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The labor negotiations are scaring the crap out of me

Chuck - Red's Army May 17, 2011 Uncategorized 8 Comments

If you are anything like me, you've focused on basketball only for the past 6 months and ignored all articles with headlines that included words like "Labor" and "CBA."

I removed my head from the sand this week and what I saw was frightening:

The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent.

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.

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.

Sports Business Journal

Let's put the $45 million hard cap in perspective. The Celtics payroll for this season was $76 million. The 8 guys (includes Shaq and Ray's player options) under contract for next year total $65 million.

Even if there's a meet-in-the-middle approach, any type of hard-cap $60 million or under will decimate the big spending teams like Boston, Dallas, Miami, LA, etc.

A deal with any type of hard cap will have to give teams time to pare down their rosters or else there would be mass chaos.

Non-guaranteed contracts are also on the table. I believe these NFL style deals with large up-front bonuses would create a better product on the court. Too many guys get paid and then quit (see Eddy Curry).

I'm not going to get bogged down too much in the numbers and the demands from each side. In fact, I placing my head back in the sand and I will pull it out in another few weeks to see if anything has changed.

Just thinking about life w/o basketball sucks.

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  • http://profile.typepad.com/jmacpi33 I bleed green in L.A.

    The hard cap will definitely hurt the NBA, with Superstar players getting 17-20+ million a year, a 45mil hard cap will only allow each team one superstar with some decent pieces around him or 2 stars with scrubs on the floor AND NO BENCH! Eliminating a luxury tax option will kill the NBA, why wouldn’t these athletes jump overseas where the Euro and Russian owners can pay them 20-25 mil? Lockouts just SUCK!
    What’s worse is not having the NBA next season at all and another year wasted for our Big 3.

  • http://profile.typepad.com/hilary8484 Hilary8484

    Since the aftermath of The Decision, teams want to make it harder, not easier, for players to leave. I doubt that the owners REALLY want to trim the Bird exception. If the NBA tells players they can only have X no matter where they go, players will have even more motivation to seek out the big markets with big endorsements…. or just to get jobs overseas.
    Salary limits? Sure. Cuts to guaranteed pay when a player quits after signing a big deal? Of course.
    But a truly hard cap in a superstar-personality-driven league is suicide.

  • http://profile.typepad.com/licktheglassitol Classless

    A hard cap is designed to save owners from themselves. There are waaaay too many Joe Johnsons, Jarred Jefferies, and Elton Brands in the NBA who make too much money for mediocre talent and production. A lower salary cap wouldn’t necessarily make it so only 1 superstar will be on a team, but drive down the salaries of everyone else. So Lebron, Wade, and Bosh all won’t be making 14 million a year. And KG won’t be making 21 million.
    A perfect upcoming example of being overpaid will be Jeff Green. He could potential make 10 million. He is not even close to being worth that, yet someone will pay him that. That can’t happen anymore when the league is polluted with teams that lose money every year.

  • http://profile.typepad.com/jmacpi33 I bleed green in L.A.

    I agree, all athletes are overpaid, from KoMe and A-Rod to Scalabrine and Bobby Bonilla (who hasn’t played in 10 years and is just now getting 1.2 mil for 25 years, stupid f#*king Mets). But now they’ve come to expect that money, so why settle for 10mil when you can get 20mil overseas? “yet someone will pay him that”, exactly, simple supply and demand.
    The teams that lose money every year should be eliminated, I’m all for contraction. Bye Bye Timberwolves, Hornets, Bobcats, Grizzlies, Kings and Raptors.

  • http://profile.typepad.com/mdsample greenbeand

    be prepared for a watered down league as high school kids will elect to play over seas for more money

  • http://profile.typepad.com/matt4628 Double P Reppin the B

    There will be major changes to this league no doubt about that. My only question is that if the hard cap is put into place, are players and owners going to need to renegotiate their contracts? Because a $45million hard cap would mean between Wade, James, and Bosh they are at the hard cap already with 3 players. The Celtics situation would mean between Rondo ($11mil) and Pierce ($15mil) we are looking at $26 of the $45 with those 2 players. This labor situation is going to get a lot more ugly than the NFL’s situation.

  • http://profile.typepad.com/matt4628 Double P Reppin the B

    I think what is a much more feasible situation would be non-guaranteed contracts and a franchise tag. Those are both things that will most likely be put into place.

  • http://profile.typepad.com/vandelay28 Lakerhater

    As long as we’re restructuring, do away with the piece of sh#t draft lottery that screwed my Celtics year after year after year. I don’t trust stern to run a ping pong ball machine.