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 upcoming CBA talks.
Susan in Los Angeles:
Now that its known the Lakers won’t run the triangle. How do you think the combo of Derek Fisher and Steve Blake will fair in the upcoming season? Do you believe the pg situation will impact the Lakers seed in the West?
Welcome to the chat, everyone! Last one before the lockout, so I can imagine what most of the questions are going to be about.
And sorry for starting off the chat on a down note (as if they NBA doesn’t have enough down notes already), but I need to begin with a rant — or a request — take it whichever way you want. Hoopsworld has been blanketed recently by people who ask the same questions in everyone’s chats. For example this question from Susan was asked and answered yesterday in Eric Pincus’ chat.
Our chats receive many more questions than we can answer in an hour, and we do our best to get to as many people as we possibly can. Blanketing chats with the same questions only means that others’ questions are less likely to be answered. At best it costs us time as we’re distracted by determining whether a question has been asked already. At worst it means that a few people will have the same question answered multiple times, while others don’t get their questions answered at all. Please have respect for your fellow fans and readers of Hoopsworld — if your question has been answered, then don’t ask it again in someone else’s chat.
Wile E Coyote in Rochester, MN:
Hi Larry. How about a regressive luxury tax? If cap was 60, 60-65 taxed at 100%, 65-70 at 150%, 70-75 at 200%, etc. Put tax dollars in revenue sharing pool so small market teams don’t have to choose between a competitive team and receiving tax $$.
The luxury tax is in indirect means of revenue sharing. It starts with the premise that the big market teams will tend to spend more and the small market teams will tend to spend less, so distributing money based on salary will help level out the playing field. (It certainly doesn’t do much to dissuade spending by the big-market teams.) Since the league intends to greatly increase the amount of revenue sharing and harden the cap in the next agreement, I expect the luxury tax to go away.
Joe in NYC:
We don’t know what the salary cap will look like but do you agree with the Knick’s strategy of signing only one year contracts with the hopes of landing a third star or should they just fill in the holes with complementary players?
To a certain extent, landing a star player is akin to lightning striking. If they hold out for another star, it may not happen. I think they’re better off filling their holes as best the can.
Cory in Aurora, IL:
If there’s a 50-game season again, will there be a trade deadline next spring, or will whatever rosters teams assemble when the lockout ends be their team for the rest of the year?
I’m sure there would be another trade deadline. The all-star break would be eliminated, but other than that, it’d be just a compressed version of a normal season.
Joel in Dallas:
Is there any legal reason why the players, once locked out, couldn’t form an independent league? Play in smaller cities, use a TV contract to play members.
Starting a new league is a tougher prospect than you might think. They’d have to find arenas to play in, and remember, most of the best arenas already have contracts with the NBA. They’d have to find financial backing, and the investors would have to be willing to risk their money, knowing that if the NBA lockout ends or the NBA makes a go at it with replacement players, their investments are in trouble. The same goes for advertisers.
So is it possible? Yes. But is it likely to happen? I don’t think so — at the very least, not unless the season is canceled.
David in Cincinnati:
If the owners are going to win, as everyone says they will, why have a lockout? Is a bad deal for the players worse than a bad deal AND losing a season’s pay?
Reminds me of that line from Gladiator:
"People should know when they’re conquered."
"Would you, Quintas? Would I?"
I don’t think anyone harbors any illusions that the players are going to come out of this with a better deal than they have now. The only real question is how much they’ll be able to preserve. At some point, choosing the deal on the table will be better for them than choosing to prolong the work stoppage. At that point, we’ll have a deal.
Eddie in Maryland:
If there is a franchise tag in the next CBA, do you think it will have the exact terms of the nfl or will there be subtle nuances between the two?
More than subtle. The NFL’s system is a form of restricted free agency. Once the team chooses to franchise-tag their player, he’s not free to leave.
The NBA prefers to have a system that encourages players to stay, rather than preventing them from leaving. Their franchise tag proposal was more akin to glorified Bird rights — allowing the team to re-sign the player for much more than he could receive by changing teams.
James in NJ:
If the owners want a lock out i would let it happen if i was a players. The advantage goes to the players certainly if a superstar signs a one year deal over seas. David Stern and the owners would crumble.
I disagree with you for a number of reasons.
One is that the league could easily withstand the loss of one player — even a superstar. And the FIBA leagues aren’t in a financial state to either give players comparable money or sign enough of them to make a difference. Also remember that a player under contract can’t get a necessary Letter of Clearance to play in a FIBA league (at least, not without a court battle), so at beast you’re looking at the exodus being limited to the 2011 free agent class.
The longer this goes, the more the advantage shifts to the owners.
Ralph in :
If Owners and Players are willing to sit out a season. I am willing not to watch or talk about Basketball. The rich get richer, the people that make these people way over paid suffer! They had how long to get this in place, it makes me sick.
This is precisely the cost of a lockout — the alienation of fans.
The same thing happend in 1998-99, and when the lockout was settled David Stern admitted "We have some winning back of fans to do." The effects were felt for 4-5 years, but eventually the fanbase did come back.
This year the league will have to weigh the repurcussions from a continued lockout against the long-term gains they will make. If they make a deal just to get it done, they’ll alientate fewer fans, but the financial implications will be felt for many years. And remember, one agreement alwys feeds into the next, so any gains they make will be felt for a very long time. For them, it’s worth the short-term alienation of fans to get a better deal.
Justin in Bradford:
Everyone in Orlando is VERY worried Dwight Howard is going to leave. If you were the GM of the Magic (and you would probably be better), what moves would you make to keep Dwight happy?
I don’t know if that’s possible. The team rolled the dice by acquiring Gilbert Arenas and reacquiring Hedo Turkoglu. Neither player really panned out, and now they’re stuck with them. Improving their roster is going to be a lot more difficult with those two players there.
The other thing to consider is that Howard may have already played his last game for the Magic. If there’s a year-long lockout, then Howard will be a free agent next summer without ever suiting up in 2011-12. The team needs to weigh this possibility when deciding what to do.
In the end, I think that if he was going to sign his extension he would have done so already. I think we have another Carmelo Anthony situation on our hands. It just depends on how picky Howard is about his destination.
Eddie in Hoboken, NJ:
IF the season is missed, what are the viable options that YOU can think of for a draft for the following year? With so much talent coming out in 2012, it will be pretty important..
I know the NHL had to deal with this situation, and came up with a solution that worked for everyone. I’d do something based on what they did.
Of course, you can’t just repeat the 2011 draft order — that’d be "rewarding" teams twice for the same bad season. Some sort of weighted lottery involving all 30 teams is probably the best solution. I think this is what the NHL did.
But if you want to know what I really think is the best solution for determining the 2012 draft order, it’s for the teams to play a full 82-game season to work it out.
Eddie in Hoboken, NJ:
Do the Hornets have to be sold first before a Chris Paul trade is possible? I cannot imagine "the league" aka Stern selling off the biggest asset of the club and rebuilding, even if it meant he went to his favorite team (and mine) the Knicks?
No. From what I understand, the league put a steward in charge of the franchise, and while he has to have financial moves approved, he has atonomy over basketball decisions. I don’t think the league would stand in the way of a trade that Dell Demps and the other Hornets’ management feel is best for the team.
Larry Anderson in Tremonton,Utah:
Read your chats all the time and enjoy them. When anyone has a question on salary I tell them to look in on your chats for the real answer. Just wanted to say thanks..
Nice to hear — thanks!
marvin in aurora,il:
what kind of cap are the players looking for and is the league trying to prevent superstars from teaming up on one team to win it all
The players want something similar to what they have now. They’re willing to give up a little, but nowhere near the level of cuts the owners are asking for.
And no, I don’t think they’re particularly concerned with the superstar team-ups. The stars have to align just right for that to even be possible. And for what it’s worth, it certainly did generate interest this season.
Janes marosek in Orlando:
What can the magic do to their roster to keep d-12 in magic kingdom after the new rules
Depends on the new rules, of course, and nobody knows what those will be yet.
But if anything, I think the new rules would make it harder for the Magic to keep Howard, not easier.
colonel appleseed in queens, ny:
I don’t ever see the players bending on unguaranteed contracts, but I eventually can see them agreeing to a hard cap with a high enough BRI%…your predictions?
If anything, the players have been adamant about not having a hard cap. Derek Fisher even dismissed the idea of the league’s "flex" cap when he said, "We view that as just a total distortion of reality. It’s not a flexibile cap, it’s a hard cap." In the end, I think we’ll end up with a "harder" cap (i.e., fewer and less powerful exceptions), but not a true hard cap.
The owners have already given up on the idea of non-guaranteed players, which is another point that’s very important to the players. And if anything, I think the owners giving up on this so early in the process signals that they will eventually have a soft cap. A hard cap and guaranteed contracts don’t really go together. If they were going to hold firm to the idea of a hard cap, then they wouldn’t have given up on guaranteed contracts so early.
Sam in Los Angeles, CA:
The Clips have lots of trade assets: Kaman’s expiring deal, Minnesota’s 2012 pick, Bledsoe/Aminue, and even Gordon. Any chance they are a contender in the Dwight/CP3/D-Will sweepstakes?
From what I hear, they’re willing to give up Minnesota’s pick if it means landing a superstar. Howard would certainly qualify, and I can’t see the Clippers passing up any opportunity to go after him. I also heard the Clippers pitched the pick to New Orleans as part of a package for Chris Paul.
Kaman can be had in return for the right small forward. For example, they tried to complete a deal with Philly for Andre Iguodala. They weren’t inclined to sweeten the deal with any of the other players you mentioned, but if they did, I imagine that Aminu would be the most likely to go. Bledsoe would be harder to pry away, and there’s almost no chance they’ll move Eric Gordon.
Joaquin in West Covina:
Andrew Bynum was suspended for 5 games, with not pay. Are the Lakers save that money next year?
No, the money goes to charity.
Jonathan in :
Would contract years be taken off if it year is lost because of a lockout? Idk why it would because thats essentially saying theyre getting payed their salary. If they do, why???
The contracts end when they say they end. So for example, if the lockout lasts the entire season, then Dwight Howard is a free agent on July 1, 2012 without playing another game for the Magic.
Tim in Phoenix:
Will the new CBA affect the Rookie Salary Scale?
From what I hear, the owners are trying to reduce the rookie scale salaries. But I don’t think it’s anywhere near the top of their priority list.
Pat in Chicago:
If a new CBA is worked out, how long does it run? Should we expect to go through this mess again in a few years?
The owners have asked for a 10-year deal. Their latest offer was to leave salaries around $2 billion per year, so as revenues go up from year to year, they’ll make a lower and lower percentage. Under that system, it’d take 10 years to get salaries down to the levels they want them to be.
The players, for obvious reasons, don’t like that idea. They proposed a five-year agreement — timed to expire the year after the league renews its TV deals.
Chad in Chicago:
Larry, Why do they wait until the CBA expires to negotiate…cant they implement changes over the course of years. Why wait until the year it expires to all of a sudden explore changes?
They’ve been negotiating for two years. But without the pressure there’s no reason for either side to move on any important issues. If anything, it makes it worse. It gives both sides ample time to dig in their heels and refine their rhetoric.
Ed in New Orleans, LA:
Mr. Coon, what are the sides trying to accomplish in the meeting on Thursday? Obviously avoiding the lockout I would assume, but what will specifically be in the agenda?
I think that if there was any realistic hope of an agreement before June 30, we would have had many more meetings this week. I think Thursday will be primarily for both sides to look at each other and say, "So this is where we stand, huh?" and then go talk to the press & blame the other side.
Jay in Charlotte, NC:
I don’t understand why Thursday night is such a huge deadline. I’ve heard the owners will take their deal off the table if they can’t come to an agreement before the current CBA ends. Why?
As soon as a lockout starts, it begins to cost the league money — advertising dollars, season ticket sales, fan goodwill, etc. The offer changes on July 1 because the economics change on that day as well.
James in Miami, FL:
I have hard time believing the owners really want a hard cap. Would they really create a CBA where teams over the cap like Miami, Dallas or Lakers would only be able to add min. level talent?
The frist thing that came to mind when I saw your question is that there are 27 teams not like Miami, Dallas or the Lakers.
The league wants to level the playing field and have much better cost control. A hard cap is the most effective way to get that done, despite the difficulties it would pose to the teams you mentioned.
But in the end, I think we’ll have a system where the cap is harder, but not a true hard cap. There will still be exceptions, but there will be fewer of them and they’ll be less powerful.
JC in LA:
If you had to guess, where do you think the NBPA and the owners will settle on the percent of revenue that goes to the players in the next CBA?
It’s not just a question of the percentage — it’s also what it’s based on.
One of the league’s arguments is that the players receive a guaranteed percentage of the gross income, but don’t share in the expenses. So when both revenue and expenses go up, the players reap the benefit without sharing in the burden. They want a system where expenses are taken out first, then the sides divide up what’s left over.
So you couldn’t compare the percentage guarantee in such a system to the current 57% guarantee of gross revenues in the current system. But if you were to do a comparison to a comparable figure, I’m guessing it’ll eventually end up in the mid to high forties.
cm in la, ca:
Seems like the real issue with the CBA is the amount $ paid to the top players. When current contracts run out, why not pay them a max of 25% of the cap and call it good.
From a pure data perspective, you have a point. If you rank the players by salary and divide them into three groups, the ranges are $0-$1 million, $1-$4 million, and $4+ million. There are about the same number of players in each group.
The $0-$1 million group accounted for about $82 million in total salaries this season. The $1-$4 million accounted for about $378 million, and the $4+ million group accounted for about $1.556 billion. This is why I think any salary rollbacks will be staggered — it will take less out of the low wage earners, and progressively more the higher the salary gets.
But the counter to your argument is that the top players are responsible for most of the revenue. Fans don’t buy tickets, turn on their TVs and buy merchandise to see the rank-and-file players. They do it for the starts. Kobe Bryant earned about $24 million this season, but he’s one of the primary driving forces behind the league’s $3.8 billion income this season. Since they’re the guys who primarily bring in the money, the argument can be made that they deserve much more of it.
That’s it for today — As always, thanks for the questions and apologies to those I missed.
Look for more from Larry Coon on Twitter at http://www.twitter.com/LarryCoon, become a fan of the Salary Cap FAQ on Facebook, and find the FAQ itself at http://www.cbafaq.com.