Owners' CBA proposal detailed: $45 million hard cap

[Donoghus]

I like the idea of being able to get out of mistakes.

When a team's payroll is $75 million -- $17 million above the "cap" -- it realistically means that you have to shave $35 million in payroll to make a run at an impact free agent.  For a lot of teams, that's a pipe dream.

  Keep in mind that if the proposal went through the team would probably gain back that $17M from the rollbacks they wanted, and a new max contract would be about 25% less than it is now.

Yeah, I'm not arguing that.  I'm saying under the current system, getting out from long-term deals and competing when your baseline is way above the cap makes it much, much harder for most franchises to compete.  Under a hard cap, it would be easier to be flexible and to improve quickly.

  An aside, but even though owners can roll back the money payed out in a current contract, I'd assume they wouldn't have the power to make them less guaranteed. Would you agree?

I would believe that the owners, on their own, wouldn't be able to implement such a thing, however, it could be achieved through collective bargaining with the player's union to incorporate in the next labor agreement. 

I find it extremely unlikely that it would come to fruition, though.  That's a HUGE concession on the players' part.

[Roy H.]

An aside, but even though owners can roll back the money payed out in a current contract, I'd assume they wouldn't have the power to make them less guaranteed. Would you agree?

It's hard to say.  Basically, the two parties can agree to any system they want, and if they want to make that apply to currently guaranteed contracts, they could. 

I think it's unlikely that existing contracts would be made non-guaranteed, however.  I think the players would have a hard time swallowing that, even more than a salary rollback.  It's one thing to talk about a 15% to 25% reduction in salary across the board; it's quite another to talk about potentially losing 50% of your salary immediately (and more than that, if you make over $8 million).

As a further aside, I'm curious whether the "roll back" as proposed would be immediate, or whether it instead would take place in the 2014 season (the same time as the "hard cap").  I'm assuming the owners want it to be immediate, but if the players could collect their full salaries until 2014, I think the system would have more of a chance of gaining support.  Essentially, the only players affected under that scenario would be players with four and five years left on their deals; that's just not a lot of guys.

[slamtheking]

The NBA’s initial proposal for a new collective-bargaining deal called for a $45 million per team hard salary cap along with non-guaranteed player contracts and significant cuts in annual salary increases.

The details, spelled out in an April 26 memo issued by National Basketball Players Association Executive Director Billy Hunter, marks the league’s push for a major overhaul of the NBA’s economic model and emphasizes to players an aggressive bid to significantly slash costs and shorten contracts.

Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap.

Hunter also alerts players to the league’s effort to alter the structure of current contracts while detailing the owners’ proposal that no player contract be guaranteed for more than 50 percent for the first $8 million in salary and 25 percent for any amount above $8 million.

The league also strikes directly at a team’s cap room to re-sign players at a maximum salary, known as the “Bird” exception, after hall of famer Larry Bird. Annual contract increases would be no greater than 3 percent for players meeting the Bird rule, down significantly from the current 10.5 percent increase, according to the memo. Owners also proposed that the Bird rule contract length be cut to four years from the current six-year length.

Link.

Wow.  I knew the owners were going to be aggressive, but I didn't think they'd be *that* aggressive.  I can't imagine a scenario where the players agree to anything close to that without a long lockout.

To recap what we know of the proposal thus far:

1.  $45 million hard cap, which couldn't be exceeded for any reason;

2.  The hard cap would be phased in over three years; (Link)

3.  Contracts could be a maximum of four years, with 3% raises (and perhaps shorter / smaller for non-Bird deals);

4.  Only 50% of the first $8 million of a contract is guaranteed, with only 25% guaranteed for amounts over $8 million;

5.  "Rollbacks" of existing deals by 15% to 25%;

6.  A strange version of a franchise tag, which essentially confers "Super Bird" rights on one player per team (Link);

7.  A reduction in roster size (?) (Link).

8.  Elimination of sign-and-trades;

9.  An "amnesty" provision, where teams could waive one player with no cap penalty (but would be responsible for his salary)

Personally, I'd be surprised if a hard cap was accepted, unless it was something like 60 mill.  It would need to come with a much lower max salary too in order to avoid a superstar soaking up a third or more of a team's salary.  A hard cap could in fact result in more player movement due to team's not being able to resign their own free agents due to lack of room under the cap.  I wouldn't be surprised if this turns into a softcap but with stricter guidelines for exceeding it.

I think shorter contracts with partial guarantees is going to be a battle ground.  think of how many overpaid stars there are that haven't been worth their contracts due to injuries, lack of effort or decline in skills.  I think the players will fight that tooth and nail.

[DavorCroatiaFan]

Does anyone know if whole 2011/12 season is cancelled, what happens to 2012 draft? All 30 teams go to lottery?

[LarBrd33]

hard cap is all fun and games until you're a fan of a winning team who can't re-sign one of its stars.  The bird rights were created for a reason... had there been a hard cap in the 80s, The Celtics wouldn't have been able to keep Larry Bird in Celtic green.

I don't see how the hard cap does anything other than increase player turnover.  

You ever try to build a dynasty with a hard cap?  I've been playing "Out of the Park Baseball 2011" and trying to win the World Series as the Pittsburgh Pirates despite the fact my cheap owner only gives me 40 million budgeted for player contracts.  Here's what ends up happening... every few years I have to trade my superstar players for young prospects before they hit free agency... then the young players develop into superstars and I have to trade them for young prospects before they hit free agency... and then those young prospects develop and I have to trade them for young prospects.   It's a vicious cycle.  I've won 5 World Series in 10 years, but my fanbase is pretty apathetic towards the team... they are disgusted that I keep trading their favorite players.  5 World Series in 10 years and fan interest is at "average".  Lol.  It'd be like if the Celtics won the title with KG and Pierce.. and then immediately traded them for Kevin Durant and Kevin Love on rookie contracts... then a few years later won another title, but prior to them hitting free agency had to trade Durant and Love for Blake Griffin and John Wall on rookie contracts... then a few years later had to trade Wall and Griffin for two new players on rookie contracts... etc

They deal with it in the NFL, hasn't hurt the Pats one bit.  If anything, it allows teams with smart management to prosper from other team's screwups.  I trust Danny not to screw things up; I mean, seriously, what's the worst free agent contract he signed anyone to?  Scal's 3/$15M?  He's made his mistakes, bit very rarely has he screwed up by giving someone too big of a contract.

What I'm saying is...

Say you're the Thunder.  Your team is garbage for a few years and you finally luck into a couple studs in the draft.  First being Durant... you obviously need to give Durant a max deal.  Currently it's 15-19 mil a year... lets just say Max deals are capped at 15 million.

Durant = 15 million

Ok then you have Kendrick Perkins making his 8 million...

You're up to 23 million.  

Now lets say Westbrook is about to be a free agent and is commanding a max deal.  You can't let this star go.. so you give him his 15 million...

You're up to 38 million for 3 players.  

Currently the Thunder have guys like Nick Collison and Sefolosha making 3 million a year, but for the sake of argument lets just say that when things settle down, role players like this only get 1 million a year.  Lets say they fill out the next 8 players for a total of 8 million dollars (unlikely)

You now got 11 players making a total 46 million.   What happens when Serge Ibaka and James Harden become free agents?... you say "sorry Serge and James... we are already paying reasonable money to Perkins, Durant and Westbrook"... you say "Sorry Oklahoma fans.. I know you love this team, but there is no feasible way we can keep Ibaka and Harden when we are already paying Westbrook and Durant."

So the Thunder, who aren't really THAT great of a team to begin with, are forced to dilute their talent for the sake of staying under the hard cap... and some team like Sacramento or Cleveland gets to pick off Harden and Ibaka?  

So essentially... you know how NBA Legends talk about how expansion has killed the competitive spirit of the old days where teams like Philly, Boston and LA were trotting out multiple legends on the same team?...   We'll all be pining for the days when a team like Oklahoma could afford to keep Durant, Westbrook, Perkins, Ibaka and Harden together...

 


Or how about the Bulls who currently have Boozer, Noah and Deng making a combined 41 million in 2013/14 ... You're basically telling me that in order to extend Rose, they will be forced to dump all their role players for minimum contract guys and choose one of the 3 big contract players to dump in order to make room for Rose?

[wdleehi]

Does anyone know if whole 2011/12 season is cancelled, what happens to 2012 draft? All 30 teams go to lottery?

Draft by team finish the last time they played. 

[LarBrd33]

Does anyone know if whole 2011/12 season is cancelled, what happens to 2012 draft? All 30 teams go to lottery?

Draft by team finish the last time they played.  

Isn't this problematic if the entire season is locked out?  Timberwolves could get back-to-back #1 picks... Suddenly becomes a massive competitive advantage if you have back-to-back #1 picks under rookie contracts for the next 4 years while the rest of the league is dumping their talent to get under a hard cap.  Lol

[Donoghus]

Does anyone know if whole 2011/12 season is cancelled, what happens to 2012 draft? All 30 teams go to lottery?

Draft by team finish the last time they played.  

Isn't this problematic if the entire season is locked out?  Timberwolves could get back-to-back #1 picks... Suddenly becomes a massive competitive advantage if you have back-to-back #1 picks under rookie contracts for the next 4 years while the rest of the league is dumping their talent to get under a hard cap.  Lol

I know the NHL devised some system back in '05 to deal with their draft after their lockout year. 

They re-ran the lottery and used some formula to determine how many ping pong balls they got. 

I'd assume the NBA would devise a system using a similar means; coming up with some formula.

[LarBrd33]

Does anyone know if whole 2011/12 season is cancelled, what happens to 2012 draft? All 30 teams go to lottery?

Draft by team finish the last time they played.  

Isn't this problematic if the entire season is locked out?  Timberwolves could get back-to-back #1 picks... Suddenly becomes a massive competitive advantage if you have back-to-back #1 picks under rookie contracts for the next 4 years while the rest of the league is dumping their talent to get under a hard cap.  Lol

I know the NHL devised some system back in '05 to deal with their draft after their lockout year.  

They re-ran the lottery and used some formula to determine how many ping pong balls they got.  

I'd assume the NBA would devise a system using a similar means; coming up with some formula.

I know it's unlikely, because it's not like this upcoming draft is the 2003 draft...  but the Timberwolves theoretically could come out of this thing looking better than any team.  What if they win the lotto and get the top pick this year... lets say that player is the next LeBron James.  Then say the entire season is locked out and they get the top pick again in 2012 by default... lets say it's another LeBron James.

You're adding two LeBron James to a core of Kevin Love, Michael Beasley... and Ricky Rubio.  Lol

And since most of them are rookie contracts they will be able to have a nice 4 year dynasty until they become free agents and the Wolves are forced to dump them all to stay under the cap.

[LooseCannon]

Are the owners willing to have a hard cap (with a salary floor) that is tied to a percentage of basketball revenues?

[The DarkPassenger]

I didn't read all other 8 pages so sorry if this was in some way mentioned previously.

A hard cap is something that is a good idea for the NBA but I do not think that 45 million will be the cap number but was just a chess move by the NBA to ensure that everyone knows that they are serious.

What will be interesting is what some other, not specified, rule changes will be. For instance if multiple players are waived then does it count against the cap or is it a cap hit (like the NFL)?

Also what the cap number will be and mean for teams that could be over it. Like say "super teams"? If it is below what the Heat are at are they forced to waive or trade one or more of the Big 3? What will it mean for Howard and CP3? Would "super teams" be possible unless they take some REAL hits money wise?

With all of that said I am planning on no NBA next season and hope that it returns it does better and as competitive as ever.

[Phil125]

Other than the cap being 45 million.  I like everything listed there. 

[Q_FBE]

This is a league of overpaid spoiled brats. We are in for deflationary depression in the US....... Fans will not be able to take out 2nd mortgages and rely on increases in their credit card limits to pay for NBA season tickets anymore. Companies will cut sponsorship and advertising revenue to ESPN and Teddy Turner. Mathematicians like Hollinger lose their jobs over nothing to write about.

The three blind mice, Joey Crawford, Knick Bavetta, and Bennett Salvatore will have to be sent to the nursing home.

Let Kobe, Lebron, Wade, Bosh, Rose, Amare, Melo, and all the overpaid veterans take their act to Europe for a year where the Referees will call traveling on them and the fans can heckle them into embarassment.

I am looking forward to College Basketball this upcoming season. Go Wichita St and Seattle U.

Better yet I just became a Born Again Hockey fan and look forward to Coaches Corner at Intermission on Hockey night in Canada.

How about that Tyler Seguin, EH?

[Q_FBE]

hard cap is all fun and games until you're a fan of a winning team who can't re-sign one of its stars.  The bird rights were created for a reason... had there been a hard cap in the 80s, The Celtics wouldn't have been able to keep Larry Bird in Celtic green.

I don't see how the hard cap does anything other than increase player turnover.  

You ever try to build a dynasty with a hard cap?  I've been playing "Out of the Park Baseball 2011" and trying to win the World Series as the Pittsburgh Pirates despite the fact my cheap owner only gives me 40 million budgeted for player contracts.  Here's what ends up happening... every few years I have to trade my superstar players for young prospects before they hit free agency... then the young players develop into superstars and I have to trade them for young prospects before they hit free agency... and then those young prospects develop and I have to trade them for young prospects.   It's a vicious cycle.  I've won 5 World Series in 10 years, but my fanbase is pretty apathetic towards the team... they are disgusted that I keep trading their favorite players.  5 World Series in 10 years and fan interest is at "average".  Lol.  It'd be like if the Celtics won the title with KG and Pierce.. and then immediately traded them for Kevin Durant and Kevin Love on rookie contracts... then a few years later won another title, but prior to them hitting free agency had to trade Durant and Love for Blake Griffin and John Wall on rookie contracts... then a few years later had to trade Wall and Griffin for two new players on rookie contracts... etc

Sounds pretty much like what Bill Belichick does in Foxboro full time. He does keep Tom Brady but I bet this does not last forever either.

Seriously, the NBA's cost structure is out of balance with todays economic reality and the day of reckoning happens on June 30. There will not be an NBA season in 2011-2012.

And then, there could be fewer teams playing to start the 2012-2013 season and possible franchise relocations. Could Seattle get back in the NBA game.... I say no because Seattle Center's Key Arena is not up to NBA standards and Washington State will not build them a new arena. But the real pain of not having a local team was felt last night when the Seattle Sports bars sat empty while OKC battled Dallas. They did put on the Bruins because I was one of the first fans in there....

The owners proposal is harsh and the players will have to make consessions to keep playing in Tomorrow's NBA.

Glen Davis can take his act to the Idaho Stampeders and go out for late night cheeseburger runs to Wendy's with his buddy Antione Walker.

[Q_FBE]

So, again, either billionaires are idiots for trying so hard to buy franchises in a sport that is a money loser, or they are lying.

I think a lot of billionaires would buy teams even if they were money losers, for the prestige that goes along with it.  Obviously, those annual losses can't be too deep, and it's preferable if teams are turning a profit.  However, I think lots of owners see franchises as a toy to play with that brings them infinitely more recognition than they'd get in the financial world.

I mean, if sports were like most other businesses, the owners would be attempting to maximize profits, and we know that not all owners do that.

Thanksdad Ga$ton milked the Celtics for profit. He even saved an extra 3 million by trading for Vin Baker and subsequently tried to void his contract for drinking problems.

For those owners that are struggling financially, they need to get out of the game and have the league contract so that the remaining franchises can be stronger talent wise.