Can the NBA Drive 45?
NBA owners have been pining for a hard salary cap seemingly since the soft cap was put in place back in the early 1980s. Every time the possibility would rise like a plastic head in a whack-a-mole arcade game, the players' union would be there to hammer it down and out.
So it came as no surprise to find out that the league's initial collective bargaining agreement proposal—the details of which were explained in an April 26th memo to the players by union director Billy Hunter—reportedly included demands to institute a $45 million hard cap, cut contract guarantees and significantly reduce annual salary increases. And, likewise, it wasn't a shock that the players rejected the idea wholeheartedly.
What may surprise some is that the league's next offer, which was delivered in late April, still insisted upon a $45-million hard cap, a source told The Sports Business Journal's John Lombardo. Lakers point guard and union president Derek Fisher dismissed the NBA's second proposal as being too similar to the original offer, likely because both offers included a 23% reduction in the salary cap. And of course, since the proposal is for a hard cap instead of a soft one, teams would be pressed into making some very difficult decisions with some of their fans' favorite players.
"The nature of the owners' demands is so onerous that I feel it is imperative to reinforce the message of our recent team meetings with this letter," Hunter wrote in the memo, which was quoted by Lombardo.
"Under the hard cap proposal, a team's total salary may not exceed the proposed hard salary cap for any reason," Hunter continued. "The important part to keep in mind is that without exceptions provided in our current soft cap system, all players would have to squeeze tightly under a hard (and much lower) cap number."
Hunter goes on to warn his clients about the NBA's plans for their current contracts as well. As Lombardo puts it, Hunter tells players about 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% for the first $8 million in salary and 25% fro any mount above $8 million."
"A system-wide change in the nature of guaranteed contracts," Hunter wrote, "not only would harm players' economic interests individually, but it would also significantly change the culture of the league collectively."
A few other proposed changes mentioned by Lombardo:
•Annual contract increases would be reduced to 3% or less for players who've earned their Bird rights. (Currently at 10.5%)
•The maximum length of a contract for a player who has earned his Bird rights would be cut from six years to four years.
•Annual contract increases for non-Bird rights players would be reduced to 2% from the current 8%.
•Non-Bird rights players and free agents signing with new teams would only be able to sign contracts for three years as opposed to five.
•Players would be put into one of four categories: A. Minimum Salary Players; B. Rookie Wage Scale Players; C. Maximum Salary Players; D. Someone "fighting for whatever room remains under the new hard salary cap after the three above categories are accounted for."
So, NBA fans, what does all this mean for you? Well, rest assured that all of this can't pass. There are two sides to these negotiations, so some of the previously mentioned demands, if true, will be implemented while others will get dropped. Whether a hard cap will ever see the light of day in the NBA is anyone's guess.
If there is a hard cap, there is still the major issue of what would happen to the current contracts. Would they be grandfathered in to the league's new financial landscape as antiques from a simpler time? Will teams be forced to gut their rosters in a mad scramble to get under the cap?
One loser in all of this seems to be teams with high salaries who were hoping to add a free agent with either the mid-level or bi-annual exception. A radically new CBA could mean that the HEAT, Celtics and Lakers won't be able the veteran pieces they need to compete for a title in 2011-2012. There's also the chance that average NBA players would make only slightly more than fringe players, which could motivate some guys to sign lucrative deals overseas.
It's still too early to say anything with certainty, but we could be looking at a vastly different league in the near future.
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