Debate: Hard Salary Cap For The NBA?
One of the many issues on the table in the ongoing labor dispute between the NBA and its players is whether or not the league should adopt a hard cap, which would put all of the teams on equal footing in terms of the ability to pay players. HOOPSWORLD’s Eric Pincus and Jason Fleming find themselves on opposite sides of this issue, and debate it for you below.
HOOPSWORLD’s Eric Pincus:
The league and players are far from reaching an agreement on a new Collective Bargaining Agreement (CBA). How long the lockout will last is hard to say, but there’s no end in sight. One key hot-button issue is the notion of a hard cap. The league wants to set a maximum salary that teams can collectively pay to their players. For the union, it’s a line in the sand they just won’t cross.
And they shouldn’t . . .
The core issue at hand is splitting up the near $4 billion the league generates in Basketball Related Income (BRI). The owners are trying to freeze salaries over a ten-year period. They’ve raised the total amount going to players and renamed the hard cap a “Flex Cap” but it’s the same thing just dressed up with a less offensive name.
What percentage of income should go to the owners vs. players is the core issue – the only issue at this point. There’s just no reason to change the way the NBA has functioned for decades and decades with a hard cap. If the owners are truthfully losing money and the players need to give back, then there’s a number that will work somewhere at the end of this road.
The players want to grow economically with the league as it grows and they want a percentage of income that goes with it while the owners are trying to lock in a set dollar figure and thus a smaller percentage over time. However that’s resolved, if the owners ever want to get the season started, they need to drop the hard cap hot button. They don’t need it. What does a hard cap achieve if the overall revenue split is agreed to?
The NBA is built around superstars, multiple names on one team. A hard cap will only hurt teams like the Los Angeles Lakers, Miami HEAT, Dallas Mavericks and other big-ticket teams willing to spend. Diminish the attention-grabbing franchises with contract limitations and the league will lose tremendous buzz.
Parity is important but overrated, especially in the NBA. Some teams are going to have (and spend) more money than others. It’s not nearly as unbalanced as Major League Baseball but a far cry from the “Any Given Sunday” National Football League. What the NBA needs is a proper BRI split mixed a solid dose of revenue sharing. That should help the smaller market teams prosper and stay competitive.
At some point, the Lakers and a few others are going to have advantages the smaller market squads don’t.
That works for the NBA, even for the smaller teams . . . especially if revenue sharing comes from LA’s coffer.
Simply put, there are other mechanisms to provide competitive balance instead of alienating the players union and hurting the premiere franchises in the league.
As previously reported by HOOPSWORLD, one NBA executive admitted that owners know that holding out for a hard cap will probably cost the season. The league is slowly backing away from that position. Judging by the rhetoric after an unproductive August bargaining session, the league is backing away very, very slowly (if at all).
At some point, the owners will “cave” on this issue as they should but it will cost the players some serious points in BRI.
It’s a negotiating tactic . . . a facade. A well-written CBA will help prevent salaries from escalating uncontrollably but there can’t be any limit on overall spending, not if the NBA has any plans of resuming. Ultimately it doesn’t matter what system the league uses. If they’ve locked in a specific BRI split, the rest is just minutia.
Why would and why should the owners fight for something they simply don’t need?
In the end they won’t. There won’t be a hard cap.
HOOPSWORLD’s Jason Fleming:
When you bring up the idea of a hard cap in NBA circles there are no opinions in the middle ground. Either you hate the idea, which makes you pro players, or you love the idea, which makes you pro owners.
First we have to figure out why exactly some are so adamantly opposed to the idea. I think it boils down to the wording because those words together – “hard cap” – represent restriction. The idea flies directly in the face of the United States’ supposed free market economy. We don’t like the idea of restrictions on income at any level. It feels wrong.
Guess what else feels wrong: an unbalanced playing field. Sports have rules and participants from any level – athletes, fans, media, etc. – have eagle eyes when it comes to pointing out when the rules are not being followed. Unfollowed rules make the game unfair, giving one side an unfair advantage over the other.
Simply put, the field NBA teams are playing on is not equal. It is not fair. It’s easy to say the rules in place under a soft cap are equal, but they depend on many variables. The most basic is how much is an owner willing to spend? It’s not a surprise that teams willing to spend more money have more flexibility.
What, did you think I was going to say “success”? To find success you have to spend the money wisely, which is a completely different topic.
The soft cap allows for so many possible exceptions and not everyone has the means to take advantage. Dallas won the NBA title this past season and spent $88.1 million on player salaries, about $18 million over the supposed deterrent of a luxury tax and $31 million over the salary cap. They – and teams like the Los Angeles Lakers – are willing to spend as much as possible, even if that means overpaying for players. They do it by means of cap exceptions – any team in the league could add a $5.8 million contract last season, scaled upwards at 8% each year. They can re-sign their own players for more money even if they are over the cap. They can make a trade and return 25% more than they send. Depending on their regular season success they can add first-round picks at anywhere from $1-5 million in the first year. They can use cash to acquire more draft picks.
All of these things are mechanisms that allow a team willing to write checks spending itself silly.
A hard cap would change all that. No team can spend more than X amount. Every team has to spend at least Y amount. Forget the exceptions of any kind. The only trade restriction would become a question of whether or not each team is still under the cap when it’s done.
And in the end, would it really be any different than it is now? Honestly? Today the salary cap, maximum salaries, and exceptions are variable every season based on 57% of basketball related income. Players get that amount (and yes, that percentage is a major focal point of talks, if they can be called talks) and 8% of their checks go into escrow every year to account for the variability of the season. That’s a fixed percentage, essentially creating a hard cap as a league.
Now, going around the league from team to team the spending is extremely variable, from the Lakers at the top to the Sacramento Kings at the bottom. The interesting part about all this hard cap debate is, essentially, it’s raising the bottom level and lowering the top level, forcing teams to spend more equally.
Surprise! There already IS a hard cap!
Putting teams on a level playing field, where how much a team spends is no longer a variable. More emphasis will be placed on getting the right players who fit the right system, rather than on spending every single dollar they possibly can.
One of the myths about a hard cap is players will no longer be paid what a free market deems they are worth. Well, the current system doesn’t either. Player values are inflated at times based on relative availability of like skills (one example is Joe Johnson’s contract with the Atlanta Hawks – they had to pay him because they couldn’t replace him), and they are deflated based on already existing caps (some players are worth more than their team can give him, such as Kobe Bryant with the L.A. Lakers or LeBron James in Miami).
A hard cap has not slowed down the big contracts in the NFL or the NHL. The NFL has had a hard cap since 1994 and every year stars – and non-stars – get paid big money (teams are required to spend at least 90% of the annual cap number). It doesn’t even slow down the ridiculous overpriced deals (Peerless Price comes to mind – so does Santonio Holmes). Players still get paid, but the difference is they may not be able to stay on the same team and make the same money, forcing teams to make decisions on who they want to keep or not, decisions NBA teams haven’t had to make because their cap exceptions don’t make it necessary. The NHL added their hard cap in 2005 after losing an entire season, but that also hasn’t kept stars from getting paid.
After all of that, it really does just boil down to some terminology and a question of competitive balance. The hard cap across the league has always been there and won’t go away. Instead, it’s just putting all teams on the same playing field. A soft cap promotes competitive imbalance, but allows a team to keep their players for as long as they wish.
That’s what the hard cap issue boils down to, a simple question of competitive balance. There will be debate on where any kind of cap settles, but that’s a direct result of the negotiations of basketball related income, not a hard cap itself. We already have that – we’ve just been calling it something else.
There you have it; the experts have sounded off. Convinced? What do you think – hard cap or no hard cap? Drop your thoughts in the comments section below!