CBS: Owners may drop insistence on hard cap
The existing preseason may already be shot, but there's at least some sense of movement in the NBA's ongoing labor negotiations. Following Tuesday's meeting between the player's union and league representatives, Ken Berger and Adrian Wojnarowski reported that owners may finally be relenting on their demand for a hard salary cap. Provided they can get a significantly more favorable split of basketball related income (BRI), the owners reportedly may settle for a more severe version of the current luxury tax system at the expense of a hard cap--the kind of compromise many would have predicted months ago. But better late than never, right?
While the last deal effectively guaranteed 57% of BRI would go to players, owners have demanded significant concessions in order to offset the mounting losses of a significant proportion of the league's franchises. The players have some good arguments for why those claims of hardship are overstated, but they've also made some real concessions, suggesting that they know it's not all David Stern's hot air. The latest word is that the union has lowered its BRI ask to 54% over a five year deal, while the owners' ten-year offer would see players claim just 46% of revenues in a front-loaded deal guaranteeing players around $2 billion in total salaries for the next eight years. Hardly an insignificant gap (each 1% of BRI is worth close to $40 million per year), but there's at least a basis for negotiating.
It's tough to say how effective a modified tax system could be without knowing the specifics, though if strict enough it could act in a manner similar to a hard cap. That's obviously what players want to avoid, but the whole point of the hard cap/competitive balance argument is that the league's big market teams shouldn't be the only ones allowed to spend like it's going out of style. That's how things are now: while most of the league effectively treats the $70 million luxury tax like a hard cap, the select few (Lakers, Mavs, Knicks) have blown through it regularly, with the modest 1-for-1 tax revenues being split amongst the non-paying teams (around $3.7 million per team last year). From a small market perspective, that also makes the current system a poor solution to the dual problems of competitive balance and revenue sharing. If the tax were strict enough to act as a hard cap, then there would be no tax revenue to re-distribute. If it were lax enough to allow many teams to go over the tax level, then it doesn't do much for the issue of payroll disparity. And it also doesn't dissuade cheap, big market owners from skimping on rosters in order to claim luxury tax revenues (aka the Donald Sterling approach). In other words, let's hope that the one system-fixes-all approach goes by the wayside. For a terrific analysis of the hard cap and competitive balance, check out Tim Donahue's latest piece at 8 Points, 9 Seconds--especially key is the difference Tim outlines between parity (ie equality of outcome) and competitive balance (equality of opportunity).
So what would I like to see? Well, as a Bucks fan I'm necessarily rather biased...but if the players and owners are allowed to act in their best interests, why can't fans do the same? Personally, I'd love to see a hard cap put in place to prevent bigger market teams from exercising their significant revenue advantages, and any system that does a better job of distributing salaries to players who actually play well is a decidedly good thing. That's exactly what would happen with a reasonably-defined hard cap, which even with current rules on guaranteed dollars and contract lengths would likely scare off much of the free agent overspending that has gone to the NBA's non-superstar veterans in past years. It's basic logic: if you set a specific total amount aside for players each year (ie 57% of BRI) and then cap the salaries of young players (through the rookie scale) and superstars (max contracts), then everybody else is going to get some of the money that would have gone to the youngsters and superstars in a free market. Adding in the threat of a hard cap changes the dynamic, since overspending on non-essential veterans could threaten a team's ability to retain valuable young stars. Why risk losing a young building block in free agency two years from now just to give Drew Gooden a five year deal? With a hard cap it's unlikely any team would. Of course, the players continue to oppose most attempts by owners to make NBA salaries more efficient--ie fewer guaranteed years, less guaranteed dollars, etc--even when the total amount of dollars paid to players is guaranteed to be the same. Kind of tough to get behind the union when they're protecting the Eddy Currys of the world, isn't it?
I'd also love to see significant concessions from players enable greater revenue sharing, if only because it will make wealthier owners more willing to ship money to small markets. I'm not going to argue that's "fair" to players (or big market owners for that matter), but I think they'll be OK. After all, no matter what happens with the current negotiations, NBA players will remain the highest paid professional athletes (and union members) in the universe. And the big market owners? They'll continue to be billionaires, which isn't a bad gig. Admittedly, neither revenue sharing nor a hard cap will guarantee the Bucks become contenders (or ever get a new stadium), but that's not really the point. A fundamental shift away from the current system certainly won't hurt smaller markets like Milwaukee compete with the big boys in Los Angeles, Chicago and New York, and in the end it's all about creating a system where there's some sense of every team having a shot at building a winner. The star-driven nature of basketball makes that more difficult than in other sports, but that doesn't mean we can't hope for the NBA to do better. So while fans will continue to have justifiably zero sympathy for the owners, it should be awfully hard for small market fans to side with players who continue to defend a system that seems undeniably broken. I'm not saying I want to lose a season for that cause, but a deal for the sake of saving games in November could seriously backfire down the road for fans in places like Milwaukee, New Orleans and Charlotte.
"We had two factors (last season), the injuries and our fit," Hammond said. "It didn't work the way we would like it to, and I think we've rectified that.
"I think maybe (former Golden State coach) Al Attles said years ago, 'Chemistry is one of those things that you don't know how you got it, and you don't know how you lost it when it's gone.'
"Once we do begin, I think our team will fit well together."
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