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Report: NBA wants to avoid massive salary-cap spike

Jul 25, 2014, 11:11 AM EDT

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The blue section of the line in the above image represents the actual NBA salary cap (data via RealGM).

The orange section represents the projected cap for 2015-16 and 2016-17. The league projected a 2015-16 cap of $66.3 million, according to Mark Deeks of ShamSports.com. In 2016-17 – when a new national TV contract kicks in – ESPN estimates a cap around $80 million, which is the figure I use here.

After years of steady growth followed by stagnancy until this year, the salary cap rocketing upward could cause all sorts of complications. Already, players – including LeBron James – are structuring their contracts to take advantage of the predicted high cap.

However, the NBA has other ideas.

Zach Lowe of Grantland:

Executives on lots of teams have gotten the sense from the league office that the NBA will try to smooth the increase of the cap level to minimize the impact of any massive one-year jump in revenue. Exactly how it would do that is unclear. The precise team salary cap — $58 million last season, $63 million this season — is tied to overall league revenues; the two rise and fall together. Players are guaranteed about 50 percent of the league’s “basketball-related income,” and the league and union set the cap figure so player salaries add up to a number in that 50 percent ballpark.

The league’s specific plan for smoothing out the cap increase is unclear, and in the end, it may opt against doing so at all. The players will receive their guaranteed 50 percent share of revenues regardless of any engineering.

There are a lot of roadblocks to smoothing the cap’s growth.

The cap is set by formula based on league-wide revenue. The only way, under the current rules, for the cap to be less is for revenues to be less.

Perhaps, the NBA could bargain with the National Basketball Players Association, offering a higher percentage of revenues in future years in exchange for the players getting a reduced cut in 2016-17. But only current players would be voting on that proposal, and they want the money coming in while they’re still in the league.

Kevin Pelton of ESPN has suggested the NBA structure its new TV deal so the money arrives in strategic stages rather than too much at once, but that runs into a similar issue. I can’t see current owners deferring revenue they could get sooner than later just to keep some of it from the players.

Adam Silver has frequently called the players “partners” in the league’s growth. In the end, I think he’ll have to heed those words and watch the salary cap – and therefore, player salaries – suddenly soar as the owners get a huge influx of revenue.

It’s not a bad problem for anyone involved.

  1. jcmeyer10 - Jul 25, 2014 at 11:17 AM

    Haha. The league plays hard ball on percentage of revenues the players get and then want them to play ball and not get paid? Good luck with that.

    • 4thquartermagic - Jul 25, 2014 at 4:58 PM

      Somehow I think the Players Union will acquiesce to the owners demands. For reasons unknown.

  2. nflcrimerankingscom - Jul 25, 2014 at 11:20 AM

    Adaptive filter on revenues will work.

    • spursareold - Jul 25, 2014 at 3:00 PM

      Why on EARTH would the players ever agree to take less than the 50% they were bullied into last lockout?

  3. rajbais - Jul 25, 2014 at 11:29 AM

    They need a huge increase in the salary cap. An increase in the salary cap should have been the resolution over a decade ago.

    Why? Luxury taxes would have been avoided, however it is all the owners and general managers’ fault for improper contracts to players.

    After all almost every free agent received a maximum length contract.

    Even though I should have known or tried to find out about how television money factors into the salary cap over a decade ago it was difficult to do when there was nothing available online or only ESPN was the best option when it never truly cared about that stuff.

    CBA FAQ’s didn’t reveal this kind of TV info. No joke.

    Adam Silver must get better TV and online deals than MLB. After all, why be cripple to a sport that has only been viewed by 53 year olds and older?

  4. seasickcecil - Jul 25, 2014 at 11:39 AM

    Looks like labor problems coming again in 3 years.

    • scoochpooch - Jul 25, 2014 at 1:35 PM

      Please be right. Maybe contraction will be a result.

      • cfos00 - Jul 25, 2014 at 6:27 PM

        With teams going for $2B, good luck with contracting…

  5. rrhoe - Jul 25, 2014 at 11:50 AM

    I smell a lockout/strike on the horizon.

    • scoochpooch - Jul 25, 2014 at 1:36 PM

      Please be right. Maybe contraction will be a result.

  6. zoomy123 - Jul 25, 2014 at 11:55 AM

    So what you’re saying is this: Adam Silver and NBA owners are trying to find a way to increase their own revenue while simultaneously trying to keep player salaries artificially deflated? And people wonder why the Black Mamba is squeezing every copper penny he can out of LA? LOLOL!

    • fanofthegame79 - Jul 25, 2014 at 1:31 PM

      Man, you hit the nail on the head!!! How in the world does this even seem right?? The owners are looking forward to getting a big TV deal and a major increase in their profits…but they want the players to not see any of that money (at least not at the same rate of increase as the owners, anyway). If I were a player, I’d be seriously considering a lock-out and I’m glad the NBAPA is having the players hold out some money out of each paycheck in order to have a “salary” when or if they do lockout. This kind of stuff has to be a slap in the face to the players: who in the hell do the owners think us fans pay all of our hard-earned money to watch?!? It’s a players league and they should get the lion’s share of the profits. SMH.

  7. azarkhan - Jul 25, 2014 at 12:01 PM

    Increase the salary cap to $90 million and get rid of guaranteed contracts.

    • louderthanwords1 - Jul 25, 2014 at 12:51 PM

      The players union will never give up guaranteed contracts. Even if for some reason they did get rid of them what you would see is the same thing you see in football which is large signing bonuses spread out over the course of the deal. Might sound good to you in theory but it leads to a few things you don’t see in basketball right now. Players will hold out for more money come training camp because future years aren’t guaranteed(Sure they can do like football and fine players for missed time but what good does that usually do in the NFL?). In basketball a hold out would be even worse because in the NFL unless your a qb you don’t have the same sway a superstar in the NBA would. Teams would also have dead money on their cap from players cut before their final year when their signing bonus money would be accelerated. Guaranteed contracts aren’t the problem, it’s the amount of money and who certain gms give the money to that is the problem. Instead of hoping for change in the system you probably just need a change in your teams decision makers.

      • bkbell3 - Jul 25, 2014 at 1:30 PM

        That’s why the owners have lock outs. They want to protect them from themselves and the bad decisions they make. Part of the problem is to keep a free agent or steal a free agent away from another team a lot of times you have to over pay. Small market teams an cities that are considered less desirable also have to over pay or take on a not so good contract in a trade to get a good player. You saw good examples of this this year with parsons and haywards contracts as well as some others. It’s compounded even more when a similar player sees another get a big contract and they say i’m as good or better than that guy and i want that money or more.

    • deadeyedesign23 - Jul 25, 2014 at 2:08 PM

      if you want to get rid of guarenteed contracts then there needs to be NO cap.

      I mean really you want a fair system for all parties? No cap and all contracts are 1 year long. But owners would never do that because they’d have to pay players EXACTLY what theyre worth. Also they wouldn’t be able to rob players of an open market for the first 7 years of their career.

      • therealhtj - Jul 25, 2014 at 3:27 PM

        True, but if you have a chance to cut dead weight, you can do that too. Completely worth the trade off, plus the NBA offseason will probably break twitter.

        And it’s not all owners, just the small, undesirable markets where they claim they can’t afford to field a team without the protections the CBA affords them.

  8. hurley711 - Jul 25, 2014 at 1:28 PM

    Smooth out the increase in 2016….after several guys signed 2 yr deal with player options to cash in on that newfound money cough LBJ cough…

    • fanofthegame79 - Jul 25, 2014 at 1:33 PM

      That’s called being a smart business man (cough LBJ cough…)

  9. therealhtj - Jul 25, 2014 at 3:01 PM

    The salary cap is already kept artificially low – even if every team goes to the tax threshold they still wouldn’t make the 50-50 split.

    Stinks of the small markets cheaping out again.

  10. ufools - Jul 25, 2014 at 5:20 PM

    Keep salary cap where you want it and pay out a bonus with the remaining dollars to get to the union mandated share of revenues. Pretty easy.

  11. chiadam - Jul 25, 2014 at 10:07 PM

    “I can’t see current owners deferring revenue they could get sooner than later just to keep some of it from the players.”

    But players should defer their share to give it to the owners?

  12. imakcds - Jul 26, 2014 at 11:02 AM

    REAL Money has ALL the Power, everyone else HAS to settle for their crumbs.

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