Salary Cap Chat With Larry Coon 7/13/11
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 upcoming CBA talks.
Could the new CBA actually help the HEAT more than most? If it features higher roll backs for top earners and a ‘star’ tag that doesnt count towards a hard cap would this not put them in a better position than they’re in currently?
Larry Coon:
It’s Week 2 of the lockout. Let’s talk about it.
Brendan — first, keep in mind that any specific components of a new CBA, like salary rollbacks and a hard cap, are only parts of proposals. We have no idea of knowing what will or won’t be in the final agreement. Your question assumes a number of these things:
1. A hard cap
2. Salary rollbacks (based on salary level)
3. A franchise tag
4. Franchise-tagged players will be exempt from the hard cap.
In the end, I don’t think we’ll see a real hard cap. I think there will be rollbacks (unless the players agree to an alternate proposal that locks in wages at their current levels for a long time). I’m about 50/50 on the idea of a franchise tag, and if there is one, I don’t think it’ll make the player cap exempt (or be usable on more than one player at a time).
So I don’t think any system we have a realistic chance to get will stack the deck in any way that would help the Heat — or at least, in any way that doesn’t help lots of other teams equally.
Hi Larry, The CBA limits player contracts to a maximum annual amount. Stars do well on the side advertising products. But if NBA itself paid LeBron or Kobe for their value to the league, what sort of money would that be? $100M, $200M?
Larry Coon:
You could argue (in fact, I think Bill Simmons DID argue) that you can compare it to movies. The headliners get the big bucks, a percentage of the gross, etc. The mid-level stars get a reasonable amount but a lot less than the stars (i.e., you’re not a max player, Joe Johnson), and the bit players get bupkis.
Hello Larry, If Portland keeps Camby, and Oden miraculously stays healthy, they have a formidable front line and talent 1-5 plus a reasonably good bench. Can that team get to WCF this year or next?
Larry Coon:
That’s a lot of "ifs," and I think you’d have to add Brandon Roy coming back near 100% as well. But yeah, injuries aside, this ptoentially is a very good team and would be in the mix in the west.
Hi Larry. You said that any shortages of players’ salaries below 57% of BRI will be paid but yesterday’s report of total salary dropping down below 57% does not mention this issue. If the 57% is floor AND ceiling, no one can argue owners overpay
Larry Coon:
You’re right, it didn’t mention that issue. It also said the audit wouldn’t be done until later that month, so I’m guessing Steve Aschburner (the author of that piece) just talked to someone who told him "the players will get all their escrow money back."
The owners are DEFINITELY arguing that they ovepay. The central point of their argument is that as non-salary expenses rise, it comes entirely out of the owners’ 43 percent, and none of it comes out of the players’ 57 percent.
Hi Larry. Lots of people, like Berger from CBS, have been posting their suggestions on ending the lockout. Have you read any you thought looked reasonable? And do you know if either side (NBA, union) reads/gets ideas from them?
Larry Coon:
A lot of the articles that have come out really haven’t accurately assessed the situation, so I imagine the two sides won’t get all that much from pieces that aren’t firmly based on the underlying reality.
Rather than spend my time coming up with nebulous proposals, I’m trying to devote my energy to figuring out what’s really happening, and what’s really the root cause of the disagreement. I think I’m getting closer, but not close enough to really tell what potential solution would be "reasonable."
Now that the players received the money previously in escrow, do you expect the lockout to go longer than you initially thought?
Larry Coon:
The less money the players have, the more they’ll be hurting. I think the labor dispute will eventually go the owners’ way, and I think it’ll take until the players really start hurting before that will happen. So yeah, it’ll better equip them to withstand the work stoppage.
What happens with the NBA draft if the season gets canceled? Would it be the same picking order? Or a re-lottery?
Larry Coon:
I cover this question in my lockout FAQ, which you can find here.
Larry, can teams trade players during a lock out?
Larry Coon:
No. The CBA defines the trade rules. With no CBA there are no trade rules, and therefore no trades.
What is the point of the rule disallowing a player to be re-traded as part of a group of players for a certain period of time. What loophole is this intended to close? Seems so artificial (since the player can be re-traded alone).
Larry Coon:
You want to make a trade, let’s say it’s your guys Player A and Player B, and you want to acquire some other team’s Player C. Only A and B don’t make enough to trade for C, so you trade A to some other team for Player D, were D and B are enough to trade for C.
In other words, they don’t want you doing trades where the sole purpose is to acquire a a player you want to package in another deal.
i know, there is no sense of urgency on either side to get to the bargaining table, and there will only be pressure when we approach training camp later in the year, but from a fan’s perspective, this nonchalance is making me angrier!
Larry Coon:
Yeah, they were supposed to be metting around this week. As far as I’m aware, new meetings aren’t even scheduled yet.
On the other hand, if both sides are as entrenched as they were on June 30, then what’s the point in meeting?
Is a kind of "credit system" possible and reasonable? For example if the "hard" cap is set at 60 million and a team spends only 55 million in 2012, that they can use the 5 million left over the next maybe 5 years. No pressure of wasting capspace.
Larry Coon:
Yeah, I’ve heard that idea a few times, and it has some merit.
Good afternoon Larry. What do you think will be the biggest concession by the Players? The Owners?
Larry Coon:
Everything is really about the money that goes to the two sides. With this issue they’ll probably end up at some midpoint that both sides would consider to be a huge concession.
what would you say about a darko and beasley for kaman trade? at first i threw up in my mouth a little, but it frees up minutes on minny’s roster and secures a backup center and SF for LA
Larry Coon:
I don’t think the Clippers have any interest in that.
What’s the logic behind not having any talks? Doesn’t that just guarantee that this thing takes longer to settle? Labor and management should be meeting every day, eliminate all rhetoric, lay out the facts, and have the other side respond to that.
Larry Coon:
The problem is, they’ve done all that, and neither side has been swayed. At this point they seem to be set on taking some time before the next set of negotiations. Either they want to regroup, re-evaluate and come up with new ideas, or they want the other side to start hurting more. Probably a little of both.
Are the two sides seriously not even going to talk until there’s a real threat of missing games? Are both sides that convinced that the other will cave?
Larry Coon:
I think they’ll talk again before it gets that late, but they’re not going to meet just to meet.
Realistically, what’s the latest you could see the players holding out before they would be willing to cave into anything? I feel like the owners could go two whole seasons, if necessary.
Larry Coon:
At any point in this process, it’ll be a matter of choosing between the agreement that’s on the table or saying no and working toward a better one. The later it gets, the greater the cost will be of saying no. I personally think the scales will tip to the "yes" side as we get close to losing the season.
Assuming owners get close to what they want, which teams will benefit most from the new CBA?
Larry Coon:
Small market teams. There will be a much more level playing field for them to compete.
Hi Larry. Is the $160 million in escrow funds divided equally amongst all current NBA players?
Larry Coon:
Each player put 8% of his salary into the escrow fund. Each player will get his own contribution back.
What are the chances of there not being a season? According to sources it is very high but I want your take.
Larry Coon:
I’m guessing 50 percent that they’ll rescue the season just before canceling it (just like 1999), 40 percent they’ll cancel it (either because they miss the deadline or because the players decertify), and 10 percent they’ll agree before the last moment.
If a majority of players are ready to cave and accept the owners terms, can the NBPA stop the CBA from going to a players’ vote, denying the wishes of a majority of its membership?
Larry Coon:
As far as I’m aware it’s one-player, one-vote. If a proposal is on the table, I don’t think union leadership can prevent an election.
If the players cave and accept a lot less money and a 10-year CBA, and then the owners get a huge TV deal in 5 years, does that just embitter the players and assure an even bloodier labor battle next time out?
Larry Coon:
Probably. But here’s the thing. The owners originally proposed scaling back salaries immediately. They later proposed an alternative where they’d keep salaries near their current levels, but hold them flat over time — essentially reducing the percentage of salaries the players get over the course of the agreement, rather than doing it right away.
But you’re right — the new TV deals should give the owners an infusion of income, and the players are right to want to share in that. There’s probably room in the middle where the salaries are held flat, but if there’s a big infusion of cash then the players could share in it.
Hey Larry, do you think a canceled season would extend the careers of players who are getting older (i.e., Ray Allen or KG) by giving them a year off to rest? Or would it just put them out of shape?
Larry Coon:
A little of both. For guys with an intense work ethic and injuries (for example, Kobe Bryant), the time off would probably be beneficial. For someone like Tim Duncan it’s probably more a factor of age, so you wouldn’t want to see him miss any time while he can still play at a fairly high level.
Someone like Baron Davis would probably end up being this year’s Vin Baker or Shawn Kemp.
Deron Williams signed with the Greek team for $5M (some reported $200K/month) and other players show interests playing oversee. Do you think the Basketball USA will allow the contracts? And do you think the players will be satisfied with the money?
Larry Coon:
Players under contract would be able to sign in Europe unless USA Basketball issued a Letter of Clearance. I haven’t heard officially yet, but I assume USA Basketball did that, and the Letter of Clearance was only good as long as the NBA lockout was in effect. As soon as the lockout ends, then the players will immediately have to report to their NBA teams — hence the month-by-month deal for Williams.
I’m sure they’re not SATISFIED with the money, but hey, any port in a storm.
For players recovering from injury, do you think the league will repay them for costs (surgery, therapy, etc.) incurred during the lockout? Also do you think the Lakers signed off on Kobe having surgery in Germany before the lockout?
Larry Coon:
I think the players would ask for that in the negotiations. Whether they’ll get it is another matter — the owners would likely say that: 1) It wasn’t done under our supervision; and 2) It’s part of the cost stemming from the players’ choice not to agree to a new CBA in time to avoid a lockout.
Could you give me some of the best players in the league that may be laid off because new rule allows teams to release them?
Larry Coon:
If there is an amnesty clause, then teams will get rid of players whose contract size and contribution to the team combine in the wrong way. The most obvious one would be Gilbert Arenas, although you’d hardly rank him as the best. Brandon Roy could conceivably be a victim
It’d take a lot (i.e., too much for a chat) to go through team-by-team, but those to immediately came to mind.
I’ve heard the NBA owners will get some form of tv money, could the players decertify and go after that like the NFL players?
Larry Coon:
The TV contracts continue to be paid. After the lockout ends the league will either have to make up the TV games or pay the money back.
The players could certainly try to go after that money, but decertification is a whole ‘nother thing. The players would have to be in a situation where choosing antitrust law over labor law really seems like their only hope (or at least, their best bet). They wouldn’t do it just for the iffy prospect of getting their share of that TV money.
Is there any hope that the players will negotiate a CBA, where the rich teams can’t keep buying championships and the small market teams can compete?
Larry Coon:
The owners really want a system like that. That’s what revenue sharing, lower salary costs and a tighter cap are suposed to achieve.
The luxury tax system didn’t work as intended — it didn’t stop teams from spending, it just stopped the POORER teams from spending. The richer teams just absorbed it as part of the cost of doing business.
During the NBA lockout are gm’s allowed to discuss trades with other teams or is every thing on hold while negotiations are on going
Larry Coon:
As far as I’m aware teams are still allowed to talk to other teams. But I’d make really, really sure that the league is okay with it before I picked up a phone. The league seems to have a hair trigger on their "$1 million fine" gun.
How long do you think it would take from an agreement to the start of the season? Has the NBA contracts with the teams how fast the must be able to host a game?
Larry Coon:
In 1999 they took a couple weeks to get the agreement finalized, voted on, printed, distributed, etc., then there was a shortened free agent signing period, short training camps, and only three preseason games. Everything would probably take about a month.
50/50 split in BRI a flex cap with 70mil with few exemptions and a more enhance revenue sharing will this be enough to end to stupid lockout? in my opinion if owners dont want to pay players then contraction is the solution!
Larry Coon:
One of the owners’ complaints is that as non-salary expenses go up, the increase comes entirely out of the owners’ share of the pie and not the players’ share. This is something they want to fix. They’d be fine with a 50/50 split AFTER more money is taken off the top to cover expenses. One of their proposals called for $900 million to be taken off the top, then they’d split the rest 50/50. The players’ proposal essentially was no extra money off the top and a 54/46 split. There’s room in there to negotiate.
Both sides are talking about increasing revenue sharing, so you can consider that to be a given. But if there’s going to be contraction, then revenue sharing will be the driving force. At some point the owners of money-making teams (who will consistently be feeding into the revenue-sharing system) will tire of supporting teams that will never turn a profit on their own. The more revenue sharing, the greater the call will be for contraction — or at the very least relocation.
The players are fundamentally opposed to the idea of a hard cap, and they say a flex cap is just a hard cap with a fresh coat of paint.
That’s it for today, guys. Talk to you again next week.
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.
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