is going to replace an All-Star player.
This hints at one possible solution -- remove the limit on max contracts and let the owners go crazy outspending each other. I don't think that's going to happen though. The Players Association has a very vocal contingent of elite talent, but it doesn't benefit the bulk of the players to see the lion's share of that increased revenue swallowed up by the top 5%. I'd expect to see minimum contracts go up and perhaps salary restructuring to allow for more significant performance bonuses and maybe even signing bonuses. I think what the owners want most of all is protection from investing guaranteed money on players who either get injured or fail to perform. We saw that already in the last CBA with contracts being limited to 4 or 5 years. And I would agree that was a step in the right direction. I think the owners might be willing to accept a slight bump in the revenue split this time if they can continue to enjoy restrictions on max deals that allow them to compete in free agency without committing to potentially crippling bad contracts that go on forever.
Which is all a very long-winded way of saying that the salary cap is going to go up, probably a whole lot, over the length of this next TV deal. The only question is how much it will go hope and how soon. And the way to take advantage of the situation, I think, is not to clear out cap space for 2016-2017 when every team in the league is going to have money to spend, but rather to look for players who'll commit to long term deals right now and lock in our core players for the next 4 or 5 years on below-market contracts.
I don't know that the league could handle a one season spending spree of this magnitude though. The whole point of the last CBA (besides bailing out owners who made poor investments by cutting into the players' percentage) was to more severely enforce the cap restrictions so that teams with less innate market appeal could theoretically have a better shot at signing free agents. A by-product of this is that teams with seemingly unlimited budgets (New York) couldn't dig themselves into a huge Isiah Thomas sized hole anymore. Whether this was successful or not depends on your point of view. Miami was able to take advantage of this "increased parity" to write their own ticket to the last 4 NBA Finals. Attempts to replicate that success elsewhere though ranged from miserable failure (New York, Brooklyn, LA Lakers) to partial success (LA Clippers and Houston still haven't been able to get that third amigo but they are solid playoff teams). With Lebron returning to Cleveland, the era of the super team appears to be over. But opening the flood gates all at once could undo what all the small market teams fought for in 2011.
The current CBA is set to expire in 2022 but either side can opt out and renegotiate in 2017, which it seems inevitable the players will decide to do. Why? In 2011 they agreed to cut their share of revenue drastically from 57% to 49-51% (it varies year to year based on certain conditions). It's always difficult for the players to frame their side of the argument in a way that is acceptable to joe blow sports fan, but the reality of the situation is that every sports league shares a substantial portion of it's profits with the players. The NFL guarantees 47% of league revenue to the players though 53 player rosters per team, and 32 teams, spreads the money out over a much larger player base. Baseball has no enforced revenue split, relying on free agency to drive player salaries. The result is a huge gap between the star players (getting 20-30 million a year) and rookie scale players making less than a million. MLB also has 25 players per team plus extensive minor leagues both overseas and domestic which extend the "unofficial" roster size to something like 200 players per team. That's a lot of players. 16 of those 30 teams had payrolls exceeding $100 million last year with the Dodgers and Yankees spending in excess of $200 million -- and that only accounts for the 25 man major league roster. I don't know how to work out the salary split there, but common sense says it's got to be at least 50%.
The NBA, in contrast, has only 15 players per team so the value any one player provides is magnified. A case could be made that exclusivity gives the owners a right to keep player salaries lower (roster spot supply is incredibly low so the pool of potential talent vying for those few spots is theoretically enormous). On the other hand, a contrary case could be made that the players' ownership stake in the league is increased. Jordan won 6 titles, Kobe has won 5, Kareem won 6, Bill Russell won 11. Basketball is a team game that can be dominated by individual talent. No D-League call up is going to replace an All-Star player.
This hints at one possible solution -- remove the limit on max contracts and let the owners go crazy outspending each other. I don't think that's going to happen though. The Players Association has a very vocal contingent of elite talent, but it doesn't benefit the bulk of the players to see the lion's share of that increased revenue swallowed up by the top 5%. I'd expect to see minimum contracts go up and perhaps salary restructuring to allow for more significant performance bonuses and maybe even signing bonuses. I think what the owners want most of all is protection from investing guaranteed money on players who either get injured or fail to perform. We saw that already in the last CBA with contracts being limited to 4 or 5 years. And I would agree that was a step in the right direction. I think the owners might be willing to accept a slight bump in the revenue split this time if they can continue to enjoy restrictions on max deals that allow them to compete in free agency without committing to potentially crippling bad contracts that go on forever.
Which is all a very long-winded way of saying that the salary cap is going to go up, probably a whole lot, over the length of this next TV deal. The only question is how much it will go hope and how soon. And the way to take advantage of the situation, I think, is not to clear out cap space for 2016-2017 when every team in the league is going to have money to spend, but rather to look for players who'll commit to long term deals right now and lock in our core players for the next 4 or 5 years on below-market contracts.
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Bricklayer
Don't Make Me Use The Bat
Means we actually may end up having a cheap Boogie comparatively because he was signed under the old TV deal. Actually cheapens up all those long term bad contracts, which is why it was reported that JT's deal was not being considered as toxic around the league as it once was.
Henkel
Starter
Here's a rough projection of what the cap could look like in the coming years.
http://probasketballtalk.nbcsports....-salary-caps-under-new-national-tv-contracts/
http://probasketballtalk.nbcsports....-salary-caps-under-new-national-tv-contracts/
bajaden
Hall of Famer
Both Gay and Cousins contracts run through the 2017/18 season. The very season the new TV contract begins. As pointed out in one of the articles, either side has the ability to opt out of the new CBA in 2017, and I can assure you that the players union will do just that. So prepare yourself for a lockout the summer following the 2016/17 season. Gay has an opt out following that same season, and no predictions on that one. Whether Gay opts out or not, its likely that both he and Cousins will be looking at some big bucks in their next contract, depending on what the new CBA agreement says.
From the owners point of view, yes, its about money, but its also about sharing the wealth, and in that regard, I'm not talking about money. I'm talking about talent. The idea was to make it more difficult for cities like Los Angeles and New York, cities with huge TV contracts of their own, to spend their way to a championship by acquiring all the top talent. The players union is only interested in getting the players as much money as possible, and acquiring as much freedom of movement as possible. Both sides have fair arguments. Of course, we as fans don't really care that much about the details. We just want our team to be competitive, and to be on the basketball court, as opposed to a legal court. In many ways I'm looking forward to the the 2017/18 season, and in many ways I'm not. There may not be a 2017/18 season.
From the owners point of view, yes, its about money, but its also about sharing the wealth, and in that regard, I'm not talking about money. I'm talking about talent. The idea was to make it more difficult for cities like Los Angeles and New York, cities with huge TV contracts of their own, to spend their way to a championship by acquiring all the top talent. The players union is only interested in getting the players as much money as possible, and acquiring as much freedom of movement as possible. Both sides have fair arguments. Of course, we as fans don't really care that much about the details. We just want our team to be competitive, and to be on the basketball court, as opposed to a legal court. In many ways I'm looking forward to the the 2017/18 season, and in many ways I'm not. There may not be a 2017/18 season.
CruzDude
Senior Member sharing a brew with bajaden
Seems I read that some 50-60% of NBA players are all but broke within 5 years of retiring or leaving the NBA. Sounds about right from sad stories I keep reading. I think the NBPA should address that issue first and come up with a plan to insure the players can provide for themselves and their dependents 10, 20, 30 years after leaving the NBA. Some players are poster-men examples of how to do it right. Others just keep partying 'cause there still in their 20's or early 30's with all that money and supporting their "entourage". Look back at what the partying we did without all that money coming in!!
I think there will be a lockout that will end with a Hard Cap for every team.
I think there will be a lockout that will end with a Hard Cap for every team.
The players have very staunchly opposed a hard cap, and with the new TV deal making bank for the league, I don't see that happening. I'm actually of the mindset that a lot of the very hard-fought BRI gains that the NBA made in the last CBA were specifically intended as precursor moves for BRI concessions at this next CBA negotiation. Basically, as soon as the NBA signs a blockbuster TV deal, the players are going to insist on a bigger piece of the pie. There's no way around that. But if you get their share down ahead of time, you can eventually concede some back in the next negotiation and still have it be a net positive.
My guess, and it's purely a gut guess based on long-term observations, is that the NBA will concede several percent of BRI at the next negotiation and in exchange will insist on a two-and-done rule (rather than one-and-done, which the players have staunchly opposed changing). I think it's funny because the rule for which players are draft eligible has absolutely zero effect on the players currently in the union, and making players go to college longer would actually guarantee jobs for the lesser guys in the union for just a tiny bit longer. But I think that the players union knows that the NBA wants that change very badly and so they take the hardline stance not because they care, but because they hope to get something out of that hardline stance. So I'm predicting that the players will get several percent of BRI and the NBA will get two-and-done and both sides will think they won.
One-year deals for EVERYBODY!
Section 101
All-Star
People are misunderstanding the smoothing. The owners want to limit the max contracts and have the max increase over a set number of years. The amount of money the players receive is will still be the same with or without the smoothing. They get a set % of BRI. So what will happen is the max level players will get bigger contracts and the minimum guys still get the minimum. If there was smoothing the lower paid guys would get the difference between the smoothing max and the non smoothed max. So really the majority of NBA players screwed themselves by not voting for the smoothing.
Section 101
All-Star
Actually all the reports are the owners will opt out and the players want to keep the current deal. Players always end up losing more in negotiations.
Section 101
All-Star
I understood that. I'm not sure why the players rejected that plan, but regardless it's already been rejected. The effect next season is going to be like there is no salary cap for one year. Every single team will have room under the cap to max out at least one free agent if they choose to. There will be a new max contract level, but it will be significantly higher than what we have now. I expect this will create a situation similar to what I described in MLB where it's really only the top 5% of players that benefit from the lack of a salary cap.
Personally, I think teams would be crazy to spend money freely up to 90 million next season without considering that every single max contract is going to be going up in the decade following that year. Just because we have Cousins signed for 14 million next season and Rudy signed for 12 million that doesn't give us free reign to fill out the roster with max money deals. Cousins' contract is going to expire and when it does he's going to be in the 30 million dollar range. If teams aren't careful, overspending in 2016 could cost them their franchise players in 2 or 3 years. It's a balance. Without a smoothing of the salary cap increases that means it's up to the teams to police themselves. And in a competitive marketplace like NBA free agency, expecting teams to police themselves has usually resulted in a lot of stupid short-term decision-making by front office personnel who need to see results now or risk losing their jobs. I can only hope we won't be one of the teams that shoots themselves in the foot over this thing.
Larry David
Starter
This summer most teams will have a lot of cap space. When the cap goes way up, everybody will have a ton of cap space. Sacramento is NBA Siberia. I wouldn't bank on a major impact free agent coming to town any time soon.
Instead, our front office will probably look to use that cap space to take on a player that another team was looking to dump. PDA last tried to do that with Josh Smith's toxic contract and Rondo, with the expectations that a 5 year max for Rondo would be a good extension and he might consider taking it in Sacramento. Those ideas look great in hindsight. So, I'm super fired up to see the distressed asset that PDA trades for this summer!
Instead, our front office will probably look to use that cap space to take on a player that another team was looking to dump. PDA last tried to do that with Josh Smith's toxic contract and Rondo, with the expectations that a 5 year max for Rondo would be a good extension and he might consider taking it in Sacramento. Those ideas look great in hindsight. So, I'm super fired up to see the distressed asset that PDA trades for this summer!
Section 101
All-Star
They basically have to spend, the minimum cap would be $81 million.
rainmaker
Hall of Famer
Rumors suggesting the cap will hit 108M in 17-18. Luxury tax at 127M.
Sources told ESPN.com that based on current projections, league officials expect the salary cap to increase from its current $63.1 million figure to $67.1 million next season, $89 million in 2016-17 and $108 million in 2017-18.
Sources told ESPN.com that based on current projections, league officials expect the salary cap to increase from its current $63.1 million figure to $67.1 million next season, $89 million in 2016-17 and $108 million in 2017-18.
Section 101
All-Star
Saw that. LBJ and CP3 really screwed the non star players.
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