Photo: Washington Post
The 2011 NBA season tips off tonight when the Miami Heat visit the Boston Celtics. It’s everyone’s first look at the biggest free agent signing of the summer. That’s right 7-foot-1, 330-pound Shaquille O’Neal plays his first game for the Celtics.But seriously, for all the things the NBA has going for it – a summer of heightened fan interest, a surplus of youthful superstars, rejuvenated franchises in New York and Chicago, and stacked teams in markets big (Los Angeles) and small (Oklahoma City) – there’s trouble waiting on the horizon.
The current collective bargaining agreement expires at the end of this season and negotiations towards a new one have already gotten ugly.
David Stern has said NBA teams lose more than $350 million annually. To compensate for the losses he has proposed player salary cuts of $750-800 million. “That’s our story and we’re sticking to it,” Stern has said.
Meanwhile, player rep Billy Hunter has countered that if the NBA does stick by that story, “it will inevitably result in a lockout and the cancellation of part or all of the 2011-2012 season.”
Stern's first order of business is to cut the players' share of revenue by $750-$800 million from their $2.3 billion intake last season.
Stern's proposal would reduce that to a shade more than 40 per cent.
Aside from the obvious disdain for a pay cut, the players are probably asking this question: If Stern claims the league is losing about $350 million and he wants to cut player salaries by more than $750 million, what happens to the remaining $400 million?
Cue compromise for this one. The players will probably have to take a cut, but not in the neighbourhood of $800 million. Look for the two sides to settle on a 50-50 revenue split, with the players' taking a $300-$400 million pay cut, initially. As the league grows, player compensation will return to its current level.
The owners want a strict salary cap that teams can not surpass. It will effectively limit player salaries, and allow owners to let their expensive players walk while avoiding local fan outrage.
Teams can go over the cap under the following circumstances:
- Re-signing its own players
- Inking draft picks
- Signing players to minimum contracts.
- Special salary cap exceptions, the most notable of which is the Mid-Level Exception. The MLE permits capped out teams to use an additional allotment -- equal to the average NBA salary -- to sign free agents.
Once teams reach the luxury cap -- set at about $70 million -- they must pay a dollar-for-dollar tax on every additional dollar they spend.
Not only does a hard cap deter teams from signing players to big contracts, but players also know that a hard cap increases the likelihood they move around. Look no further than the NHL and NFL for proof. Both leagues have seen teams change drastically from year-to-year in an effort to stay under the cap. For example, the defending champion Blackhawks were forced to unload much of their Cup-winning talent this offseason.
The NHL moved in this direction in 2004, and we bet the NBA follows suit. Dynasties will become a thing of the past, as roster turnover from year-to-year grows rapidly. Fans should think twice before buying their favourite player's jersey.
That means there are between 390 and 450 available jobs at any time.
This appears to be a mere negotiation tactic from Stern. The likelihood of creating bad blood with more markets seems unlikely--remember the fiasco in Seattle?--especially in the case of the Grizzlies and Bobcats, who are beginning to assemble talented rosters and improve their standing.
- Non-guaranteed contracts: Remove guarantees from all contracts, or allow for partially-guaranteed salaries that resemble the NFL's model. This is going to be a major point of contention.
- Shorter contract terms: Prevent owners from screwing themselves with long contracts that overpay ageing stars
- Lower maximum salaries: Is $20+ million per year too much to pay for a basketball player?
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