Why the NBA Needs a Hard Cap

If you have read any significant portion of my work on the NBA’s Collective Bargaining Agreement then you’ve probably come to the conclusion that I favor a hard salary cap.  That’s a pretty fair conclusion, as I basically believe that a hard cap is the most important starting piece of a sound economic model for the NBA.

It’s about time I told you why.

As someone who is a fan of a small market team, I favor more competitive balance. And as someone who has been working as an operations/financial analyst for the better part of the past two decades, I favor a simple, sensible system for cost containment.

The hard cap is the most direct means to both of these outcomes.

It’s true that, by itself, it would fall short, but it’s still a good the best start.

It goes farther and is more stable than just revenue sharing alone for competitive balance – though more revenue sharing is certainly needed.  Neither revenue sharing nor luxury taxes do anything at all for cost containment.

In the comments on my Spending & Success follow-up post, Alex noted that what he found striking was that “the Heat have a salary $20 [million] lower than the Mavs and are in the same place.”  My initial thought was that the Heat’s current payroll was little misleading, as they’ve committed over $327 million to their three stars over the next six years, only $3 million less than the total the Indiana Pacers had paid their entire roster over the past five seasons.

But the more I thought about it, this conclusion crystallized: Dallas is probably the closest parallel there is to either the 2004 Pistons or the Pacers of the ’90s and early ’00s. Is Dallas — and their payroll — actually the closest thing to a “non-superstar” model that is possible under the current system?  Nowitzki is a great offensive player, but he’s not a presence on LeBron or Wade’s level.  If you were to swap Dirk out for Danny, do you really see the Pacers winning more than say, 45 games?  Beyond that, Dallas is a collection of good – but not great – players (at this stage of their careers).

The Pistons of a few years ago have been held up as a beacon of hope for “building a team of good players that contends.” But they really were incredibly fortunate.  They collected a number of flawed players who were either already on or soon-to-sign reasonable contracts before they’re stock rose, so to speak — and timing is everything.  They won their title early in the run — in a major transitional period in the league, it should be noted — but then fell short in subsequent years.

Under the current system, if I’m not willing to tank until I luck into back-to-back jackpots like, say, Kevin Durant and Russell Westbrook, then what do I do?  I have to try to put together a strong, deep team, and that means I have to spend — most likely well in excess of the tax.  Even if I tank, or get lucky like Oklahoma City, I still have to hope that I get good before I get too expensive. By the time everything starts to gel, there might be an odd man out simply due to the fact that the owner has one too many players to sign to extensions. Kendrick Perkins and O.J. Mayo, for example, both will (likely in O.J.’s case) no longer play for the team that drafted them, at least in part, because the team can’t afford to keep them around.

Enter the alternative: start with the hard cap, get rid of max contracts, enhance revenue sharing — then get the out of the way.  Put the emphasis on discipline and good management.  Move the focus away from deep pockets and inflationary spending. End foolish practices like fully guaranteed contracts or signing Keith Van Horn’s corpse to a $4.3 million guaranteed contract so you can trade for Jason Kidd.

More attractive than anything else is the simplicity of it.  This is what you can pay — and that’s it.  No more poison pills, no more base-year compensation players, no more trade exceptions, no more mid-level exceptions, no more bi-annual exceptions, no more Bird rights. No more convoluted loopholes of any kind in which rich teams can flaunt the very spirit of a salary cap or have-not teams can foolishly squander their financial future because they just couldn’t keep their hands out of the oh-so-tempting cookie jar.

Under a hard cap, it comes down to only one thing: do I have the money or not?

This doesn’t fix everything.  There’s nothing that can overcome the fact that there just aren’t enough LeBrons to go around. And the owners absolutely need to make significant improvements in their revenue sharing system as a close follow-on to this.

But I just don’t know how this league can even begin to address either competitive balance or cost containment without a hard cap.

Topics: Collective Bargaining Agreement

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  • http://hoosierhoopsreport.com Jim R

    I’m not sure you can have a hard cap with guaranteed contracts, which you referred to, and I don’t see the players ever allowing non-guaranteed contracts being the norm. The NFL model is nice, especially for us Indy fans who have basked in the glow of the Manning era, but let’s face it, the Colts being good to great since drafting him isn’t about a small market team thriving under a hard cap. It’s about the Colts snagging lightening in a bottle.

    Call the Colts the San Antonio Spurs of the NFL.

    One way you spare competitive balance is to utilize the NFL’s franchise tag. That allows NBA teams to at least have an anchor, and when you consider how the NFL structures it, it’s pretty stiff to tag a player when he makes the average of the top 5 players at his position.

    I like the salary cap mechanisms–exceptions, Bird Clause, etc. They are elements that’s part of managing a team’s roster, but I can see some of that go away. If you have a hard cap, you could damage the ability to keep together a young roster.

  • Isaac Lutz

    Tim,
    Great op-ed on your support of the hard cap. I agree with your larger point that a hard cap keeps larger markets from buying the pot, and then smaller markets calling the raise and paying mid-level guys far more than they are worth. It has been a case of good owners (wanting a team to compete) going bad by making feckless and reckless decisions with their roster management. I would add to your point by stating that without a hard cap, players who are not marquee guys, but are good players that you need to in order to compete have been unfairly reaping the rewards. Players paid like stars or even superstars who neither have the skill nor capability to carry a franchise single handedly have ruined owner’s pocketbooks and made the league top heavy for years. These player’s worth has been artificially inflated by the fact that large markets can field luxury taxed teams and more than make up for those costs because of tv deals, gate/concession stand revenues, and national market appeals that smaller markets cannot match.
    I agree with Jim who states Manning is lightning in a bottle, and the comparison to the Colts to the Spurs is completely analagous. However, unlike the NFL where any team that makes the playoffs has a fair chance of going all the way, the NBA playoffs are completely contrary to that. 7 game series take the element of fluke, chance, and blind luck out of the game. Over seven games the inferior team may catch fire and steal a game or two, but the chances of an inferior team beating the better team is highly unlikely. See the fact that only 9 teams have won the NBA championship over the past 30 years, and almost all of these teams have been from major markets. Compare that with 15 NFL teams that have won. And since the hard cap was instituted by the league, there are no more super teams like the Giants, Cowboys, Bills, 49ers to win every year. As a Pacer fan, I have been highly discouraged by the fact that we simply can’t afford nor attract good players to come and remain here because large markets consistently buy the pot and we match the ante by spending on mid level guys paid like stars. As well, the Draft is simply not what it was in the 80s and 90s. You can no longer find a franchise piece unless you draft 1-5. There have been exceptions, but not many since highschoolers flooded the draft and one and done college players have entered by the dozen.
    The misconception is that because the league has increased its overall popularity and revenue and ratings are up for many high profile teams, that this success has created league wide profitability. It hasn’t. If the league wants NFL profits it has to create a more balanced league and create the feeling that any team can compete with good management and as always, a bit of luck.

  • Matt

    If you want competitive balance, I think ultimately you need superstars to be on their own teams with little help, a la the Cavs with Lebron.

    To accomplish that end you can either go with “no max” K’s and hard cap. Or no max and aggressive luxury tax. I do think, contrary to Tim’s opinion an aggressive tax could work. Even as it is right now, most teams will spend right up to the line, and you often see teams making deals to get under at the trade deadline.
    The problem with a hard cap is that the players probably will not be going to go so low with the cap number, as to make every team profitable. Under such a hard cap, the big market teams would make $10-15 million/year vs small market losing $5-10 million/year (with both types spending near the cap). An aggressive luxury tax would serve as an another form of revenue sharing.

    I would also favor simplifying (getting rid of exceptions). One of the bigger problems in the current system, is there is little advantage to being 3-4 million under the cap vs over the cap.

  • Eugene Debs

    The problem is, this argument is totally wrong if you look at the playoff success of past teams. You are biased by the fact that your team has been unsuccessful when a look at the conference finalists of the last decade shows small market teams have been just as successful as big market ones.

    Lets look at the conference finalists since 2003 (admiteddly arbitrary date, but i dont think it will matter)

    Detroit 5 times (brokest city in the country. Effectively a small market team)
    LA 4 times (definitely a big market team.)
    San Antonio 4 times (Small market doesnt pay the tax)
    Phoenix 3 times (medium market doesnt pay the tax)
    Miami (3 times, big market, but wont pay the tax)
    Dallas twice (big market)
    Boston twice (big market)
    Orlando twice (small market)
    Cleveland (small market)
    Oklahoma City (one of the smallest markets in the league)
    Chicago (big market)
    Utah (small market)
    Denver (medium market)
    Minnesota (small market)
    Your Indiana Pacers which supposedly can’t compete under any circumstances.

    So…whats the problem here? How can you argue that small and medium markets can’t be successful when they have been just as successful as big market teams over the span of the recent CBA?

    Blame Ron Artest for your ills or blame Larry Bird, but don’t blame market size. It has no correlation with team performance. Im confident if you expanded this to another metric (championships, division titles, wins,) you’d see that the NBA landscape is pretty competitive.

    So then the argument comes down to financials (whether small market franchises can exist without losing money.) That’s an argument for revenue sharing, not cost restrictions. As a fan of a big market team (Boston) and a general labor advocate, I don’t see why the workers should have to take the hit.

    The NBA should look more like baseball, not hockey. Great teams are the lifeblood of the league’s history. And as the data above proves, a great team can come from anywhere.

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  • Chris D.

    @Tim: Great commentary once again. I agree that both sides have not approached each other in good faith at this point, and I’m banking on a lockout. My general gripe with the players is that if they think this should be a players league, let them buy the teams and pay themselves if they think the cash is unlimited. They know they are gaming the system and letting the owners do the dirty work of sticking it to the fans’ pocketbooks while they pretend to be above the fray.

    @EugeneDebs: Tim has addressed all of your arguements in previous posts. It’s not a gripe about the Pacers or small markets not being able to compete. Nobody hands out rings for conference finals appearances. It’s about how long it should take to rebuild when you can’t honorably tank to get a top pick, salaries are wildly inflated, and you can’t cut a player who is clearly failing to fulfill the spirit of his contract (Jamaal Tinsley). Show me one example of a prime baller who moved to a smaller market and won a championship since 2003–or even in the last 20 years.

    @Jim R: You make a good point about the Colts being lucky and getting Manning. However, if the NFL were run like the NBA, Manning would have left for Dallas years ago because the Colts couldn’t have afforded to keep him and Harrison and the Edge at the same time.

  • wintermute

    Correct me if I’m wrong Tim, but it seems to me that your argument for a hard cap boils down to these 3 points.

    1) A hard cap promotes cost containment. Which is true, but on the other hand, haven’t you already pointed out in another post that there is already league-wide cost containment through the escrow system? Escrow + revenue sharing seems to me that it would achieve the same effect as a hard cap in containing individual team costs.

    2) It’s expensive to keep a good team together, so you either have to overpay or else be lucky . That’s true again, but it seems to me that a hard cap solution essentially prevents anyone from maintaining a good team at all, since a successful team’s secondary players will inevitably be drawn away by higher offers from less successful teams. Sounds good in theory right? Everyone is equally handicapped. I submit though, that in real life a team like LA or Miami would have a better chance of convincing good players to stay for less money. In a league where money is equally restricted, cities that can offer non-monetary advantages will have the edge, which is bad news for small market teams in general

    3) A hard cap system is simpler and less prone to be abused. This would be true if it were a pure hard cap with no exceptions of any sort. You must know yourself that it would be pretty naive to expect that sort of outcome. The owners’ proposal already contains a “star player” designation which functions as a cap exception. The NFL has a signing bonus system that’s every bit as complicated as anything in the soft cap NBA. Again, a hard cap sounds good in theory, but you could easily foresee problems cropping up as richer teams seek creative ways to gain competitive advantage.

    I know I’m probably spitting in the wind here, but anyway to me a hard cap seems like a mixed bag. On the surface it seems beneficial to small market teams, but a little thought on the implications and you could easily see ways that it hurts the small market teams that it’s supposed to be helping. I still think revenue sharing is the bigger key. Like a 100% hard cap, 100% shared revenue is probably not achievable, so a practical solution would probably involve elements of both increased revenue sharing and a harder cap.

  • Eugene Debs

    @Chris D.

    “No one hands out rings for conference finals appearances”

    Thats a ridiculous argument. In a 30 team league, thats 29 teams that will be disappointed each year. What are your standards of success? Fans and owners have to set realistic thresholds. Is a season where you reach the conference finals not successful?

    And I havent read all of Tim’s post, but I took the sentence

    “I just don’t know how this league can even begin to address either competitive balance or cost containment without a hard cap”

    to presume that a hard cap is necessary for competitive balance.

    But competitive balance is not an issue if you look at conference finalists, wins, playoff appearances whatever. You guys (and the owners) are pushing something that does not exist as a justification to suck money away from the players.

    If the argument is “we need a hard cap because our business is unsustainable,” then fine, show the numbers and prove it. But the argument for competitive balance just doesnt stand up to whats actually happening in the league.

    I wont even touch your paternalistic comments about the players.

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  • http://www.eightpointsnineseconds.com Tim Donahue

    Thanks to all of you for taking the time to read and comment. It’s important to remember a couple of things about this piece. First, this was an explanation of why I favor a hard cap. It is not meant to be a prediction of what the CBA will actually look like.

    Second, a hard cap is only one aspect of any CBA discussion. Not all of the issues being raised in the comments here are either addressed or nor caused by the basic binary hard cap/no hard cap discussion.

    Now, to respond to some specific points:

    Jim R – Currently, I don’t support a “franchise tag” (or the more mealy-mouthed “Star Player Designation” rumored to be in the owners’ offer), but I’m not completely opposed to it, either. I’d have to see it in the context of the full CBA. I’d probably be more amenable to a “transition” tag structure of some sort – the NFL transition tag essentially creates a right-of-first-refusal for a team – but again, the devil is in the details.

    Matt – I’m flatly opposed to the luxury tax, and I believe the more aggressive the tax, the worse it is. The tax creates a greater disparity between the poorer teams and the richer teams in two ways – first by making the higher payrolls even less affordable, second by the reward for teams being under the tax. In 2010, each team who stayed under the tax threshold was eligible for a $3.7 million distribution. If forced to go with a soft cap, I would actually lean more towards abolishing the tax entirely.

    Mr. Debs – At no point in time did I say that the Pacers (or any small market team) could not compete under any circumstances. In fact, I pretty clearly outlined the conditions under which it appeared they could: Tank & get lucky or spend.

    And your list largely bears this out. The tax wasn’t instituted until the 2006 season, so the first three seasons of your sample have no tax payers, but we can still apply the tax rules to see who would have:

    2003 – Yes: SAS, NJN, DAL No: DET
    2004 – Yes: LAL, MIN, IND No: DET
    2005 – Yes: MIA No: SAS, DET, PHX

    So, yes, the Pacers and TWolves did make the conference finals, but both spent to get there. The Pacer payroll in 2004 was almost $60 million against a salary cap that was less than $44 million. Though that team fell apart on the court, the payroll liabilities remained and by 2006, their salaries had reached over $76 million, and the Pacers paid tax in that first year.

    Minnesota’s payroll in 2004 was over $71 million. In what was that franchises hands-down best year – 58 wins, WCF appearance – Forbes reports an operating loss of $20 million. Had there been a tax from 2003 to 2005, the Minny would have owed about $37 million. (The Pacers also would have been taxpayers all three years, but only about $13 million total). (BTW…arguably a luxury tax keeps one or both of these teams from spending the way they did during those years.)

    Cleveland made it to the conference finals twice, and the only time they were not taxpayers was in 2007, when LeBron was still on his rookie contract. In the three years that followed, they returned to the ECF once (2009), but paid $44 million in luxury taxes. Forbes reports an operating profit for the Cavs during those years – but only $21 million on $479 million in revenue – or about 4%.

    The Magic made the ECF in 2009 & 2010, getting to the Finals in 2009. They were not taxpayers in 2009, but they were in 2010 ($11 million), and they will pay almost $20 million in taxes for the 2011 season. Per Forbes, they lost $2 million the year they went to the Finals, and $23 million in 2010.

    Utah was not a taxpayer in 2007 when they went to the WCF, owing largely to Deron Williams’ rookie contract. They became taxpayers in 2010, will be again in 2011, and recently unloaded Williams because they feared being unable to build a team around him.

    Five of Oklahoma City’s top six players – including their top four scorers in the playoffs – are on rookie contracts. The Thunder paid Kevin Durant, Russell Westbrook , James Harden, and Serge Ibaka a combined $15.6 million. There were 18 individual players in the league this past season who made more, including Vince Carter, Elton Brand, Kenyon Martin, Michael Redd, and Yao Ming.

    Both San Antonio and Phoenix have reached the the conference finals in years they were not taxpayers, and neither will be taxpayers this year. However, each has been a taxpayer three times since 2006 – SA (2006, 2007, 2010), PHX (2008, 2009, 2010).

    Also, each has sacrificed players they could not pay – Phoenix with Joe Johnson, Amare Stoudemire and the rights to several draft picks sold, San Antonio basically gave away the rights to Luis Scola for cash and a couple of second rounders. It’s true that these are decisions that all teams would theoretically have to face under a hard cap, but it’s not one faced by all teams under a soft cap.

    The Pistons remain the only example of a team that neither hit the jackpot in the lottery nor spent in excess of the tax threshold. At this point, they are less of a model, and more of an anomaly – in much the same way that Charles Barkley cannot be held up as proof that someone 6’4″ can be reasonably expected to become top flight power forward.

    The Spurs have done an excellent job of doing more with less, but that doesn’t negate the fact that they’ve HAD TO do more with less. It also seems unlikely that they would have been able to do this without the presence of Tim Duncan.

    Dallas is the only taxpayer in this year’s “Final Four,” but the current system pretty much guarantees that the other three will be if they want to stay together. Joakim Noah & Kevin Durant start their new contracts next season, and Derrick Rose and Russell Westbrook will get their new deals the year after. Within two years, Miami will have $66 million committed to only six players.

    The system is built to drive teams over the tax, which exaggerates inequities. It’s a long-term war of attrition that grinds on the lower revenue teams. That there have been appearances by small market teams in the conference finals does not mean that the current system doesn’t make it harder on those small market teams. It just means that they were either fortunate enough, or willing to absorb enough pain to get around the obstacles. And while you may consider that “good enough,” I would think you’d admit – based on your finishing remarks in your first comment – that your bar on “good enough” competitive balance is pretty low.

    wintermute – Point 1 – No, it wouldn’t. It may approximate the effect to varying degrees, but ultimately, it would fall short of a hard cap in terms on containing costs for individual teams. The elasticity of a soft cap inflates the costs of individual players in individual contexts, and creates asymmetric situations between competing teams. The teams that exceed any caps or taxes will always have more costs, and equity systems only return a portion of what was put in.

    To put it another way, a hard cap would function more like a tax credit, while what you’re proposing would act more like a tax deduction. One is direct and has a 100% impact, the other is indirect and only returns a portion of the total.

    Point 2 – Neither I, nor anyone else, can prevent players from taking less money to either stay or leave. Neither I, nor anyone else, can make Indianapolis or Milwaukee equivalent to New York or Los Angeles. There will always be soft advantages to one degree or another. Those advantages exist to the same degree in a soft cap system, hand-in-hand with the advantage of deeper pockets (or more willingness to lose money, a la Mark Cuban). I’m not looking for a perfect system, I’m looking to remove noise. A hard cap is – by definition – more even than any soft cap system.

    Point 3 – A hard cap is a hard cap is a hard cap. There are no exceptions of any kind in a hard cap system. Once you add an exception – any exception – it is a soft cap. When I say hard cap, I mean no exceptions. When the owners say hard cap, they mean no exceptions. Their “star player” designation would not be an exception to the cap, it would be an exception to the max contract. Teams would be able to offer such players bigger contracts or incentives than otherwise limited by the max deal, but they could only offer those as long as it fit within their cap space. They could not go over the cap to keep that player, just as NFL teams cannot exceed their cap for a franchise tag player or to match an offer sheet on a transition tag player.

    As I noted earlier, this is about what I favor, not what I predict. As to how naive it would be to expect a hard cap, that would mostly depend on how much the owners want it. Barring a successful legal Hail Mary by the players, this CBA will largely be a negotiation among the owners. If you look at reported owners’ proposal, you can see points that are bones for either large or small market teams.

    The objection to the hard cap by the players isn’t the hard cap itself, it’s that it will finally provide impetus to either completely ban fully-guaranteed contracts (which may be necessary to avoid future charges of collusion), or to create an environment where lower guarantees are offered universally and consistently. Billy Hunter has claimed that guaranteed contracts are the “life blood of professional basketball,” which kinda tells you where the players are at on this subject.

    If you’re looking for a pivot point, this is it. This is where the lockout will be born, if it happens. If the two sides were to reach an agreement on guaranteed contracts, then everything else would likely fall into place quickly enough. The question is whether they will, and that depends on the owners, and whether they are willing to stick together on this issue, or whether there are other issues that are more important to them. I do not know if the owners see hard caps/guarantees as their deal maker/breaker, or have a specific BRI split reduction targeted.

    I do believe this though: it will cost the players a lot of money (in terms of BRI split) to keep their guaranteed contracts.

    As to the NFL Bonus system, saying that it’s as every bit complicated as anything in the NBA soft cap is just patently false. A signing bonus in the NFL acts as a de facto up-front buyout agreement on the NFL’s partially guaranteed or unguaranteed contracts. The bonus amount is paid at the start of the contract, and it’s value is prorated over the course of the contract. For example, and $4 million bonus on a 4 year contract would hit the cap at $1 million per year. Should the player be released, traded, or the contract re-negotiated before the end of the four years, then the rest of the bonus hits the cap immediately.

    Working under any system will foster creativity, and once that new approach has been tried, it will be available to (and imitated by) everyone. The NFL cap itself is simple: Do not exceed $X under any circumstances.

    I’m not sure if your last paragraph is meant to imply that a hard cap is actually worse for small market teams than the current or another soft cap system, but if it is, I don’t see any way that can be true. (At least not without creating a regressive system.) The soft cap provision for keeping teams together – the Bird exception – has somehow been packaged and sold as a benefit for small market teams. However, it was put in place specifically to allow the Lakers and the Celtics to keep their teams together – hence the name.

    Small market teams can avail themselves of it, provided they are willing to spend the money. Though the mid level exception gets most of the bad press (primarily because of all the bad signings done with it), it’s the Bird exception that really inflates a team’s payroll. And higher revenue large market teams will always be better able to take advantage of it than small market teams.

    All of the other supposed advantages for the small market teams – rookie scale contracts, the ability to offer your own free agent higher increases and an extra year – are also available to large market teams without distinction. Also, the higher increases and the extra year are both inflationary measures that are more onerous on small market teams than higher revenue large market teams.

    As to revenue sharing, as I’ve said before, that needs to be enhanced due to the structure of BRI, but (a) it doesn’t address the overall league profitability issue and (b) it is an issue between the owners and serves only as a distraction when trying to settle points that need to be agreed upon between the owners and the players.

    None of this is “surface” thinking. It’s a pretty well developed point of view, and I’ve studied and considered this for years. People are going to agree or disagree. Whether it happens or not, I do not know. It is not up to me. But, as was once said, “It is better to vote for something you want and not get it, than to vote for something you don’t want and get it.”

  • Ian2

    For a fan site this talk seems shockingly pro-owner. I don’t see a single concession for the players here.

  • http://www.eightpointsnineseconds.com Tim Donahue

    Note: My statement about the luxury tax not being in effect until 2006 is incorrect. Prior to that, the luxury tax was not triggered unless the league wide Salaries and Benefits exceeded 61.111…% (63.333…% in 2005). There was a tax in 2003 & 2004, with tax thresholds of $52.9 million and $54.6 million, respectively. I am researching to confirm taxpayers.

    I misread the documentation I had, and I apologize for the factual error.

  • wintermute

    Tim,

    Sorry, didn’t mean to dismiss your analysis as “surface” thinking. That was aimed at the kind of knee-jerk “Players are getting paid too much so we need a hard cap!” posts (that’s noticeably absent here btw), and it’s obvious that you’ve put a lot of thought into this, even if I don’t agree with all the points you raised.

    Some points for clarification. You say there is no way a hard cap system could be worse for small market teams than the current soft cap. I think it’s trivial to construct such a system actually, e.g. a hard cap at say $80m for example. Is that what you mean by a regressive system?

    Anyway, it’s tough to argue without details, but I think whatever the end result is, whether hard cap based or soft cap based, it will still be exploitable by richer or better located teams. And my argument there is that a soft cap will at least allow a small market team to spend to compete (sometimes) whereas in a hard cap regime, a small market team could only rely on luck.

    Btw, I’m pretty sure the “Star Player” mechanism is a cap exception. It doesn’t make sense otherwise if in keeping your “star” you end up handicapping the rest of your team. But maybe you’re right and I’m wrong.

    @Ian 2, this isn’t about taking sides. This is the proverbial millionaires vs billionaires here. To be honest, I think both owners and players deserve their comeuppance (i.e. loss of fan support) if they don’t get their **** together and hammer out an agreement. The more interesting question is, how can the CBA be constructed to better achieve parity for small market teams, who are usually disadvantaged compared to the big guys.

  • Isaac Lutz

    Tim,
    With all this talk of the CBA and how it can make smaller markets more competitive, the question still remains for the Pacers: how to use whatever cap space they have and how they can use that most effectively. Nearly every commentator commends the Pacers for their handling of personnel and their current position to make moves with their cap space but specifically what moves should they make. I fully understand that until the CBA is hammered out every team will have to wait and see before make offseason roster changes. But lets assume for the sake of argument that much of what you have urged and argued for gets put into the new CBA (This is a huge hypothetical I know) and that a hard cap is implemented over the next few years with partially guranteed contracts and a smaller BRI (of which seems the most likelyhood since the owners seem ready have a lockout; if you are Simon it means not losing money- you can afford to wait) Which F/A or available player would you target, draft, sign and trade….etc? If you were the GM would you wait until next year when the draft and FA is upgraded and you have more teams willing to slash salaries or make trades to move up in the draft? Or is the time now, do you target players like NeNe, OJ Mayo, Josh Smith, or a blockbuster trade and seize upon the momentum? These what if questions are what make the offseason fun and manageable. The CBA has rightly taken center stage because of its league wide implications but as Pacer fans can you offer any insight into what moves the Pacers should make next- CBA be damned.
    Thanks
    Isaac

  • http://www.eightpointsnineseconds.com Tim Donahue

    Guys, sorry I haven’t been able to respond. Busy at work, and getting ready for a family vacation. I’ll get back to you as soon as I can. I’m hoping more real information will come out soon, as opposed to just my speculation.

    Though this AP piece tends to indicate it won’t be very good news:

    http://sports.espn.go.com/nba/news/story?id=6642514

  • t fizzel

    The one issue with non-guaranteed contracts is that it encourages players to not honor their contracts. Players are rewarded to sign contracts, make some fast cash and then renegotiate to make some more cash. Teams are rewarded to not honor contracts either as they make a commitment and then drop a player when the player doesn’t fit their expectations (read: bad business sense). I realize that you specify (“fully”) so I assume there is some wiggle in your plan (and, I’ve not read through the comments), but, fiddling with the firmness of contract commitments at all introduces loopholes and this seems to be something that you are trying to avoid rather strenuously.
    Certainly, I’m not trying to pooh-pooh the exercise as you introduce compelling ideas well worthy of consideration (and, I love your site… ..and, i’m not a pacers fan), but this is a place where I think that the NBA has it right. Sure, teams make stupid commitments and then are stuck with them but I don’t think it’s because over-spending is encouraged. I think it’s because the teams get caught up in the fever and are poorly run. and, if your team is poorly run, should we reasonably expect a CBA to bail you out? The bulls let Ben Gordon go over a difference of 1 Mill per year which they could have afforded to spend. BG would have helped in this year’s playoffs but the move certainly was the correct one to make. The Bulls have not gone north of the cap for, well, ever. The Knicks basically have a home on the bad side of the cap and have been FAR more uncompetitive than the bulls during this time. They were not forced to overspend for players on their rosters and overspending has not benefited them in the least. This is obviously just two examples, but they are compelling use cases.
    As a final point, I think that “Bird Rights” have to remain to some extent. Teams should gain a slight bit of leverage in retaining players gained through shrewd business decisions (i.g., good scouting). I don’t see you taking a strong stance against this, I just wanted to thoughtlessly make a point that I illogically feel strongly about.

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  • http://[email protected] randy nailling

    Tim,
    Enjoyed the article.You make a lot of valid,interesting points.One point I’m having trouble understanding
    is the Dirk N. is just an average player comment.Oh well,you’re not the first to make that false evaluation.
    Look forward to more articles-thanks

  • Robbie

    The biggest problem with the hard cap is that is shortens players’ careers. The NFL’s big problem is that the average career of a player is only about 3-4 years. All that hard work the players put in over their lives and they are retired by age 26? That’s not right… With the current soft-cap, teams are encouraged to put vets on their teams because they have an unlimited amount of veterans’ minimum salaries. They can pay the 1.whatever million to sign a veteran to a one or two year contract, so the vets can stay in the league. However, with a hard cap, if you don’t think you have enough room to fit a Theo Ratliff on your team, then effectively, you’re ending his career because the cap makes you incapable of making room for him. Same problem with teams having franchise players and keeping them throughout their careers. With the current CBA, you can exceed the cap to sign your own player, but in a hard-cap, players have no incentive to stay with their team because their team can only offer as much money as any other team. So in fact, it wouldn’t create fairness or less talent difference between Memphis and LA, because players like Rudy Gay wouldn’t stay to get paid, but instead leave because he can get paid the same elsewhere. Small market teams who draft well would not appeal any more to their FA’s than large markets, so there’s nothing keeping the players from flocking to Miami or LA or NY without the certainty of a huge paycut. The hard-cap is bad for fans, owners, and players, and should not even be considered as a viable option.

  • Peter M. Arel

    I favor a hard cap that KEEPS the players who have been unjustly reaping the rewards from continuing to do so. Make these players WORK FOR PEANUTS FOREVER or leave and go play basketball elsewhere.PENALIZE BOTH SIDES for taking awa the fans’ basketball for the better part of one season. The fans themselves MUST UNITE and say “WE’RE NOT GOING TO PAY RANSOM FOR BASKETBALL ANYMORE!” and they must send that message tio both players and owners!

  • Peter M. Arel

    I am in favor of a HARD CAP (or anything else that will send the following message to the players and owners): If you guys don’t get together soon and hammer out something that lets the FANS see basketball and soon, IT WILL BE YOUR OWN FAULT IF THE FANS LOSE INTEREST! The fans DO NOT have limitless patience, NOR SHOULD THEY. I DIRECT MY COMMENTS TO THE NBA OWNERS AND PLAYERS.

  • Peter M. Arel

    A HARD CAP IS BADLY NEEDED IN THE NBA. I COULDN’T CARE LESS ABOUT HOW SHORT THE PLAYERS’ CAREERS ARE. I SEE AT LEAST THREE UNFORTUNATE RESULTS IF THE SEASON GOES DOWN THE TUBES:
    1.College students playing basketball in college will STAY in college and opt to get degrees which will help them in fields of endeavor OTHER THAN the NBA;
    2.Concession workers and others whose jobs depend on an NBA season that fails to materialize will turn against the NBA;
    3.FANS WILL BOYCOTT THE NBA IF THE 2011-2012 NBA SEASON IS LOST.

  • Peter M. Arel

    A BOYCOTT OF THE NBA IS PRECISELY WHAT FANS SHOULD DO IF THE NBA SEASON IS LOST(AND EVEN IF A DEAL IS REACHED BY BOTH SIDES), IF NO DEAD IS REACHED BEFORE 1/1/2012. FANS SHOULD PLAY SPORTS THEMSELVES OR WATCH SOMETHING OTHER THAN NBA GAMES(ALSO INCLUDED SHOULD BE A BOYCOTT OF ALL NBA MERCHANDISE) EVEN IF THE LOCKOUT ENDS!

  • Peter M. Arel

    I’d want to see a BOYCOTT BY NBA FANS WHO WILL SAY “NO MORE NBA!” IF LOCKOUT LASTS LONGER THAN DECEMBER 1,2011(AND EVEN IF IT ENDS BEFORE THEN)! IT WOULD SERVE THE PLAYERS AND THEIR UNION RIGHT IF FANS STAYED AWAY FROM THE NBA LONGER THAN THE FANS STAYED AWAY AFTER THE LAST NBA LOCKOUT! THERE SHOULD BE NOBODY holding the owners’ feet to the fire;let the players who have gone overseas continue playing basketball there. And if others go abroad, LET THEM PLAY BASKETBALL OVERSEAS! Who knows? Playing overseas may actually be of some benefit to the players AND to the NBA!

  • Peter M. Arel

    I am hoping MORE fans will jump on MY banwagon as I enjoy sports I can participate in myself. I also hope more fans will BOYCOTT THE NBA AND THE PLAYERS AND THEIR UNION as the recession our country is in worsens WITHOUT EVER GETTING BETTER! I hope more NBA OWNERS WILL BE MADE TO SEE THEIR FOLLY IN PAYING GUARANTEED CONTRACTS TO PLAYERS WHO HAVE YET TO PROVE THEMSELVES WORTHY OF A BIGGER, MORE LUCRATIVE CONTRACT.

  • Peter M. Arel

    I am hoping more fans will jump on my BANDWAGON(word “BANDWAGON” WAS MISSPELLED IN A PREVIOUS POST) and form sports or exercise groups with friends or family members and tell the NBA OWNERS AND PLAYERS “LET’S SEE WHAT YOU GUYS CAN DO WITHOUT THE FANS’ MONEY!” A HARD CAP IS BADLY NEEDED TO LEVEL THE PLAYING FIELD IN THE NBA.