NBA Salary Cap Chat With Larry Coon 11/2/11
Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the ongoing CBA talks at 3:00pm
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NBA Salary Cap Chat With Larry Coon 6/21/13
Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the new CBA at 3:00pm
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Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the ongoing CBA talks at 3:00pm
more from Larry Coon
NBA Salary Cap Chat With Larry Coon 6/21/13
Larry Coon the noted author of the CBAFAQ, will answer your Salary Cap and Collective Bargaining Agreement questions. Larry will answers your questions about the Salary Cap, NBA trades and the new CBA at 3:00pm
Alec
Hey larry, i’ve asked you questions before and you never answer them. Well last question for you from me. If the players lose 100+ mil in november, what happens in the lawsuit between the cities sueing the nba? Who wins that and why?
Larry Coon
I’m not sure how the two are connected, except for the common cause (the lockout). And right now there is no such lawsuit, as far as I’m aware. It’s just that cities like Memphis are exploring the idea.
The winner of such a lawsuit would be decided in court. I could see it being decided either way.
Kyle
Hey Larry, if the new CBA restricts spending would LA be at a big disadvantage having Kobe’s salary on the books? He makes several million more than any other superstar because he’s a 15yr vet. I think contracts should only count against the cap/tax up to a certain amount (like the max for a 8th or 9th yr player) so not to punish/restrict teams whose players have remained effective (max) players into their 30′s.
Larry Coon
You do have a point — that a max-level player who continues to play well into his 30′s will have a higher salary, and their teams will be penalized cap-wise for having such a player on their roster. I think it’d be reasonable to do what you suggest — limit the cap hit for these players to the league-wide max. They do something similar with minimum salaries, after all — the cap hit for a minimum-salary player is never higher than the minimum salary for a two-year veteran. They do it precisely to avoid giving teams a disincentive from signing older players.
If one of the rule changes the league is supposedly asking for goes through, then this problem will take care of itself — but to the players’ disadvantage. The league wants (or at least wanted) to take away the provision from the maximum salary rule that provides players with a “personal” maximum — 105% of his most recent salary. The reasons guys like Kobe and Dirk can re-sign (or extend) for more than the conventional maximum salary is because of this 105% rule.
If the new CBA eliminates this provision, then these players won’t be able to sign for more than they made in their previous contract. They’d be taken back down to the leauge-wide maximum salary level.
Brian
At this point, is all about a power struggle and the players not ‘giving in’ to a 50/50 BRI split? I know its not really a 50/50 revenue split with the exceptions the owners can take off the top, and that the next CBA will start at 50/50 for negotiating purposes but at some pt if the players would take 51, isnt time to take it at 50? Same for the owners, dont they just want to ensure this gets painted as a ’50/50′ split to the casual fan?
Larry Coon
No, it’s not just about a power struggle, or about the sides’ ability to save face. I think the two sides are farther apart than a lot of people would like to believe. The BRI split and the system are intertwined — the higher the split, the more restrictive the system has to be, and vice-versa.
The reason the last negotiating session ended so abruptly is because the sides negotiated on system issues, coming close to an agreement on a system that would allow the players to go to 50% on the split. But then the league said they couldn’t do that system with a 50% split — they backed their offer on the split back down to 47%. This is what David Aldridge said about it on NBA.com:
In addition, Derek Fisher made comments about not being sure whether the owners were at 50 or 47, and Hunter talked about being “snookered.” It’s also why the sides didn’t finish-off the agreement after supposedly being so close. It’s because they’re not so close after all.
The league is offering 50%, but only when attached to a very restrictive system — a system that is unacceptable to the players.
I think if there really was an offer on the table that provided a 50% split with a system the sides had negotiated — including acceptable compromises on the remaining system issues — the players would take it. It might be work on Hunter’s & Fisher’s part to sell it to some of their hard-line constituents, but I’m betting it would get done.
The problem is, that offer isn’t on the table.
David
Larry, why doesn’t the proposed amnesty rule allow for prudent teams with no bad long-term contracts (like the Rockets, Thunder or Pacers) from trading for another team’s pre-existing contract and then using the amnesty on it? This way, those teams’ prudence can still be rewarded. To not allow this would be to unnecessarily punish the smarter teams, especially since all 30 teams knew we were heading for this situation for over two years!
Larry Coon
I guess how you feel about that depends on how you view the amnesty provision. Its purpose is supposed to be an accommodation that allows teams to adjust to the impact of rule changes. Teams made their roster decisions under the previous CBA, and therefore under the previous cap and tax rules. It’s possible their decisions would have been different had they known the league was going to change those rules. The amnesty is an accommodation allowing these teams to adjust. If a team doesn’t need the accommodation, then they have no right to the provision.
Continuing the “accommodation” viewpoint — think about workplace accommodations to people with physical disabilities. We provide them, but most people don’t need them. We don’t have the right to say, “hey, they get special accommodations, so we want something too!” An accommodation goes to those who need it, and that’s all.
So some of the ideas being pitched for the amnesty provision go against the spirit of the rule, in my opinion. One of them is the ability to save it and use it later, on players teams haven’t even signed yet. The other would be what you suggest.
Besides, what good would it do for a team like the Thunder to trade for players like Gilbert Arenas, just so they could amnesty them? They’d still be stuck paying the player’s full salary. Essentially you’re saying that these teams did well, so they should be allowed to pay for another team’s mistakes.
David
Larry, any word on how partially or non-guaranteed years on players’ contracts will be treated for cap and payment purposes under the Stretch Exception? I would think that if a year is non-guaranteed, it wouldn’t count. Partial guarantees make it tricky, though.
Larry Coon
No — it’ll be the same as it was in the previous agreement. If a player is waived, only the guaranteed portion of his salary is owed — that’s the whole point of guaranteed salary, it survives the termination of the contract.
With the stretch provision the player still needs to be waived, and therefore is still owed just his guaranteed base salary. It’s just that the cap hit on that amount is stretched over a longer period.
Jelani
Can’t a player on his rookie contract potentially make up the lost salary from a couple of months now on the difference of the full value of a max contract under a 52% bri as opposed to a under a 50% bri. Or the mle for that matter. Meaning many players outside of Garnett and kobes it could be worth it in the long haul
Larry Coon
The longer you will be in the league, the more ability you have to recoup current losses, yes.
Conversely, with the average career being about 4.8 seasons long, most players being locked out will NEVER recoup their losses. They already wiped out their ability to recoup their money this season. By mid-December they will lose the ability to make it up over six seasons.
Individual players will lose in this lockout. But to the players’ credit, the struggle isn’t so much for these individual players, it’s for the players as a whole — both current and future players.
Anthony Sanchez
It’s been said the salary cap for the 2012-2013 will be around $61 million. If that were the case, were would the tax threshold be?
Larry Coon
The best info I have right now is that the cap will be frozen at $58 million and the luxury tax threshold will be frozen at $70 million for two years. After that they will be tied to average team spending levels — the cap about five BRI points below average team salary levels, and the luxury tax about three BRI points above.
Nick
Who are the first player to sign with new teams once the lockout is over? And to what teams
Larry Coon
Once the lockout is settled and the new agreement is ratified, teams are going to have to rush to sign players. There will be very little time before the season starts (maybe two weeks), and training camps will already be underway. There’s no way to predict who would be signed first in such a scenario — except generally, free agents who are “looking around” would likely take a little longer than players for whom re-signing with their previous team is a given.
Anthony
If a player were to voluntarily retire, but was signed for say, 2 more seasons, does the club still pay his contract, do they not pay but still incur the cap hit, or does it just disappear?
Larry Coon
If a player retires with guaranteed salary left on his contract, he still gets paid — but if he’s paid, he’s expected to report. The team & player usually work this out by agreeing to a buy-out — he’s paid less money, and doesn’t have to report. For example, Rasheed Wallace did this with Boston, and there are many other examples.
Players can also voluntarily, formally retire by filing paperwork with the league, in which case their contract is cancelled and the player doesn’t get paid. Jason Williams did this with the Clippers in 2008.
The other possibility is that the player is forced to retire for medical reasons. He is still owed his money (often paid by insurance), but after a waiting period the team is allowed to apply to have his salary taken off their cap.
Karl
I’ve been reading too many articles about the lockout and some include merit of fighting over 2.5%. They will say it makes no financial sense but they all end up low balling the figures.
Have you noticed a bias against projecting long term effects(10 yrs seems reasonable not 6 or 7) and ignoring any type of growth?
Larry Coon
People want to talk about the negotiations by boiling the dispute down to its simplest terms. It’s easy to put it in terms of the highest percentage the league has floated (50%) and the lowest percentage the players have floated (52.5%, maybe 52%) and say “this is how far apart they are.” But neither of those numbers exist in a vacuum — they both come attached to certain system changes. They’re farther apart than many people would like to believe they are.
And yes — the players are also worried about the long-term effects. The next negotiations start up where the current agreement leaves off, so if they agree to 50% this time, then the next negotiations will start at 50%. And if the league doesn’t fix the non-player-salary problems that led to them losing money, the league will be saying the same thing they’re saying now — that the system isn’t sustainable at the current percentage, and the players need to take less.
sam rose
roy what are his chances to end up with bull ?? could be a great move and take the bulls next level??.
Larry Coon
If the Blazers cut Roy, there are a number of teams he could end up with. The Bulls are one of them, as are Miami, New York, and a few others.
Would he take the Bulls to the next level? It’s no secret that they need a consistent scorer on the wing, and we wouldn’t be having this conversation at all if Roy didn’t have bad knees. He won’t take the Bulls to the next level if he can’t stay on the court and contribute the way he could when healthy.
Karl
How can the NLRB impact the CBA negotiations? Do the players have to do anything further, desertification, or are they just waiting(hoping/praying) on a favorable ruling at this point.
Larry Coon
This is a longshot, but if the NLRB finds that the league negotiated in bad faith, they could ask the court for an injunction lifting the lockout.
Mike
Hi Larry,
I don’t understand the revenue divide works. For example, if revenue is 1 billion and is split 50/50. Does this mean that the total salary of teams can’t go over 50% to the players? What if every team spent 100 million on players this would mean a higher percentage would go to the players
Larry Coon
Basically. Let’s use a little more realistic example — say the total revenue is $4 billion, and the players’ split is 50%. The players are supposed to make no more than $2 billion. But here’s the basic problem with this system — the contracts are signed before the season, and the revenues aren’t known until after the season. There’s no way for 30 teams, signing players independently, to exactly hit that $2 billion number, and even if they could, they have to do it nine months before that number is known.
This is what the escrow system is for. They don’t pay players their entire salary during the season — they withhold a little, just like they withhold money for taxes. In fact, the system works a lot like taxes do — they withhold an estimate of how much tax you owe. If it turns out they withheld too much, then you get the remainder of your money back (a tax return). With the escrow system they withhold a percentage (it was 8% last season). At the end of the season (when revenues are known) they see how much of the escrow (if any) they have to give back to meet their guaranteed split, and they pay it back to the players.
For more information on how this works, see my FAQ, Question number 15: HERE
A few days ago David Stern made reference to guaranteeing players would be paid the full value of their contracts, even if it means going over the designated percentage of the revenue split. He apparently meant that the 50% split applied to the entire agreement, and not to each individual season — so if the league goes over one season, they’ll set the bar lower the next season. Henry Abbot talks about this HERE.