Author Topic: Salary structure before the cap increased  (Read 569 times)

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Salary structure before the cap increased
« on: June 17, 2019, 03:50:01 PM »

Offline RodyTur10

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I have to apologize beforehand that this will be a long read  :P.

Before the massive salary cap spike in 2016, the cap had been stable for a number of years. From 08/09 to 13/14 the salary cap was around 58 million. The market dictated that superstars got max contracts, stars and high-end starters got big contracts, some other starters or high level role players got decent contracts and the rest of the lot had to settle for minimum contracts or close to that. That was basically how all franchises tried to operate, pay the stars and fill out the rest of the roster afterwards.

After 2014 the cap increased massively and teams suddenly had lots of money to spend. Many players got paid way more than before both absolutely and relatively. This was possible, because all the other players were still under contract on below-market salaries. This imbalance continues till today. The cap is estimated to keep on growing at about 6 million annually. Still significant, but far from the 24 million (70 million to 94 million =) 34%! increase in 2016.

So what I expect is that the league will slowly recover from that 'incident' and bring back the original salary structure. There have been some market changes (introduction of supermax contracts, increased wages for rookie contracts) but overall it's much the same as it was in 2013, just more money available. In two weeks most of those 'old' contracts expire. What will happen is that all those great free agents are going to be paid big money and some other lucky guys as well. But that money will dry up quickly. We've already seen some good players, especially point guards and big men, miss the boat last year.

Some examples: Brook Lopez, Nerlens Noel, Trey Burke, Isaiah Thomas, Derrick Rose, Jeff Green, JaVale McGee, Elfrid Payton, Tomas Satoransky, Rodney Hood, Lance Stephenson, Alex Len, Ed Davis and DeMarcus Cousins. Perhaps you're not fond of all of them, but those are legitimate NBA players who all got paid (often a lot) less than 6 million a year this season.

There simply wasn't enough money to give all these players the contract they should have gotten based on the new standards. The standards had been set too high, franchises don't have the cap space or foresee the heavy tax burden that awaits for them if they don't adjust. So a couple of players will be a victim of those adjustments again and have to settle for a very small contract (elsewhere), which is profitable for the teams that pick them up. I think that a lot of teams will recognise this trend and are going to stop with overpaying role players, since it's so easy to sign then anyway when the gunpowder fumes have been erected. The focus will go back on saving cap space for the opportunity to (re)-sign stars. Franchises who fail to do so are losing franchises in my book.

So how does that salary landscape from before (anticipation of) the cap increase, season 2012/13, translate to now? I took the four best teams of both conferences that season with a representative payroll (Lakers (Kobe), Nets and Miami (big three) had very expensive rosters) and multiplied those salaries by the factor that the cap increased from 2013 to the average of expected salary caps from 19/20 to 22/23: 118,5/58=2,04. In this way the counter-argument that new contracts are based on speculation of continuing cap increases falls, as it's already accounted for, so the comparison stands.

Here are the payrolls of New York Knicks, Indiana Pacers, Chicago Bulls, Atlanta Hawks, Oklahoma City Thunder, San Antonio Spurs, Los Angeles Clippers and Memphis Grizzlies. With their roles (specified based on minutes and production), their salary, and that salary projected to the cap standards of 19/20 to 22/23 (expected to average around 118,5 million). Scroll to the bottom for my conclusion

New York Knicks

Name - Status - 2012/13 - Projection
Stoudemire - Star - 19,9 - 40,7
C.Anthony - Star - 19,5 - 39,8

T.Chandler - Starter - 13,6 - 27,8
Camby - Reserve - 4,6 - 9,4
Novak - Role - 4,1 - 8,4
Felton - Starter - 4 - 8,2
Kidd - Starter - 3,1 - 6,3
JR Smith - 6th man - 2,8 - 5,7

Shumpert - Role - 1,7 - 3,5
K.Thomas - Reserve - 1,4 - 2,9
R.Wallace - Reserve - 1,4 - 2,9
J.White - Reserve - 0,9 - 1,8
Prigioni - Reserve - 0,5 - 1
Copeland - Reserve - 0,5 - 1

K.Martin - Role - 0,4 - 0,8
Payroll 12/13: 78 million => 160 million

Indiana Pacers

Name - Status - 2012/13 - Projection
Hibbert - Starter - 13,7 - 28
Granger - Role - 13,1 - 26,8
D.West - Star - 10 - 20,4
G.Hill - Starter - 8 - 16,3
Mahinmi - Role - 4 - 8,2
G.Green - 6th man - 3,5 - 7,2
Augustin - Role - 3,5 - 7,2
T.Hansbrough - Role - 3,1 - 6,3

George - Star - 2,6 - 5,3
M.Plumlee - Reserve - 1,1 - 2,2
Stephenson - Starter - 0,9 - 1,8
Ayres - Reserve - 0,9 - 1,8
S.Young - Reserve - 0,8 - 1,6
O.Johnson - Reserve - 0,6 - 1,2
B.Hansbrough - Reserve - 0,5 - 1

Payroll 12/13: 66 million => 135 million

Chicago Bulls

Name - Status - 2012/13 - Projection
Rose - Star - 16,4 - 33,5
Boozer - Starter - 15 - 30,6
Deng - Star - 13,3 - 27,2
Noah - Star - 11,3 - 23,1

Hamilton - Role - 5 - 10,2
Hinrich - 6th man - 3,9 - 8
Gibson - Role - 2,2 - 4,5
Belinelli - Role - 2 - 4,1

J.Butler - Starter - 1,1 - 2,2
M.Teague - Reserve - 0,9 - 1,8
Mohammed - Reserve - 0,9 - 1,8
Radmanovic - Reserve - 0,9 - 1,8

N.Robinson - Role - 0,9 - 1,8
Cook - Reserve - 0,5 - 1
Amundson - Reserve - 0,1 - 0,2

Payroll 12/13: 74 million => 152 million

Atlanta Hawks

Name - Status - 2012/13 - Projection
J.Smith - Star - 13,2 - 27
Horford - Star - 12 - 24,5

D.Harris - Starter - 8,5 - 17,4
Pachulia - Role - 5,2 - 10,6
Korver - Starter - 5 - 10,2
L.Williams - 6th man - 5 - 10,2

Petro - Reserve - 3,5 - 7,2
D.Jones - Reserve - 2,9 - 5,9

J.Teague - Starter - 2,4 - 4,9
D.Stevenson - Role - 2,2 - 4,5
J.Jenkins - Reserve - 1,2 - 2,5
I.Johnson - Reserve - 1 - 2

Tolliver - Role - 0,9 - 1,8
Scott - Reserve - 0,5 - 1
Mack - Reserve - 0,3 - 0,6

Payroll 12/13: 64 million => 130 million

Oklahoma City Thunder

Name - Status - 2012/13 - Projection
Durant - Star - 16,7 - 34,1
Westbrook - Star - 13,7 - 28

K.Martin - 6th man - 12,4 - 25,3
Perkins - Starter - 8,3 - 17
Sefolosha - Starter - 3,6 - 7,4

N.Collison - Role - 2,9 - 5,9
Ibaka - Starter - 2,3 - 4,7
Lamb - Reserve - 2 - 4,1
R.Jackson - Role - 1,2 - 2,5
Thabeet - Reserve - 1,2 - 2,5
P.Jones - Reserve - 1 - 2
Orton - Reserve - 0,9 - 1,8
Brewer - Reserve - 0,9 - 1,8
Liggins - Reserve - 0,8 - 1,6

Fisher - Role - 0,3 - 0,6
Payroll 12/13: 68 million => 139 million

San Antonio Spurs

Name - Status - 2012/13 - Projection
Ginobili - 6th man - 14,1 - 28,8
Parker - Star - 12,5 - 25,5
S.Jackson - Role - 10,1 - 20,6
Duncan - Star - 9,6 - 19,6
Diaw - Role - 4,5 - 9,2
Splitter - Starter - 3,9 - 8
Bonner - Reserve - 3,6 - 7,4
D.Green - Starter - 3,5 - 7,2
Leonard - Starter - 1,8 - 3,7

De Colo - Reserve - 1,4 - 2,9
Mills - Reserve - 1,1 - 2,2
Joseph - Reserve - 1,1 - 2,2
Blair - Reserve - 1,1 - 2,2

Neal - Role - 0,9 - 1,8
Baynes - Reserve - 0,2 - 0,4
Payroll 12/13: 69 million => 142 million

Los Angeles Clippers

Name - Status - 2012/13 - Projection
Paul - Star - 17,8 - 36,4
D.Jordan - Starter - 10,5 - 21,5
Odom - Role - 8,2 - 16,8
C.Butler - Starter - 8 - 16,3
Griffin - Star - 7,2 - 14,7
J.Crawford - 6th man - 5 - 10,2
Gomes - Reserve - 4 - 8,2
Billups - Role - 3 - 6,1
G.Hill - Reserve - 2 - 4,1
Bledsoe - Role - 1,7 - 3,5
W.Green - Starter - 1,4 - 2,9
Turiaf - Reserve - 1,1 - 2,2
Hollins - Reserve - 1,1 - 2,2

M.Barnes - Role - 0,8 - 1,6
Thompkins - Reserve - 0,8 - 1,6
Payroll 12/13: 73 million => 148 million

Memphis Grizzlies

Name - Status - 2012/13 - Projection
Randolph - Star - 16,5 - 33,7
M.Gasol - Star - 13,9 - 28,4

Conley - Starter - 7,2 - 14,7
Prince - Starter - 6,8 - 13,9
T.Allen - Starter - 3,3 - 6,7
Bayless - 6th man - 3,1 - 6,3

Arthur - Role - 3 - 6,1
Daye - Reserve - 3 - 6,1
E.Davis - Role - 2,2 - 4,5
Pondexter - Role - 1,2 - 2,5

Wroten - Reserve - 1,1 - 2,2
Pittman - Reserve - 0,9 - 1,8
Leuer - Reserve - 0,8 - 1,6
Dooling - Reserve - 0,1 - 0,2
C.Johnson - Reserve - 0,1 - 0,2

Payroll 12/13: 63 million => 129 million

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On average this gives the following salaries for a player (with the status: star, starter, role, reserve) on a good playoff team based on a salary cap of 118,5 million (average projected cap from 19/20 to 22/23):

Average salary for a 'Star' (17): 2,1 players per team - 12/13: 13,3 and from 19/20 to 22/23: 27,2 million
Average salary for a 'Starter/6th man' (31): 3,9 players per team - 12/13: 6 and from 19/20 to 22/23: 12,2 million
Average salary for a 'Role player' (27): 3,4 players per team - 12/13: 3,3 and from 19/20 to 22/23: 6,7 million
Average salary for a 'Reserve' (45): 5,6 players per team - 12/13: 1,2 and from 19/20 to 22/23: 2,6 million

The point of all this is showing that what the imbalanced market dictated to be the new salary for a role player or an average starter might have been a lot higher than it should and that we can expect the market to adjust. So in my opinion the above numbers are a lot better as a guide to what's a reasonable salary to offer than the salaries that other players in the league have been given in previous years. And keep in mind that this is already under the assumption of a steady increase of the cap. There's a big drop off in warranted salary with a changed role on the team. So my conclusion is to be careful that a newly signed player can meet the expectations that belong to the salary given, otherwise you get in trouble.
« Last Edit: June 17, 2019, 03:57:07 PM by RodyTur10 »

Re: Salary structure before the cap increased
« Reply #1 on: June 17, 2019, 04:44:57 PM »

Offline nickagneta

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First, the huge increase in cap space was due to the league signing new, much larger television deals. The NBA shares all Basketball Related Income(BRI) with the players, I think it's currently 50/50. So as the entire league makes money, the league has this complicated system whereby the cap is set based on the expected total earnings and with the need to pay half those expected earnings to the players.

Putting a definitive ceiling on the max salaries that a player can earn were put in place to save the owners from themselves but also as a way to spread all the money to all the players. In that way, the league doesn't have 5% of the league earning 95% of the money. It creates a lot more money for the rank and file.

So the league gives the team's lots of tools to use to obtain players. There is cap space. There is the draft with players held to economic contracts while they develop to again make more money available to proven vets that aren't superstars. There's the ability to keep your own players through Bird rights. And there is all the exceptions, one, the non-taxpayer MLE that is specifically designed to allow a team over the cap to add an average player, as the MLE is always around what the average NBA player makes.

So teams have lots of options. The problem is incompetency of management in teams. If you have good management, you aren't going to be giving excessive money to players aren't worth it. But some teams open huge money in cap space and when they can't attract a proper star worth big money, they then overspend just to get someone in because teams have to appease their fans. Again, mismanagement.

I think you can't fix this through a system. It's going to happen. Teams are going to overvalue players and overpay them and when they do, some players that should be getting better money, won't be getting it. Does it suck for those players if they then go out and outperform their contract? It sure does. But again, proper management of the individual player means the player should have the ability in turning that year's performance into a financial gain, the next year.