Kind of OT: Hard salary cap coming?

[hasoos]

I have been seeing some discussions that a hard salary cap might be coming to the NBA. It is probably long overdue IMO. The rumored things I have seen listed are: Less share of the money for players, reduced salary cap that is a hard cap in nature, shorter contracts, higher age limit, and more outs for teams to be able to rid themselves of players. Would this be like the NFL? Players being cut any time you want, or renounced in order to make cap amounts? Otherwise, how would you resign your talent if you were already near the cap?

Fortunately these issues are coming up in 2011. Hopefully the Blazers will have locked up most of their talent by then.

 

[Reep]

I have been seeing some discussions that a hard salary cap might be coming to the NBA. It is probably long overdue IMO. The rumored things I have seen listed are: Less share of the money for players, reduced salary cap that is a hard cap in nature, shorter contracts, higher age limit, and more outs for teams to be able to rid themselves of players. Would this be like the NFL? Players being cut any time you want, or renounced in order to make cap amounts? Otherwise, how would you resign your talent if you were already near the cap?

Fortunately these issues are coming up in 2011. Hopefully the Blazers will have locked up most of their talent by then.

I don't think you can have a hard cap without being able to cut players out of your cap total. If the league wants this (not sure), then they can probably plan on another strike. I can't see the player's union going down without a fight.

 

[hasoos]

I don't think you can have a hard cap without being able to cut players out of your cap total. If the league wants this (not sure), then they can probably plan on another strike. I can't see the player's union going down without a fight.

From what I have read, they do plan on another stop of work order.

 

[Tortimer]

I don't think you can have a hard cap without being able to cut players out of your cap total. If the league wants this (not sure), then they can probably plan on another strike. I can't see the player's union going down without a fight.

If the economy stays bad or gets worse the players can go on strike all they want because the owners would rather go on strike then lose money paying players. I think this time the players are hoping the economy improves by 2011 or they know the owners will be united to get a hold on the wild spending IMO.

 

[chris_in_pdx]

How great would that be that the Blazers get part of their "championship window" slammed in their face due to a work stoppage/strike? *sigh* God hates Blazer fans.

 

[Nate4Prez]

How pissed would most NBA fans be if the players went on a strike during these economic times. Most people have to decide between making their car payment on time or buying a ticket to the game, meanwhile the player they were paying to see goes on strike cause his salary is cut from 9 million a year to 7 million a year because of a cap.

 

[Tortimer]

Even David Falk warns the players don't go on strike:

http://www.nytimes.com/2009/02/23/sports/basketball/23falk.html?_r=2&ref=basketball

 

[Nate4Prez]

Even David Falk warns the players don't go on strike:

http://www.nytimes.com/2009/02/23/sports/basketball/23falk.html?_r=2&ref=basketball

Good read, thanks for posting.

 

[mobes23]

Personally, I think a hard cap would be a mistake. It works in football because the sport is so brutal that players only last 4-5 years anyway. The Favres of the world are rare and it's less of a big deal to have players spend their entire career with one team. It's crazy to see how fast players go from MVP seasons to being kicked to the curb (Shaun Alexander, tomlinson, etc.) in the NFL. In basketball, it would be a much bigger impact to see David Robinson, Olajuwon, Malone, etc. move from the teams where they spent the bulk of their career. It would undermine the league horribly -- I'm guessing the hard cap is being waved around so that the owners win on other issues.

Really, the softcap model could be retained and other aspects could be adjusted so that owners make their $$. Lowering the cap, lowering the max contract amount, lowering first year player salaries, etc.

 

[hasoos]

Personally, I think a hard cap would be a mistake. It works in football because the sport is so brutal that players only last 4-5 years anyway. The Favres of the world are rare and it's less of a big deal to have players spend their entire career with one team. It's crazy to see how fast players go from MVP seasons to being kicked to the curb (Shaun Alexander, tomlinson, etc.) in the NFL. In basketball, it would be a much bigger impact to see David Robinson, Olajuwon, Malone, etc. move from the teams where they spent the bulk of their career. It would undermine the league horribly -- I'm guessing the hard cap is being waved around so that the owners win on other issues.

Really, the softcap model could be retained and other aspects could be adjusted so that owners make their $$. Lowering the cap, lowering the max contract amount, lowering first year player salaries, etc.

Hmmm from an owner type aspect I can't agree with you. The soft cap really tends to favor teams with filthy rich owners. I don't think you would see the superstar players moving from team to team, because they would be the ones locked down. You would release average players in order to keep stars. You might have something like the NFL has where they have the "Franchise" tag. Ok your player moves teams, you get a 1st round pick.

Also I would point out, there are many examples of NBA players who should have been allowed to be kicked to the curb long ago, between poor play, behavioral issues, and just generally being insubordinate knuckleheads.

 

[Minstrel]

How pissed would most NBA fans be if the players went on a strike during these economic times. Most people have to decide between making their car payment on time or buying a ticket to the game, meanwhile the player they were paying to see goes on strike cause his salary is cut from 9 million a year to 7 million a year because of a cap.

By the same token, the owners could end the work stoppage by agreeing to no cap. But they also want to protect their interests.

It's not like one side is greedy...both sides are. It's just interesting to me that in a battle of billionaires versus millionaires, it's the billionaires who get the "sympathy" from this populist perspective.

 

[mobes23]

Don't get me wrong, I'm sure the NBA owneers would slobber all over a sweet deal like the NFL owners have. Shoot, a bigger deal might be guaranteed contracts. A player gets injured in the NFL or an owner decides he smells bad and that player is gone. Under that system, we don't even have to think about Darius. Now, THAT sounds mighty fine by me.

As far as the soft cap goes, it DOES somewhat favor wealthy owners, but at the same time the wealthiest owners soon have their hands tied if they go around offering contracts that are too wealthy. Bottomline, while I get that owners would like to have a hard cap, I suspect there are other things on the table that the players would give up that would make the owners nearly as happy.

 

[timmay]

Very interesting thread!

Just some thoughts:

1. I assume if there was a hard cap, it would be higher than the current cap, which purposely allows for overspending. So if the current soft cap was, say 55M, I presume the hard cap would be 65-70M.

2. I wonder if there would be any limitations to the percentage of the cap assigned to one player. (eg. "Maximum player contract is 20% of the overall cap"). Otherwise you could pay LBJ 60% of the cap and have a useless team around him. Sure, it wouldn't be in his own best interests. But that only applies if he considers his best interest to be winning, and not his savings accounts.

Would existing max contracts get chopped down to that maximum? Or would they still get their full paycheck, but it only counts against the max cap amount, until the contract's expiration?

3. Moving the age limit to 21 and having a hard cap would likely improve the quality of players in the league at a given time. Less "project players who may be good in 4 years" and "contract year expenditures who are useless". There are already more players on the fringe of the NBA who could already contribute at a level above the bottom 1/3.

Speaking of which, would they try to end guaranteed contracts?

4. This would increase the usefulness of farm leagues for younger players.

5. I wonder if Europe would get onboard with a reciprocal agreement, or if all hell would break loose.

I'll be following this story closely. Interesting stuff.

 

[Minstrel]

Don't get me wrong, I'm sure the NBA owneers would slobber all over a sweet deal like the NFL owners have. Shoot, a bigger deal might be guaranteed contracts. A player gets injured in the NFL or an owner decides he smells bad and that player is gone. Under that system, we don't even have to think about Darius. Now, THAT sounds mighty fine by me.

The NFL, though, has guaranteed signing bonuses. The result is that players demand enormous signing bonuses...the "guaranteed money" is the key to a contract, not so much the per-year salary. The bonus is spread over the length of the contract for cap purposes, but if a player is cut prior to the end of his contract, the remaining unpaid bonus money is accelerated to that year, in cap money, which is generally a pretty devastating blow to the team's cap management.

So, it's definitely not the case that teams can cut players loose as and when. For highly paid players (that is, ones who had the leverage to demand large signing bonuses), cutting a player loose is a non-starter unless the contract is almost over anyway.

The NFL system is the most "owner friendly" one I can imagine a major pro sports players union agreeing to, and even with that, it is pretty hard to get out of commitments.

 

[Draco]

I'd love for at least some portion of contracts to be non-guaranteed. If the contracts were only 1/3rd guaranteed teams could drop guys who no longer deserve their pay rate and allocate it to more deserving players. Teams would be more enjoyable to watch since the team and fans truly want these guys around.

 

[Mediocre Man]

This should be really interesting. As a former union worker, and steward of the shop I was in, I understand that you don't want to give anything up because you will likely never get it back.

Back in the 80's, before I had anything to do with negotiations, Reagan took $2.00 an hour from union workers to help with his trickle down economics. It was agreed that it would come back on the next bargaining session, but the % never did. The problem with Reagan was he was anti union, so there were no options for us.

Yes, the NBA players make a crap load of money, but going from 9 to 7 million is still losing a huge % of your salary.

If it were me bargaining I would demand guaranteed contracts, keeping the player roster at 15, keeping the soft cap.

As an owner I would demand non guaranteed salaries, since the contracts would be non guaranteed I would leave the rosters at 15, I would demand a hard cap.

It would more than likely be resolved with partial guaranteed contracts like a % of the contract more than likely, 15 roster spots with the final 3 roster spots with total non guaranteed contracts, keeping the soft cap with limits on how much you can exceed it. If the contracts are non guaranteed I would also institute longer contracts to cut down on Free agency.

 

[handiman]

It's not like one side is greedy...both sides are. It's just interesting to me that in a battle of billionaires versus millionaires, it's the billionaires who get the "sympathy" from this populist perspective.

Not surprising, though. The owners represent the interest of the fans ... putting a winning product on the floor. (At least the owners willing to spend.) The players represent only themselves, and their interest (getting the most money they can) generally works to the detriment of the overall product the team can trot out.

 

[barfo]

Not surprising, though. The owners represent the interest of the fans ... putting a winning product on the floor. (At least the owners willing to spend.) The players represent only themselves, and their interest (getting the most money they can) generally works to the detriment of the overall product the team can trot out.

I don't think I agree with you.

Players get more money if they make the playoffs. Not to mention that champions get better endorsement deals and other non-basketball rewards. While personal selfishness can sometimes detract from team play, I think the players are well motivated (financially and by temperament) to win.

Owners that are more fans than businessmen (Paul, Cuban, etc) might be aligned with fan interests. Owners that are more businessmen than fans are going to be focused on what creates the biggest profit - and that may not be an all-out effort to win.

barfo

 

[handiman]

In free agency, it's often the losing teams that have the money available to overpay the most... I don't think there's much correlation between salaries and winning. Maybe at the bottom of the roster, but not at the top.

 

[Sinobas]

I think it's time for the players to come down to the real world. Guys like Adonal Foyle do not, and never have provided the Bay Area with 9 million dollars worth of entertainment. The salaries are ridiculous. If the owners were making a huge profit, then the players should fight for a fair share, but most are losing money.

And oh, NBA, how about improving your product? Stop manipulating the out come of games through officiating, and let a superstars skills speak for themselves, don't call fouls every time someone breaths on them. They would also make the games more exciting if they played less games, and less teams made the playoffs.

To compensate for less games, maybe they could create an NIT playoffs, where those who miss play a short "best of the rest" competition?

 

[Mediocre Man]

I think it's time for the players to come down to the real world. Guys like Adonal Foyle do not, and never have provided the Bay Area with 9 million dollars worth of entertainment. The salaries are ridiculous. If the owners were making a huge profit, then the players should fight for a fair share, but most are losing money.

And oh, NBA, how about improving your product? Stop manipulating the out come of games through officiating, and let a superstars skills speak for themselves, don't call fouls every time someone breaths on them. They would also make the games more exciting if they played less games, and less teams made the playoffs.

To compensate for less games, maybe they could create an NIT playoffs, where those who miss play a short "best of the rest" competition?

How is Adolal Foyles contract anyones fault but the owners? The fans are probably the next culprit. Stay away if you don't like the contract. All he did was say yes when it was offered. Something anyone, anywhere would have done.

I hate when people blame the players for the salary situation. It's greedy owners with a lot of money who allow the salaries to get so out of whack

 

[Tortimer]

How is Adolal Foyles contract anyones fault but the owners? The fans are probably the next culprit. Stay away if you don't like the contract. All he did was say yes when it was offered. Something anyone, anywhere would have done.

I hate when people blame the players for the salary situation. It's greedy owners with a lot of money who allow the salaries to get so out of whack

It is both the greedy owners and the greedy players and their agent. The player and his agent are the ones that usually asks for the large amount of money and usually some greedy owner will give it to them. I say it is almost equal and now the owners just want to stop the madness. I think the owners were greedy but most of the teams were making money. Now that it looks like many teams will be losing money they need to adjust the CBA so the league can stay alive. I know nobody likes to give back things but I bet my live they will this time unless the economy turns around very quickly which it doesn't look like it will.

 

[andalusian]

What if a team is allowed to terminate one contract per year - and it can not be done due to injury - would that not solve a lot of the liquidity issues, ensure better play and yet provide stability to most players in the league?

 

[Minstrel]

What if a team is allowed to terminate one contract per year - and it can not be done due to injury - would that not solve a lot of the liquidity issues, ensure better play and yet provide stability to most players in the league?

Then contracts would provide superstars no protection against injury. If owners wanted that, and I were representing the player's union, I'd push for removing the max salary. At which point, superstars would simply never sign multi-year deals, since anyway they'd be useless if the player got hurt. The result would be a bidding war on every star and superstar, every year. For Portland, Roy and Aldridge would choose to be on the market every year as soon as they were free agent eligible...signing long-term deals would be pretty silly for them.

People assume that no guaranteed contracts would be a great thing and players would hate it, but it's a lot more complex than that, if the max salary were taken away. Players who suffered a major injury would do very badly by such a system, but players who remained largely healthy would make ridiculous amounts of money, taking advantage of year by year salary escalation. Looking at baseball (where there is no max salary), until this year, salaries were growing every year. A player who signed a huge deal for 5 years ended up "underpaid" by market value by year 3. When Alex Rodriguez signed his monumental deal with the Rangers, people were stunned at the idea of $20 million per year. Had this big recession not hit, people anticipated that top free agents this year would all be getting that much.

 

[handiman]

I think guaranteed contracts are still important, but the length of them is the issue. Something in the 3-4 year range would minimize the annual bidding war aspect while still ensuring that players are paid relative to their current level of production, not what they did 6 years ago. It's usually around year 3 or 4 of a 6-7 year deal that it becomes an "anchor" and people begin fretting over the next 3 years of payments. Other than in situations of injury, rarely is a contract considered a mistake within the first 3 years, in my opinion.

 

[Sinobas]

How is Adolal Foyles contract anyones fault but the owners? The fans are probably the next culprit. Stay away if you don't like the contract. All he did was say yes when it was offered. Something anyone, anywhere would have done.

I hate when people blame the players for the salary situation. It's greedy owners with a lot of money who allow the salaries to get so out of whack

Where in my post did I saw it was his fault? I said the players are going to have to come to terms with the fact that many of them are not worth nearly as much as they think they are. The proof is in the pudding with so many teams losing money. Foyle was just an example of an extremely inflated contract for a guy who never even averaged over 6 points his entire career. Ultimately, that was just a stupid move on the teams part to give him such a big contract.

And why would a fan stay away if they don't like a contract? A fan will stay away if they don't like the ticket price.

 

[Minstrel]

I think guaranteed contracts are still important, but the length of them is the issue. Something in the 3-4 year range would minimize the annual bidding war aspect while still ensuring that players are paid relative to their current level of production, not what they did 6 years ago. It's usually around year 3 or 4 of a 6-7 year deal that it becomes an "anchor" and people begin fretting over the next 3 years of payments. Other than in situations of injury, rarely is a contract considered a mistake within the first 3 years, in my opinion.

But that seems like something well within the control of the owner's decision-making, rather than something that needs to be determined by rule. If it truly is a mistake to offer deals in excess of 4 years, then smart owners/GMs will stop doing it.

Generally, rules like these are to artificially prevent what would generally be rational action in a free market in order to hold down the worth of another group/resource (in this case, the players). If 5-6 year deals were really a bad idea, teams wouldn't do them, rule or no rule.

 

[Minstrel]

Where in my post did I saw it was his fault? I said the players are going to have to come to terms with the fact that many of them are not worth nearly as much as they think they are.

If they're not worth that much, why are they being offered the deals? Who decides what they are "really" worth?

 

[handiman]

But that seems like something well within the control of the owner's decision-making, rather than something that needs to be determined by rule. If it truly is a mistake to offer deals in excess of 4 years, then smart owners/GMs will stop doing it.

Easier said than done. Who wants to be the first GM labeled a cheapskate for losing free agents to another team willing to offer longer contracts? Is it really worth taking that stand, knowing someone will be in a better financial system than you and jump in to clean up the mess?

I'm not sure the NBA qualifies as a typical free market system...

 

[Minstrel]

Easier said than done. Who wants to be the first GM labeled a cheapskate for losing free agents to another team willing to offer longer contracts? Is it really worth taking that stand, knowing someone will be in a better financial system than you and jump in to clean up the mess?

But it's not about financial situations. You were saying that 5-6 year deals are damaging, not that owners can't afford them. If refraining from 5-6 year deals makes a team more competitive (by not having salary albatrosses), then smart owners/GMs will start taking those stands. Fans ultimately care about winning. The Spurs don't make big free agent splashes, yet no one claims they're a cheapskate franchise.