NBA Salary Cap Chat With Larry Coon 4/18/12

1. Chris

   Hi Larry. How did NBA contracts come to be guaranteed? Doesn’t it seem absurd to pay someone millions of dollars in anticipation of performance and to not be able to fire someone if they don’t perform? Ex. Eddy Curry, Greg Oden, Lamar Odom, etc…

   • Larry Coon

     There’s no rule saying contracts HAVE to be guaranteed (with few exceptions). It’s the law of supply and demand at work — when supplies dwindle demand goes up, and prices rise. Free agents go to the highest bidder, and in the case of most NBA players, bidders are willing to guarantee salary.

     They had the opportunity to do something about guarantees during the labor negotiations last year. The owners floated the idea, and the players were dead-set against any guarantee reductions. Given the bigger issues that were in play (the overall economy of the league), the guarantees were a minor issue, and were swept aside in order to get a deal done at the last minute.

     As far as the league as a whole is concerned, the players’ overall share of revenue is the same whether or not they league has a few players they are paying not to play. So really, the salaries of guys like Curry, Oden & Odom aren’t coming out of anyone’s pockets except the other players’.

2. Splash

   So far as I can telling, Goran Dragic would perfectly fit the mold for what the Raptors should be looking for. A decent playmaker, ability to score with fair handle. Plus he’s european, which tends to bode well for the raptors as far as free-agency goes. Despite this I have not once seen anyone mention a possible link between him and the raptors. Dragic allows Calderon to be traded, hopefully for a piece/draft spot that can help shore up the wing positions.

   What am I missing here?

   • Larry Coon

     I agree — I like Dragic, and I think he’d be a good fit in Toronto. However, Calderon’s salary is still pretty high (over $10.5 million), so they’d want to make sure they can do something with his contract.

3. Josh

   Larry,

   Danny Ainge has said that he really likes the talent that is coming in the 2012 draft and almost traded Allen and Pierce for some draft picks. With that said, If the Jazz end up with either the GS pick and/or their own pick I think there is a trade coming on draft night consisting of Paul Milsap, Devin Harris, and GS or Utah pick for Rondo and Allen. Would you agree?

   • Larry Coon

     I can tell you for sure that’s not going to happen — Allen can no longer be traded since he’s going to become a free agent this summer. I think Boston will look pretty hard at blowing up the big three after this season, but I think they want to hang onto Rondo. Draft picks would probably be a big goal, but getting a high pick for an aging KG or Pierce alone might be a stretch.

4. Scott

   Do you think the kings will end up in vancouver?

   • Larry Coon

     The Maloofs are so fickle about this that it’s hard to predict where they’ll end up. I still think it’ll be Sacramento when all is said and done. If it’s going to be Vancouver then they’d have to present a compelling case to show why they’d be a preferable location to other alternatives, like Anaheim and staying in Sacramento.

5. rockets best fan

   hi larry
   my question is how much can a team be over the salary cap b4 they have to pay luxury tax, and as the cap decreases in 2013/2014 will that amount remain the same……..thanks

   • Larry Coon

     This year the salary cap is $58.044 million, and the luxury tax kicks in at $70.307 million.

     In 2012-13 both the cap and the tax level can go up (based on revenues), but they won’t drop below their 2011-12 levels.

     Starting 2013-14 the cap & tax level can go either up or down. They’re tied to each other, so if one goes up, so will the other, and if one goes down, the other will too.

6. Keith

   Larry,

   I know the Knicks has great bench depth this season. However, for next season would they be able to keep this team together? Or do we have any shot at landing Nash while keeping Lin?

   • Larry Coon

     The Knicks’ big problem is that keeping Jeremy Lin is a high priority, but they don’t have his Bird rights. They’re somewhat protected through the Gilbert Arenas provision, but they’d have to use their Non-Taxpayer Mid-Level exception to match any offers. And if they use their NT-MLE on Lin, they won’t be able to use it to lure an outside free agent like Nash (even if Nash would play for the Mid-Level). They can probably keep Landry Fields, because they have his Early-Bird rights, but they could lose both J.R. Smith and Steve Novak to free agency.

     Bottom line, they just might have to pick their favorite. If that favorite is Lin, then there’s not much else they can do with outside free agents.

7. Vinny

   Who do you think will the Miami Heat add or go after this summer?

   • Larry Coon

     They need more rebounding, and they need more of an everyday point guard. Trying to lure Nash would be an interesting prospect.

8. Dan

   How is the new FAQ coming along? Can’t wait until it’s ready!

   • Larry Coon

     Thanks for asking. It’s coming along really well, and the end is finally in sight (although still a little ways off). Here’s a status report:

     1. Review the new CBA, note all changes, make sure I understand everything. DONE

     2. Review the existing FAQ, revise every question as needed. DONE

     3. Write new questions. 11/16 DONE.

     4. Review CBA again, making sure all important changes made their way into the FAQ. NOT DONE

     5. Re-write appendix (changes from 2005 to 2011). NOT DONE

     6. Re-do index. NOT DONE

     7. Various checks (all links, spelling, W3C validation, etc.) NOT DONE

     8. Review. NOT DONE

     Even though I’m only on step 3 of this list, by far the bulk of the work on this project is in steps 1 & 2.

9. Deven

   What’s the most a free agent can get on the market if they were to switch teams?

   • Larry Coon

     Except in a few cases (for example, see the Gilbert Arenas provision in my FAQ) a free agent can make any amount up to the maximum salary. The maximum is either the league-wide maximum or the player’s personal maximum (105% of his previous salary), whichever is greater.

     Of course, just because a free agent can make that much, it doesn’t mean the team has the means to offer that much. If the player switches teams and signs as a free agent, the team that signs him has to have sufficient cap room for his salary.

10. Ben Wachsman

    Looking back on it, would it have been possible for the Mavs to re-sign Tyson Chandler last summer and still have room for Deron Williams this summer? Obviously the goal was Deron + Dwight, but with that out of the question could they have brought back Chandler?

    • Larry Coon

      Chandler will make $13.6 million next season, essentially for Andy Rautins, who will be off the books next season. If we assume they use their Amnesty on Brendan Haywood and dump Lamar Odom, they’d have about $53.1 million on the books this summer if Chandler was still a Mav. The cap will probably be about $58.1 million again, so no.

11. devonte

    it was thought that the knicks would buy a late first round pick in the 2011 draft, do they buy one this year or even trade for one?

    • Larry Coon

      it’s certainly possible — this year’s draft is going to be a better one than last year’s.

      But the dynamics of buying draft picks has changed. The limit for cash in a trade is no longer $3 million per trade — it’s now $3 million per year. Teams now have to be much more careful with the money they’re throwing around.

12. Harrison

    When will you update cbafaq.com with the new collective bargaining agreement?

    • Larry Coon

      Hopefully the launch date will be within the next month.

13. RaptorFan

    Hey Larry,
    this is about the new CBA.. There seem to be a lot of new stuff in there that protects the owners from themselves, bad trades, awful contracts ect. but doesn’t feel like there much protecting the players. Plus the players always get the bad rep for leaving when they can. I like that Carmelo took the reigns and demanded a trade rather than be shipped out like they did Deron williams. Just saying i know its a business but it rarely feels fair for the players its like the dices are loaded against them, how does the CBA look after them?

    • Larry Coon

      The players, for the most part, all have guaranteed contracts. That means if they fail to perform (hello, Lamar Odom), they still get paid.

      In addition, the players are guaranteed a large chunk of the gross revenues (a little over 51% this season, and around 50% starting next season). The owners pay ALL the expenses out of their chunk. So if after paying the players their guaranteed amount and paying all the expenses of running the league there isn’t any money left over, they take a loss — while the players’ share is tied to revenues only without regard to expenses.

      So I think the players are taken care of pretty well.

14. Raptor Fanatic

    What do you think will happen in Memphis with Rudy Gay? They are over the salary cap for next year with little front court besides Gasol and Randolph and OJ Mayo is a RFA. Even after filling out their roster with minimum contracts (forget re-signing Mayo for a moment) they are going to be dangerously close to the luxury tax.

    Do you think they trade in Gay to get a deeper roster?

    • Larry Coon

      I think they overpaid for Gay, but they knew they had to do it. I think they have looked at trades for him, and will continue to do so, but certainly won’t dump him just to move him. I don’t think there’s even a 50/50 chance they’ll end up moving him.

15. CanadienFan

    What’s stopping Montreal from having our own basket ball team!? Anything stopping the Maloofs from making a deal with the Molson Family?

    • Larry Coon

      I assume you mean luring an existing franchise to Montreal, rather than starting an expansion team? For a team like the Kings, it’s a matter of weighing how well it’ll work out in Sacramento, versus how it will work in any alternative city. Plus you’d have the unknown of assessing how well NBA basketball would work in the hockey-obsessed city. I think a city like Anaheim is more of a sure thing (even though they’d share the larger metropolitan market with two other teams).

16. Ali

    Hi Larry. It lokos like not even the Lakers are willing to pay the new super luxury tax. I think the new CBA stinks because not only did the Mavs have to break up their core, OKC will have to do the same. Any chance they go back to the old dollar for dollar penalty in the next CBA?

    • Larry Coon

      I think the progressive tax is here to stay. The league really wanted to level the playing field between big-market and small-market teams. The progressive tax and revenue sharing were their solution. You’re right — it will make it very, very difficult for any owner to afford a stacked team. Better for small market teams and better for parity, but not such a good thing for fans of the teams that get broken up.