Author Topic: NBA Salary Cap Spike  (Read 1439 times)

0 Members and 0 Guests are viewing this topic.

NBA Salary Cap Spike
« on: June 28, 2018, 08:58:12 AM »

Offline Eddie20

  • Don Nelson
  • ********
  • Posts: 8497
  • Tommy Points: 975
As we did with the Bradley and Crowder deals, the C's are in great position to take advantage of the eventual salary cap spike (beginning in the 20-21 season?) by having some foresight. I recall many here were furious when we gave the said players, particularly Bradley, those deals, but Ainge and Zarren looked like geniuses with how it all worked out.

By taking advantages of longterm deals for Smart this summer, along with Irving and Horford (having him sacrifice annual salary for years, which would then be considered a bargain rate despite expected decline with age) next summer would be optimal for our financial flexibility moving forward.


https://www.si.com/more-sports/2018/05/14/supreme-court-sports-betting-ban-ruling-impact
Quote
Take NBA players. Their CBA with the NBA does not mention sports betting right and integrity fees. However, Article VII of their CBA contains an expansive definition of “basketball related income”, which includes common forms of revenue generated by NBA games. TV broadcasts, apparel sales, arena signage and other NBA products and services that produce revenue are included within BRI. The CBA dictates that players and owners evenly split BRI, as each receives between 49% and 51% depending on various factors. BRI is also connected to the configuration of the annual salary cap for NBA teams, with higher BRI meaning a higher salary cap.

Sources familiar with the NBA’s thinking on sports betting right and integrity fees tell SI.com that the league and players’ association are in agreement: These fees count as BRI. This makes sense on a number of levels.

First, the “sports betting right” portion of the fees reflects the shared enterprise by players and the league in delivering a product from which sports betting companies seek to derivatively profit. These fees would account for the use of labor and identity.

Second, Article VII includes gambling revenue within the definition of BRI (so long as that revenue isn’t generated by a gambling business owned by the NBA or its teams):

[BRI shall include] all proceeds, net of Taxes, less reasonable and customary expenses…from gambling on NBA games or any aspect of NBA games…[But] BRI shall exclude revenues from gambling on NBA games or any aspect of NBA games generated by casinos or other gambling businesses, owned or operated by a Team, Related Party, or a League-related entity, whose total revenues are not predominantly from gambling on NBA games or any aspect of NBA games.

On one hand, the “integrity” portion of fees might not literally comprise “proceeds from gambling.” They constitute league investments into safeguarding games from unlawful, unethical or undesired practices—much like league investments into other kinds of security that are not part of BRI. However, the NBA is not expected to engage in such word-parsing. If the NBA receives sports betting right and integrity fees, those fees will be included in BRI.


Silver on the topic -

Quote
“As you know, we’ve spent a fair amount of time over the last several months talking directly to states like Delaware, like New Jersey, West Virginia, New York, Illinois and others that are in the process of passing legislation. One of the issues we had on the table and have been seeking is a so-called integrity fee. And the notion of the integrity fee is that as we’re now dealing potentially with 50 different jurisdictions, all with differing permutations of sports betting law, it’s going to dramatically increase the enforcement costs for the league office.”

“We think the integrity fee is something that we are entitled to, one, because we have the additional costs and also — something that as I’ve said before, we’re not hiding from — that we also think we are due a royalty. And that if the intellectual property that is created by this league — and I know all the leagues support this position, but in the case of the NBA, we will spend roughly $7.5 billion creating NBA basketball this season.”

Re: NBA Salary Cap Spike
« Reply #1 on: June 28, 2018, 09:10:01 AM »

Offline BitterJim

  • NGT
  • Satch Sanders
  • *********
  • Posts: 9181
  • Tommy Points: 1238
With 3 max players, and Brown/Tatum looking like future max players, I don't think we'll be able to take advantage of any cap spike as far as signing free agents goes.

I do wonder if a spike would help us delay repeater tax penalties, though, and make it easier for us to keep the gang together
I'm bitter.

Re: NBA Salary Cap Spike
« Reply #2 on: June 28, 2018, 09:23:00 AM »

Online slamtheking

  • NCE
  • Walter Brown
  • ********************************
  • Posts: 32318
  • Tommy Points: 10098
With 3 max players, and Brown/Tatum looking like future max players, I don't think we'll be able to take advantage of any cap spike as far as signing free agents goes.

I do wonder if a spike would help us delay repeater tax penalties, though, and make it easier for us to keep the gang together
to me, this is the key benefit to the C's.  provided the top 5 players on the team stay healthy through that point (Al would seem to be the one likely replacement when this occurs), we'd be able to afford the contracts of Kyrie, Hayward, Brown, Tatum and Al (or Al's replacement -- Williams?).  that will be huge as GSW will likely be in decline (and we continue our predicted dominance of the league with banners #20+   ;D  )

Re: NBA Salary Cap Spike
« Reply #3 on: June 28, 2018, 09:43:41 AM »

Offline saltlover

  • Frank Ramsey
  • ************
  • Posts: 12490
  • Tommy Points: 2619
I don’t think the NBA stands to gain quite as much revenue windfall as they’re hoping, and certainly it won’t be in one big rush to create a true spike.  Their primary hope for a revenue windfall comes through convincing states newly enacting gambling legislation to give the NBA a small percentage of the money bet as a so-called “integrity fee.”  Firstly, legislation takes a while to pass in each state, so even if they were successful in getting this integrity fee, the new revenue streams would not come all at once, but rather would enter over the course of 3-5 years.

Secondly, cash-strapped states (in other words, all of them), are looking to tax gambling revenues as a source of new income that no one will complain about, helping them with their budgets.  Giving the NBA a cut is going to come in part from state coffers, and most states aren’t going for that.  There might be a couple that do fall for it, if a well-placed legislator sneaks in some language, but big gambling revenue states like NY and CA will not (and in the case of California, if they do, it will be reversed quickly by a voter initiative within a year of the info becoming public).

The NBA is asking for a 1% fee on all NBA bets, which they calculated as being worth $2 billion.  That’s simply not happening, and they would be lucky to get a tenth of that.

However, they will find new advertising partnerships available with gambling institutions that will see the NBA as highly synergistic, and should be able to profit off that, but I doubt it will be nearly the magnitude that owners are hoping for, and again, it won’t arrive all at once.  That said, you’re right that future cap and tax thresholds after the one set next summer will rise more than they otherwise would have, and that will dull the expense of contracts signed this summer and next.