Should the NBA change the rules somehow to prevent these "super" teams?

[pdxKingsFan]

Since it looks like Big Z is going to the Heat despite the Cavs attempt to retain him, I'm starting to think a hard cap will be the only solution, throw in an allowable signing bonus off the cap to offset lost earning potential due to tax laws or endorsements from one town to the next.

Throw in the ability to franchise one player and the ability to make roster cuts but instead of the nasty NFL way how about making a team pay out the full value of the contract on the cut player and be ineligible to re-sign him for the duration of that contract along with a cut player tax to be paid out among any team that hasn't cut a player under contract that season. Also allow for teams and players to re-negotiate contracts after 1/2 the length of the contract - make this a once per career option to discourage hold-outs.

Basically creates an NFL-like system without the indignity of shredding contracts not worth the paper they are printed on.

 

[Rose2Thomas]

A very simple solution would be simply raise or eliminate maximum contracts. Sure you could say the Unholy Triumvirate all took big pay-cuts in order to "win". But really, the contracts they signed weren't much lower than a regular max contract. If instead of sacrificing 1 or 2 million a year, most if not all of which are counteracted by way bigger endorsement opportunities and no state tax, Chris Bosh could have signed a 24 million contract and going to Miami would have meant sacrificing 8 million a year (48 million over the course of the contract), I think he would be a Knick or a Net right now.

Would the Lakers be nearly as stacked if instead of getting Kobe at a reasonable 20 million a year (guess, not going to check it), he was making 32 million a year? They'd still get Artest at the MLE but they probably would have had to let one of Odom or Bynum go.

I think it would do a lot for parity in the NBA, aside from a handful of overpaid guys, for the most part max contract guys are the best value in the league. Lebron at 17 million is waaaay more valuable than 2 or even 4 Shane Battiers at 8 million each. If Bron is worth as much as 4 Shanes, why shouldn't he be able to get the pay of 4 Shanes? If they were paid what they were actually worth, then well balanced teams would have just as much of a chance at winning as teams with superstars with super contracts.

I know it doesn't help with the stars who are on their second max who felt they made enough from the first one that they'll sacrifice a little bit on their second one to help their team out (like Duncan), but those guys are even more rare than the overpaid maxes.

 

[Superman]

There is really no replacement for a hard cap. You can increase the luxury tax but that will only increase the disparity between big market and small market teams even more. The reason is that big market teams make so much more than small market teams that they will still go over the increased luxury tax and do well, whereas the smaller/mid market teams wouldn't dare go over it. for example, I don't see an increased luxury tax deterring the Lakers from going over the cap. They make so much more than most other teams that they could probably care less and it's worth the price for them to pay for having a championship level team.

These are the NBA team revenue from Forbes, it's a couple years old but it gives you an idea of the revenue teams are bringing in.

http://www.forbes.com/lists/2008/32/nba08_NBA-Team-Valuations_Rank.html

ps I think those are just arena revenues so it doesn't include merchandise, local TV, and other income, which should be even higher for big market teams.

The previous poster was talking about raising the tax rate, presumably to a level where it would essentially be prohibitive for teams who might otherwise spend. If it truly was so prohibitive, it's essentially going to be a hard cap.

If it's not quite that prohibitive so as to deter anyone from going over it, it would begin to serve as an even greater divide between the haves and have-nots, because teams like the Lakers and Knicks and other big market teams might still be willing to pay the tax, but teams like the Kings or Bucks or whoever wouldn't dare because of how costly it would be for them. Mark Cuban and Paul Allen can afford to pay a 200% tax; the Maloofs would be much more hesitant.

What might work would be to increase a team's tax rate every consecutive year that they exceed the threshold. So the first year, it's 100%; Year 2, it's 115%; Year 3, it's 130%; and so on, for every consecutive year they are above the tax. Maybe a team might flirt with it a couple of years, but they'd scale back afterwards, even if it means breaking up the title-trending LA Lakers, or whoever it is. Miami couldn't just keep filling out their roster with an MLE contract every offseason, not without getting penalized more each time they do it.

 

[Superman]

A very simple solution would be simply raise or eliminate maximum contracts. Sure you could say the Unholy Triumvirate all took big pay-cuts in order to "win". But really, the contracts they signed weren't much lower than a regular max contract. If instead of sacrificing 1 or 2 million a year, most if not all of which are counteracted by way bigger endorsement opportunities and no state tax, Chris Bosh could have signed a 24 million contract and going to Miami would have meant sacrificing 8 million a year (48 million over the course of the contract), I think he would be a Knick or a Net right now.

Would the Lakers be nearly as stacked if instead of getting Kobe at a reasonable 20 million a year (guess, not going to check it), he was making 32 million a year? They'd still get Artest at the MLE but they probably would have had to let one of Odom or Bynum go.

I think it would do a lot for parity in the NBA, aside from a handful of overpaid guys, for the most part max contract guys are the best value in the league. Lebron at 17 million is waaaay more valuable than 2 or even 4 Shane Battiers at 8 million each. If Bron is worth as much as 4 Shanes, why shouldn't he be able to get the pay of 4 Shanes? If they were paid what they were actually worth, then well balanced teams would have just as much of a chance at winning as teams with superstars with super contracts.

I know it doesn't help with the stars who are on their second max who felt they made enough from the first one that they'll sacrifice a little bit on their second one to help their team out (like Duncan), but those guys are even more rare than the overpaid maxes.

You've just described Major League Baseball. No thanks.

 

[Superman]

Since it looks like Big Z is going to the Heat despite the Cavs attempt to retain him, I'm starting to think a hard cap will be the only solution, throw in an allowable signing bonus off the cap to offset lost earning potential due to tax laws or endorsements from one town to the next.

Throw in the ability to franchise one player and the ability to make roster cuts but instead of the nasty NFL way how about making a team pay out the full value of the contract on the cut player and be ineligible to re-sign him for the duration of that contract along with a cut player tax to be paid out among any team that hasn't cut a player under contract that season. Also allow for teams and players to re-negotiate contracts after 1/2 the length of the contract - make this a once per career option to discourage hold-outs.

Basically creates an NFL-like system without the indignity of shredding contracts not worth the paper they are printed on.

Signing bonuses get really complicated after a while. Teams can use them to hide the true cap value of a contract, so the league creates rules to make sure that the cap value is determined based on the value of the entire contract, but the contract gets bloated in the final years because of a big signing bonus, etc. It gets messy. And then there's the question of whether the amount of the signing bonus is tied to the total value of the contract, and if so, we're right back where we started from, because Team A will have the ability to offer a higher signing bonus under league rules, but the player will still have the ability to decide whether he wants to take less money and leave.

There would also be the issue of players demanding signing bonuses based on reputation and precedent, which is a problem in the NFL right now. Players who just received long term contracts a couple of years ago demanding new contracts with bigger signing bonuses "because that guy got a bigger contract than mine, and my numbers are better than his". This is the Andre Johnson problem that the Texans have right now.

I do like the cut player tax, and think it could be workable, but not if the contract is fully guaranteed. I don't think a team should have to pay twice just because they decide to cut a player. If the cut means that they save money off the total value of the contract and against their cap, then whatever they are saving against the cap gets paid as a tax -- provided they use that cap space in that offseason. So if you cut a player to get under the cap and sign a player in free agency, then you pay the tax. But if you cut a player just to save money, you don't pay the tax.

 

[pdxKingsFan]

The NBA already allows a non-capped signing bonus for teams in Canada to offset Canadian tax issues. If Florida really is an issue then why not create a multiplier annually for each NBA city based on avg. endorsement deals and state and local tax rates? So basically that signing bonus is strictly a reflection of the loss in pay a player takes by signing in a small market with less endorsement opportunities or a high tax state.

Each year the team with the most favorable tax and endorsement situation would be set at 0 and all other teams would be able to pay a one-time bonus of the multiplier X contract value.

The reason the contracts need to be fully guaranteed and taxed is so that teams really pay for making stupid offers to players and then cutting them to fix their cap. It would also get through the union without a protracted strike or lockout.

 

[ElRey]

The previous poster was talking about raising the tax rate, presumably to a level where it would essentially be prohibitive for teams who might otherwise spend. If it truly was so prohibitive, it's essentially going to be a hard cap.

If it's not quite that prohibitive so as to deter anyone from going over it, it would begin to serve as an even greater divide between the haves and have-nots, because teams like the Lakers and Knicks and other big market teams might still be willing to pay the tax, but teams like the Kings or Bucks or whoever wouldn't dare because of how costly it would be for them. Mark Cuban and Paul Allen can afford to pay a 200% tax; the Maloofs would be much more hesitant.

What might work would be to increase a team's tax rate every consecutive year that they exceed the threshold. So the first year, it's 100%; Year 2, it's 115%; Year 3, it's 130%; and so on, for every consecutive year they are above the tax. Maybe a team might flirt with it a couple of years, but they'd scale back afterwards, even if it means breaking up the title-trending LA Lakers, or whoever it is. Miami couldn't just keep filling out their roster with an MLE contract every offseason, not without getting penalized more each time they do it.

An annually increasing luxury tax rate is not a bad idea, and it might take this type of compromise to get a new CBA. Then the next question is how big a luxury tax and the annual increases will be? Too little and you have big market teams getting even better because they'd gladly take the luxury tax hit. Too high and it becomes a hard cap. A hard cap is the most fair for all the teams, even if it's a higher hard cap. That and increased revenue sharing. The NFL is the model that everyone talks about: a hard cap and equal revenue sharing among teams.

 

[LPKingsFan]

An annually increasing luxury tax rate is not a bad idea, and it might take this type of compromise to get a new CBA. Then the next question is how big a luxury tax and the annual increases will be? Too little and you have big market teams getting even better because they'd gladly take the luxury tax hit. Too high and it becomes a hard cap. A hard cap is the most fair for all the teams, even if it's a higher hard cap. That and increased revenue sharing. The NFL is the model that everyone talks about: a hard cap and equal revenue sharing among teams.

In addtion/instead of the escalating tax, you could make a "progressive" luxury tax that is based on some percentage of a team's basketball related income. So then you might not have the bigger markets so willing to pay the tax for years on end because it's not as affordable. But I wouldn't expect the owners of such teams to sign off on a deal like that, for that very reason.

 

[Superman]

The NBA already allows a non-capped signing bonus for teams in Canada to offset Canadian tax issues. If Florida really is an issue then why not create a multiplier annually for each NBA city based on avg. endorsement deals and state and local tax rates? So basically that signing bonus is strictly a reflection of the loss in pay a player takes by signing in a small market with less endorsement opportunities or a high tax state.

Each year the team with the most favorable tax and endorsement situation would be set at 0 and all other teams would be able to pay a one-time bonus of the multiplier X contract value.

I don't know. The Canada thing is pretty straightforward, because every other team is in the US and the federal tax rate applies across the board. Toronto is the lone-outlier. But when it comes to state taxes, you're creating a little different problem, because each state has different tax rates. Next thing is that teams in states with higher tax rates are saying that they should be able to pay a non-capped bonus. Then teams in states with higher cost of living ... and so on. I think that's creating a mess. The NBA makes an exception for Canada because they want a presence up there. But there are some aspects that are simply out of anyone's control, and that's just the way it is. New York and Florida and California are more attractive than Wisconsin or Indiana, and that's just the way it is. You can't fix everything.

I don't really think Florida is that big of an issue. If you're signing a nine-figure contract, you're probably not really all that worried about state taxes. If you're signing a seven figure contract, the taxes don't even account for that much. Let's face it, I'd rather play in Miami than the midwest, and it has nothing to do with no state taxes. I have family in Detroit and have been there several times. Given the choice, I'm choosing South Beach every time, state taxes be damned.

The reason the contracts need to be fully guaranteed and taxed is so that teams really pay for making stupid offers to players and then cutting them to fix their cap. It would also get through the union without a protracted strike or lockout.

You're essentially creating more revenue sharing, not balancing the scales. What you're proposing would have the same effect as the system that's already in place: a team can't give out a bad contract and then just undo it three years later. We already have that. The difference is that you're taking that money from the bad contract and doubling it, so that not only does the player still get paid, but the team is paying that same money back into revenue sharing. Why cut the player? If I trade for Kenny Thomas and want to cut him with three years left on his deal, I'll still have to pay him his remaining money and his contract is still on my payroll, but I also have to pay that same amount of money as a tax to the league? I'll just leave him on my roster. I get no benefit from cutting him, and I have to pay twice as much to do so.

 

[LPKingsFan]

You've just described Major League Baseball. No thanks.

Not necesarily. If there was some sort of "franchise max" that was set extremely high that a team could use on a single player, there's no way a team like LA or Miami could still do what the Yankees or Red Sox do, as long as the salary cap still applies to the rest of the team. The key issue here is still players willing to take a pay cut to create a super squad for a team that's under the cap. What if Wade had a $30 million cap hold, Lebron was making $35 million in Cleveland and Bosh $20 or $25 million? The Heat would still have to get under $55 million--would these guys be have been willing to give up that much money to play together?

 

[Superman]

In addtion/instead of the escalating tax, you could make a "progressive" luxury tax that is based on some percentage of a team's basketball related income. So then you might not have the bigger markets so willing to pay the tax for years on end because it's not as affordable. But I wouldn't expect the owners of such teams to sign off on a deal like that, for that very reason.

Yeah, I don't think you should penalize the team just because they've done well. Penalize them for parlaying their success into more success in the form of rapidly escalating payrolls, but not at a higher rate just because they make more money.

As an aside, I don't think the issue is with revenues. I think the issue is with a) markets, and b) payrolls. You have some teams that simply play in more attractive markets. And you have some teams that are willing to allow their payrolls to get sky high as long as they have a chance to win. Often times those teams are the same, but sometimes you'll get a small market team that is willing to spend (the Kings had the #1 payroll in the NBA for a couple of seasons, back in the glory days), and you'll get a big market team that makes cuts. You have to isolate the two and address both of them.

 

[Superman]

Not necesarily. If there was some sort of "franchise max" that was set extremely high that a team could use on a single player, there's no way a team like LA or Miami could still do what the Yankees or Red Sox do, as long as the salary cap still applies to the rest of the team. The key issue here is still players willing to take a pay cut to create a super squad for a team that's under the cap. What if Wade had a $30 million cap hold, Lebron was making $35 million in Cleveland and Bosh $20 or $25 million? The Heat would still have to get under $55 million--would these guys be have been willing to give up that much money to play together?

The reason maximum contracts exist is because of the salary cap. You don't get one without the other.

 

[pdxKingsFan]

I don't know. The Canada thing is pretty straightforward, because every other team is in the US and the federal tax rate applies across the board. Toronto is the lone-outlier. But when it comes to state taxes, you're creating a little different problem, because each state has different tax rates. Next thing is that teams in states with higher tax rates are saying that they should be able to pay a non-capped bonus. Then teams in states with higher cost of living ... and so on. I think that's creating a mess. The NBA makes an exception for Canada because they want a presence up there. But there are some aspects that are simply out of anyone's control, and that's just the way it is. New York and Florida and California are more attractive than Wisconsin or Indiana, and that's just the way it is. You can't fix everything.

I don't really think Florida is that big of an issue. If you're signing a nine-figure contract, you're probably not really all that worried about state taxes. If you're signing a seven figure contract, the taxes don't even account for that much. Let's face it, I'd rather play in Miami than the midwest, and it has nothing to do with no state taxes. I have family in Detroit and have been there several times. Given the choice, I'm choosing South Beach every time, state taxes be damned.

No you can't fix everything, its just an attempt to neutralize local advantages once you set a firm hard cap with no exemptions. It really would be a simple formula to calculate and one bonus paid at signing. Not that complicated except the work of the accountant/financial guy that sets the formula each year. State taxes for millionaires in Oregon just went up to somewhere around 11%, vs. 0% I think that's substantial enough to fix.

You're essentially creating more revenue sharing, not balancing the scales. What you're proposing would have the same effect as the system that's already in place: a team can't give out a bad contract and then just undo it three years later. We already have that. The difference is that you're taking that money from the bad contract and doubling it, so that not only does the player still get paid, but the team is paying that same money back into revenue sharing. Why cut the player? If I trade for Kenny Thomas and want to cut him with three years left on his deal, I'll still have to pay him his remaining money and his contract is still on my payroll, but I also have to pay that same amount of money as a tax to the league? I'll just leave him on my roster. I get no benefit from cutting him, and I have to pay twice as much to do so.

I think you missed the part where they pay the contract but it comes off their cap. So they pay a 150% penalty to reduce their cap. 100% to the player, 50% to the league.

 

[ElRey]

Not necesarily. If there was some sort of "franchise max" that was set extremely high that a team could use on a single player, there's no way a team like LA or Miami could still do what the Yankees or Red Sox do, as long as the salary cap still applies to the rest of the team. The key issue here is still players willing to take a pay cut to create a super squad for a team that's under the cap. What if Wade had a $30 million cap hold, Lebron was making $35 million in Cleveland and Bosh $20 or $25 million? The Heat would still have to get under $55 million--would these guys be have been willing to give up that much money to play together?

You mean like having a "franchise player" label and teams being able to go over an otherwise hard cap to sign their own player?

 

[LPKingsFan]

The reason maximum contracts exist is because of the salary cap. You don't get one without the other.

Right, but why not allow max contracts to be a larger percentage of the cap than they are now? Or allow teams to use "Bird rights" to re-sign a player over the cap for one or two players per team?

 

[Superman]

No you can't fix everything, its just an attempt to neutralize local advantages once you set a firm hard cap with no exemptions. It really would be a simple formula to calculate and one bonus paid at signing. Not that complicated except the work of the accountant/financial guy that sets the formula each year. State taxes for millionaires in Oregon just went up to somewhere around 11%, vs. 0% I think that's substantial enough to fix.

I just think it would open up a ton of other issues, like differences between a state with a 3% tax rate and a state with an 11% tax rate; or a state with a high cost of living vs. a state with a lower cost of living. Those swings can be just as drastic, if not more, as going from Ohio with a 6% tax rate to Florida with none, or going from Michigan where you can build a castle for $750k to Los Angeles or New York where that barely gets you a flat.

Just sticking with the tax rates, if you're going to create a multiplier for every state, that would be different. It would also be more complicated.

I think you missed the part where they pay the contract but it comes off their cap. So they pay a 150% penalty to reduce their cap. 100% to the player, 50% to the league.

Yeah, I missed that.

But using our Kenny Thomas example, we'd have paid the remaining $30 million or so on his contract, plus an extra $15 million as a tax. Do you think anyone would do that? The only reason a team would want so desperately to remove a contract from their payroll is if it's a really bad contract, and I think the 50% tax would be prohibitive in most cases.

 

[LPKingsFan]

To expand, if I'm reading things correctly, LeBron, Wade and Bosh could make the maximum of 25% of the cap when they signed their extensions following their rookie scale contracts (speaking of which, the rookie scale needs to stay. I don't want to see picks hold out like they do in baseball and football). Let's say you bumped that up to 50% of the salary cap, and kept everything else the same. Assuming they would have been offered the max extensions, last seaon, LeBron, Bosh and Wade would have been each making over $28 million. If the cap this summer is $58 million, each would have had to take massive pay cuts to play together.

I'm not saying they wouldn't have, but this is a star's league, and if you allow stars to earn a higher salary, you force teams to spend smarter (less MLE deals to middling players) to add talent around their stars and make it more difficult for "super teams" to arise. I'm clearly just throwing ideas out right now, but I think allowing bigger per year salaries with fewer years guaranteed could be an interesting change.

 

[Superman]

Right, but why not allow max contracts to be a larger percentage of the cap than they are now? Or allow teams to use "Bird rights" to re-sign a player over the cap for one or two players per team?

Teams with Bird rights can go over the cap to resign players. They do all the time. On top of being able to go over the cap, they can offer bigger and longer contracts to players whose Bird rights they have. The rub is that they have to have the Bird rights, and it was designed so that the home team would have the leg up. But other teams should still have the right to make at least a competitive bid for free agents, Bird rights or not, and free agents should be able to choose where they want to play.

I don't think the issue is with Bird rights. I understand that people are sort of upset that LeBron left the Cavs, but that's his prerogative. He didn't want to be there anymore. I don't think the NBA should stop players from switching teams when they want to. There are protections built in to make it easier for the home team to keep their guys, but sometimes players leave. I feel bad for Cavs fans, but it's sports, and those are the breaks.

I think the issue we're discussing now is having veterans take the minimum to round out a roster that already has three star players on it, particularly when said veterans are accepting contracts for less than market value. The max contracts aren't the problem. The problem is the minimum contracts. That is, if you consider it a problem at all, which I really don't.

There are some serious changes that the NBA should make, but I don't think that you should restrict players from playing where they want to play for however much they want to play for. This "less than market value" thing would be an issue if LeBron, Bosh and Wade had agreed to $5 million/year contracts, but they didn't. The Heat are still over the cap, and they still have restrictions.

 

[pdxKingsFan]

I just think it would open up a ton of other issues, like differences between a state with a 3% tax rate and a state with an 11% tax rate; or a state with a high cost of living vs. a state with a lower cost of living. Those swings can be just as drastic, if not more, as going from Ohio with a 6% tax rate to Florida with none, or going from Michigan where you can build a castle for $750k to Los Angeles or New York where that barely gets you a flat.

Just sticking with the tax rates, if you're going to create a multiplier for every state, that would be different. It would also be more complicated.

I don't think you factor cost of living in because once you start living a certain lifestyle the costs of living start to become whatever you want to spend. Most players keep multiple residences etc. But tax rate is significant, as is the difference between a huge endorsement with a multinational corporation HQd in NY or Dallas vs. Ed's Chevrolet in a smaller city. You neutralize those two advantages and you get pretty close to a level playing field but obviously a warm city is still going to beat a cold city for many or urban beats rural, etc. But hey, you took a shot.

Yeah, I missed that.

But using our Kenny Thomas example, we'd have paid the remaining $30 million or so on his contract, plus an extra $15 million as a tax. Do you think anyone would do that? The only reason a team would want so desperately to remove a contract from their payroll is if it's a really bad contract, and I think the 50% tax would be prohibitive in most cases.

Teams would do it if it was the difference between keeping or losing a star. It shouldn't be something done with regularity thus the admittedly exorbitant penalty. Besides they'd be saving money with the hard cap so it would even out back in the team's favor I suspect.

 

[Superman]

I don't think you factor cost of living in because once you start living a certain lifestyle the costs of living start to become whatever you want to spend. Most players keep multiple residences etc. But tax rate is significant, as is the difference between a huge endorsement with a multinational corporation HQd in NY or Dallas vs. Ed's Chevrolet in a smaller city. You neutralize those two advantages and you get pretty close to a level playing field but obviously a warm city is still going to beat a cold city for many or urban beats rural, etc. But hey, you took a shot.

I just don't think you should be trying to neutralize those things, mostly because they're totally out of your control and can change at a moment's notice. You can give teams a non-capped bonus to sign players because they have a high state tax rate, and then the next year the tax rate can drop or completely go away. Or vice versa: a team doesn't get a bonus, but then the next year their state institutes an income tax that applies to the rest of that player's contract. It's just totally out of your control. Some things just are the way they are. If a team wants a non-capped bonus to be more competitive, they can move to Ontario or Vancouver. Or they can move to a state with no state tax. Washington has no state tax, but the Sonics moved to Oklahoma, a smaller market and a higher tax rate. If the state tax was such a huge issue, that would have never happened.

Teams would do it if it was the difference between keeping or losing a star. It shouldn't be something done with regularity thus the admittedly exorbitant penalty. Besides they'd be saving money with the hard cap so it would even out back in the team's favor I suspect.

I guess on a case by case basis, it might work. But then you have teams that would be much more hesitant to pay a 150% penalty and then go give out new contracts on top of that, and teams that might do it at the drop of a hat. If the Rockets could have gotten rid of McGrady's contract for basically a 150% buyout, they might have done so, but would they have turned around and used that cap space on a new contract? Would they have been financially able to do so? Compare that with the Knicks or the Mavs or Blazers, teams that don't have the same real-world financial restraints.

 

[ElRey]

I don't know. The Canada thing is pretty straightforward, because every other team is in the US and the federal tax rate applies across the board. Toronto is the lone-outlier. But when it comes to state taxes, you're creating a little different problem, because each state has different tax rates. Next thing is that teams in states with higher tax rates are saying that they should be able to pay a non-capped bonus. Then teams in states with higher cost of living ... and so on. I think that's creating a mess. The NBA makes an exception for Canada because they want a presence up there. But there are some aspects that are simply out of anyone's control, and that's just the way it is. New York and Florida and California are more attractive than Wisconsin or Indiana, and that's just the way it is. You can't fix everything.

I don't really think Florida is that big of an issue. If you're signing a nine-figure contract, you're probably not really all that worried about state taxes. If you're signing a seven figure contract, the taxes don't even account for that much. Let's face it, I'd rather play in Miami than the midwest, and it has nothing to do with no state taxes. I have family in Detroit and have been there several times. Given the choice, I'm choosing South Beach every time, state taxes be damned.


.

Yeah making adjustments for cost of living, state taxes, etc is going to be way too complicated of a salary cap. What you want to create is a fair system that will allow ALL teams to compete against one another, and ANY team can win a championship. There are some advantages such as big city appeal and warm weather, that you cannot get rid of and cannot control. What you can control is the salary cap situation so that all teams are on equal footing with regards to attracting players financially. What you don't want is to have the big cities like Los Angeles to have all the big city appeal, etc AND have a huge financial advantage over other smaller market teams. That is a double whammy system that will forever cripple small market teams and turn them into farm systems for the big cities.

 

[Rose2Thomas]

You've just described Major League Baseball. No thanks.

Either I don't understand how MLB works or there is some other sort of misunderstanding here. Isn't the problem with MLB that there is no Team Salary Cap, nor is there a individual player salary cap? What I'm proposing is that there is still a team salary cap roughly the same levels as they currently are, but there is no longer (or a noticeably increased) player salary cap, so that in order to pay the max player, you'll have to sacrifice somewhere else to stay under the team salary cap.

I don't really like it, but I don't really have a problem with team going into the luxury cap, I don't like the idea of teams being forced to cut valuable guys if they're willing to pay for them. Although I would be entertained by the spectacle of a new hard cap completely destroying the depth of this Miami team, especially if one of the small-3 gets injured.

 

[LPKingsFan]

Teams with Bird rights can go over the cap to resign players. They do all the time. On top of being able to go over the cap, they can offer bigger and longer contracts to players whose Bird rights they have. The rub is that they have to have the Bird rights, and it was designed so that the home team would have the leg up. But other teams should still have the right to make at least a competitive bid for free agents, Bird rights or not, and free agents should be able to choose where they want to play.

I don't think the issue is with Bird rights. I understand that people are sort of upset that LeBron left the Cavs, but that's his prerogative. He didn't want to be there anymore. I don't think the NBA should stop players from switching teams when they want to. There are protections built in to make it easier for the home team to keep their guys, but sometimes players leave. I feel bad for Cavs fans, but it's sports, and those are the breaks.

I think the issue we're discussing now is having veterans take the minimum to round out a roster that already has three star players on it, particularly when said veterans are accepting contracts for less than market value. The max contracts aren't the problem. The problem is the minimum contracts. That is, if you consider it a problem at all, which I really don't.

There are some serious changes that the NBA should make, but I don't think that you should restrict players from playing where they want to play for however much they want to play for. This "less than market value" thing would be an issue if LeBron, Bosh and Wade had agreed to $5 million/year contracts, but they didn't. The Heat are still over the cap, and they still have restrictions.

Oh, I definitely don't think players should be forced to stay put. Nor do I think the league should panic in the wake of what's happening in Miami. I'm just brainstorming some ideas that could both reduce salary burden and maybe give teams a little more home-town advantage to keep their stars. I don't think a massive overhaul is necessary (all in all, I think the NBA generally has a happy medium between MLB's free market and NFL's hard cap) but there are some adjustments that should be made. I was talking more about the 3 stars issue because I think tweaking max salaries could have an affect on that, but if vets are willing to play for the min, there really isn't anything you can do, and maybe you shouldn't.

 

[Superman]

Either I don't understand how MLB works or there is some other sort of misunderstanding here. Isn't the problem with MLB that there is no Team Salary Cap, nor is there a individual player salary cap? What I'm proposing is that there is still a team salary cap roughly the same levels as they currently are, but there is no longer (or a noticeably increased) player salary cap, so that in order to pay the max player, you'll have to sacrifice somewhere else to stay under the team salary cap.

Yeah, I didn't quite get that. But still, the point of free agency is to give players the chance to sign where they want, and give teams around the league a chance to make a competitive offer to free agents. At the same time, Bird rights give the current team the ability to offer a more attractive contract in terms of per year salary, total contract value and contract length, so that a team has a reasonable shot at keeping their players, whether over the cap or not. If you're drasticall raising top players' per year salaries in order to strangle the team with the salary cap, then you're also making it harder for other teams to compete in free agency, because leaving $48 million on the table is a lot less likely to happen, especially on shorter term contracts.

I don't really like it, but I don't really have a problem with team going into the luxury cap, I don't like the idea of teams being forced to cut valuable guys if they're willing to pay for them. Although I would be entertained by the spectacle of a new hard cap completely destroying the depth of this Miami team, especially if one of the small-3 gets injured.

Yeah, I don't like it either.

It's not like these three guys are taking basement bargain contracts to play together and offer contracts to other players. And it's really not like vets are leaving tens of millions of dollars on the table to go to Miami. I also don't think there's anything wrong with LeBron James or Chris Bosh leaving their teams -- irrespective of the circumstances -- because they want to team up and build an instant contender.

 

[LPKingsFan]

Either I don't understand how MLB works or there is some other sort of misunderstanding here. Isn't the problem with MLB that there is no Team Salary Cap, nor is there a individual player salary cap? What I'm proposing is that there is still a team salary cap roughly the same levels as they currently are, but there is no longer (or a noticeably increased) player salary cap, so that in order to pay the max player, you'll have to sacrifice somewhere else to stay under the team salary cap.

Yeah, that's what I was thinking too. In negotiations for the next CBA, I think the owners will (and should) push for fewer years in guaranteed contracts. But I think to get the players on board, it would be an interesting concession to allow for higher per year salaries. Ideally, pay would be then more aligned with on-court impact, as salaries of the stars go up, and less bloated contracts for the Drew Goodens and the Travis Outlaws as teams have to get creative around their $30 million men. Actually, though, as I think about this, the players union probably wouldn't like this either, as there are many more middling guys than stars out there.

 

[Superman]

Yeah, that's what I was thinking too. In negotiations for the next CBA, I think the owners will (and should) push for fewer years in guaranteed contracts. But I think to get the players on board, it would be an interesting concession to allow for higher per year salaries. Ideally, pay would be then more aligned with on-court impact, as salaries of the stars go up, and less bloated contracts for the Drew Goodens and the Travis Outlaws as teams have to get creative around their $30 million men. Actually, though, as I think about this, the players union probably wouldn't like this either, as there are many more middling guys than stars out there.

Yeah, I was going to mention that. It would probably lower the MLE by a couple million right off the bat. Which isn't necessarily a bad thing, but it's something the player's union doesn't want. They prefer a higher average salary, so the guys you mentioned can get $30 and $40 million contracts as roleplayers on teams with no shot at contention. Or so Andrew Bynum can make $15 million a year and never do anything to earn it.

I think a hard cap, or a lower luxury tax that has an escalating rate for every year that you're over the threshold, those would keep teams like LA from paying Bynum, Odom, Gasol, Kobe and Artest ($71 million this year, combined), and then having Derek Fisher and getting an MLE for Steve Blake, etc. Boston's Big Four will be at $52 million this season, plus they signed Jermaine O'Neal (a quality signing, by the way). Orlando's four highest paid players will be at $61 million. Denver's is at $58 million. A hard cap or a more restrictive and gradually more punitive luxury tax would make it necessary for these teams to give out more reasonable contracts for their secondary players.

 

[pdxKingsFan]

I just don't think you should be trying to neutralize those things, mostly because they're totally out of your control and can change at a moment's notice. You can give teams a non-capped bonus to sign players because they have a high state tax rate, and then the next year the tax rate can drop or completely go away. Or vice versa: a team doesn't get a bonus, but then the next year their state institutes an income tax that applies to the rest of that player's contract. It's just totally out of your control. Some things just are the way they are. If a team wants a non-capped bonus to be more competitive, they can move to Ontario or Vancouver. Or they can move to a state with no state tax. Washington has no state tax, but the Sonics moved to Oklahoma, a smaller market and a higher tax rate. If the state tax was such a huge issue, that would have never happened.

Yes I realize it isn't perfect but understand it is to neutralize the perceived advantage of one town or another at the time of signing. Why would anyone possibly be against this? The unions would like it because it raises the total $ amount to be paid league wide, the teams wouldn't be obligated to pay but it would just slightly tip the balance of power a little less in favor of the large markets when looking for a big signing. The big markets would still have built in advantages especially under a hard cap where those advantages would only go up because outside money becomes a larger factor. The only argument against it would be that it's complicated and might make one more employee in the NBA offices... who cares? It's just a relatively simple idea.

I guess on a case by case basis, it might work. But then you have teams that would be much more hesitant to pay a 150% penalty and then go give out new contracts on top of that, and teams that might do it at the drop of a hat. If the Rockets could have gotten rid of McGrady's contract for basically a 150% buyout, they might have done so, but would they have turned around and used that cap space on a new contract? Would they have been financially able to do so? Compare that with the Knicks or the Mavs or Blazers, teams that don't have the same real-world financial restraints.

Well the nice thing is that the teams that don't use it will split the 50% tax much the way the current luxury tax works so it will give them more money to pay those small market signing bonuses or to use in a future year when they have to make a cut to add or re-sign a player under the hard cap. Basically it encourages smart management like the NFL without the heartlessness of kicking a guy when he's down (injured usually). Figure teams already carry insurance on players so if its an injury they will be able to offset this with their insurance coverage. If its just a matter of signing a lazy player after a career year well that's a tougher call.

 

[Superman]

Yes I realize it isn't perfect but understand it is to neutralize the perceived advantage of one town or another at the time of signing. Why would anyone possibly be against this? The unions would like it because it raises the total $ amount to be paid league wide, the teams wouldn't be obligated to pay but it would just slightly tip the balance of power a little less in favor of the large markets when looking for a big signing. The big markets would still have built in advantages especially under a hard cap where those advantages would only go up because outside money becomes a larger factor.

I don't think it tips the balance away from large markets at all. It tips the balance away from Miami, Orlando, Dallas, San Antonio, Houston, and Memphis. Those are the only teams in states with no state income tax. The other big markets, like LA and New York, all benefit.

Well the nice thing is that the teams that don't use it will split the 50% tax much the way the current luxury tax works so it will give them more money to pay those small market signing bonuses or to use in a future year when they have to make a cut to add or re-sign a player under the hard cap. Basically it encourages smart management like the NFL without the heartlessness of kicking a guy when he's down (injured usually). Figure teams already carry insurance on players so if its an injury they will be able to offset this with their insurance coverage. If its just a matter of signing a lazy player after a career year well that's a tougher call.

I guess it's just an out for a team that has a really bad contract, but they still have to pay for it, so it's not an easy out. Makes sense.

 

[pdxKingsFan]

I don't think it tips the balance away from large markets at all. It tips the balance away from Miami, Orlando, Dallas, San Antonio, Houston, and Memphis. Those are the only teams in states with no state income tax. The other big markets, like LA and New York, all benefit.

No they would not because the bonus allowance I suggested would factor in tax rate + endorsement potential. So what LA and NY gain in tax subsidy would certainly be wiped out by the added endorsement potential.

The formula doesn't even have to be complex: take all endorsement money per team and compare team total to league average. The percentage over or under gets added to the local tax rate, this percentage is then multiplied by the value of the contract as the max allowable signing bonus. That's it.

 

[DocHolliday]

That is absolutely not a problem. If a player said yea Lebron told me he wants to play together and I said he should come to Miami, and he said cool. Then Dwayne tells Pat Riley...there is no problem. No official of the team ever spoke to Lebron in this scenario.

And as for "planning" for it. It could never be proven...because I am willing to bet Pat Riley as well as all the other teams that did would have been planning for free agency of 2010 anyway. So, it doesn't hold water in my opinion.