HOOPSWORLD | Basketball News & NBA Rumors

Larry Coon:
Welcome to the chat, everyone! There’s no lockout at HOOPSWORLD, so let’s talk.

In effect, they’ve done exactly that. One of their proposals called for salary rollbacks from 15 percent to 25 percent, and the higher the player’s salary, the greater the pay cut.

But you can argue it the other way as well. This is a star driven league. The star players are the guys primarily responsible for putting fans in seats, increasing TV ratings, and selling Nikes. From that standpoint, they deserve the biggest share of the money.
 

Larry Coon:
I think that would really be pushing it, since he’s been identified as the new coach, whether he’s actually signed or not. The league threatened a $1 million fine for anyone breaking the moratorium on communication. If you were Vogel, would you want to risk it?
 

Larry Coon:
Hold off a little bit — one of the players’ proposals included a second MLE. This proposal certainly hasn’t been agreed to, and I’m pretty sure the owners would be against it. They want to reduce exceptions, not add more of them.

In the previous agrement, the MLE could be split and given to multiple players. So teams were previously able to use it to add two good players, although they had to do so within a budget.
 

Larry Coon:
Yeah, I think you’re mistaken. One of the most obvious refutations is that the more profitable a team is from an operational standpoint, the more it’s worth. Plus remember, an owner can only realize that increased value when he sells his team. Many teams haven’t been sold for decades.
 

Larry Coon:
I’m not so sure. They’d have to find arenas to play in, and they’d have to find a lot of financing. If you were asked to invest a serious amount of capital to help get such a league off the ground, would you do so, knowing that if the NBA lockout ends next week or next month, your league, and therefore your investment, is in serious trouble?
 

Larry Coon:
You certainly can’t blame the player. He’s going to try to maximize his income, and nobody can blame him for doing so.

Neither can you blame the Hawks. Had they not ponied up with a max contract, a team like New York would have. It would have hurt them from a competitive standpoint, and therefore indirectly hurt them financially.

It’s a system of supply & demand, and there are 30 teams competing with each other for the same limited supply of talent. That’s going to drive up prices.

So I blame the system. So does the league, which is why they’re trying to address it through the labor negotiations.
 

Larry Coon:
Forbes has their own sources and their own way of looking at things. It’s hard to say how far off they are, since I don’t have complete & current financial data to compare their results to.
 

Larry Coon:
They want a system that not only gets them rightside-up this year, but is also sustainable over time. They don’t want to go through all this trouble only to end up in the same boat a few years down the line. So larger changes are needed, beyond the basic revenue split. They want 30 franchises to have the opportunity to be both profitable and competitive. That means bigger changes.
 

Larry Coon:
I look at it this way. Suppose they do, and they go for it again next year. Then what? If it hasn’t happened already, then  pretty soon this team is going to fade, and they’re going to have to rebuild. And the longer they wait, the harder the task will be.
 

Larry Coon:
Sponsors are already deciding where to invest their advertising dollars, and season ticketholders are already being asked to renew. This lockout is already costing them.
 

Larry Coon:
I -do- expect there to be a soft cap when all is said and done.  I expect that the Bird exception will remain — it benefits both sides, and even David Stern talks about its virtues. But I expect it will be more limited, and that sign-and-trade will go away.

I expect the mid-level will continue, but in a much more limited form. How many full five-year mid-level signings can you think of that worked out well for the team? Not many.

I think the exception to sign your first round draft picks will remain, as will the minimum salary exception.

The exception for trades (currently 125% of the salary the team trades away) might even be loosened up, because trades are a net zero effect on the league’s money, and the current rules often require teams to do weird (and expensive) things to get a deal done (see Aarom McKie and Keith Van Horn). I also think non-simultaneous trades (i.e., trade exceptions) could be a thing of the past.

Larry Coon:
In order for a player to sign a contract he has to be a union member. So all players, even those who sign 10-day contracts or are waived, are members.
 

Larry Coon:
They HAVE opened their books. They’ve done so to the players association, and they’ve done so to an independent accounting firm mutually appointed by the league and the union.
 

Larry Coon:
Gilbert Arenas — still the reigning champion.

But I do have to say, through no fault of his own, Brandon Roy’s contract will be a bad deal if he doesn’t fully recover from his injury.
 

Larry Coon:
I’m not sure I’m comfortable taking that kind of advise from someone named "Bert."

That said, there’s only one woman with a vote that counts, and she likes it this way.
 

Larry Coon:
An amnesty clause? I think it’s pretty likely, and I know it was a part of at least one of the league’s proposals to the players.

When the league changes rules, they usually add provisions to accommodate teams negatively impacted by the rule changes. In 2005 they changed the luxury tax rules, and also added the luxury tax amnesty provision to accommodate impacted teams.

This time they’re talking about changing the fundamental way the salary cap works, so it’s likely they’ll add an accommodation that provides salary cap relief.
 

Larry Coon:
Yes — the league wants a system in place where every team, if they are managed well, can be both profitable and competitive. Part of this will be addressed by revenue sharing. The rest will be through tightening up the rules so teams can’t become better by simply deciding to spend a lot. You see that now — all of the top teams are luxury taxpayers, so for them, the tax is part of the cost of doing business.
 

Larry Coon:
If the new agreement eliminates non-simultaneous trades, then all trade exceptions are automatically moot by definition (unless they continue the ones that are already active while not allowing any new ones to be generated).

The expiration date on existing exceptions is a matter of negotiation. They could decide that all trade exceptions will expire on their original expiration date, even if that was in the middle of the lockout. Or they can decide to extend them by the number of days the lockout lasted.

So it’ll be something they’ll decide together, but as I’m sure you understand, it’s not the foremost issue on their minds right now.
 

Larry Coon:
Possible? Yes. Likely? Not a chance.
 

Larry Coon:
I think the only way he gets to LA is if he did what Carmelo Anthony did — ask to be trade (or else he’ll become a free agent and leave on his own), and make it known that the only team he’ll sign an extension with is LA. Is he going to do that?
 

Larry Coon:
Well, if there’s an extended lockout, then we might not get an all-star game anyway. Remember, the 1999 lockout season didn’t have an all-star game either.

It’s hard to say what a few guys will decide to do. In 1964 the players were fighting for the common good of ALL players. If the star players did something like that now, they’d just be doing it for themselves. At the very least, it’d be a PR disaster for them.
 

Larry Coon:
That depends. What did you do to the old one?
 

Larry Coon:
Deadspin quickly backed off that interpretation. I’ll refer you to their updated article.
 

Larry Coon:
I’m like a kid caught in the middle of a divorce. I just want Mommy & Daddy to stop fighting.
 

Larry Coon:
Correct — the first $500K doesn’t count agaist the cap, but any amount above that does.

But here’s the problem. Let’s say a buyout is $2 million. The team can’t just add $1.5 million to their cap. They have to have some means to do so.
 

Larry Coon:
The leauge’s initial proposals were to fix the inequity right away — i.e., the players needed to take a big pay cut, right off the bat.

The leauge’s alternate proposal was for no big pay cuts, and instead they’ll make it up over time by holding salaries fairly flat while revenues continue to increase. That sort of idea needs time to work — hence the proposal for a 10-year deal.

The players, of course, are against effectively freezing their wages for 10 years, and their counter-proposal would put the CBA up for renewal the year after the new TV deals take effect. But if the players want a shorter deal, then they’ll have to be willing to sacrifice more money now.
 

Larry Coon:
There’s an unstated premise here that if it’s not the same eight-or-so teams competing for the title year after year, then the league will benefit overall.
 

Larry Coon:
The problem is that salaries rise at a higher rate than revenues — and that’s not sustainable.

And the recession merely accelerated the problem.
 

Larry Coon:
Are you asking because you’re planning a trip out here in 2012-13? One more reeason to hope it gets settled.
 

Larry Coon:
It’s supposed to be business as usual for the NBDL, although I don’t think they would be able to sign players who are union members.
 

Larry Coon:
Derek Fisher told me multiple times that this is more of a last resort, but it’s definitely one that they might have to turn to.
 

Larry Coon:
This is one of the issues the NFL is litigating.
 

Larry Coon:
Does it matter? If three teams are elimated, the remaining players would be dispersed to other teams, so the whole league would change.
 

Larry Coon:
Because the cap rules will still change significantly, even if it ends up as a soft cap.
 

Larry Coon:
I think it’s going to change teams’ incomes and spending ability right away, so its effects will be immediate.
 

Larry Coon:
The league follows the same laws of supply and demand, with the demand being the primary driver of prices. If fans stopped showing up in droves, the league would have to respond.

And it’s a real danger of a long lockout. After the 1998-99 lockout Stern said "we have some winning back of fans to do," and by some estimates it took a good four to five years before the league fully recovered. One of the responses in 1999 was to ensure that a block of $10 tickets was sold for every game.
 

Larry Coon:
Eric would demand that we acquire players on the basis of how it would help his fantasy team, so it won’t work.
 

Larry Coon:
I think that while indivual rules in the new agreement may help teams like the Heat under specific curcumstances, the overall effect will be that it’ll reduce teams’ spending ability, and the Heat are one of the teams that thrive on the ability to spend flexibly. The net effect will be better for teams like Minnesota than for teams like Miami.
 

Larry Coon:
No, these players were drafted, but they haven’t been signed. All drafting does is secure a team’s exclusive negotiating rights with a player. But the players won’t get paid until they’ve signed a contract, and that’s not going to happen until after the lockout is over.

It’s possible that some players are being loaned money by their agents, but I don’t specifically know of any cases of this happening.
 

Larry Coon:
I think the Bulls are too close to true title contention to roll the dice like that.
 

Larry Coon:
I cover this question in my lockout FAQ, which you can find here.
 

Larry Coon:
I just found this out last night. The league included it in part of its response to the New York Times.

[This question was edited since the original chat. It incorrectly said "union" rather than "league."]

Larry Coon:
The owners have released their books to the players union, not to the public.

Neither side has released the books to the media or to the public — including Forbes.

[This question was edited since the original chat. The first sentence was added.]

Larry Coon:
The way a soft cap works is that teams can spend freely below the cap, but can only spend above the cap within the context of certain exceptions. The Lakers haven’t been under the cap for a long time, but have continued to spend by: 1) Using their exceptions (such as the mid-level exception). 2) Players like Kobe Bryant and Pau Gasol continue to receive 10.5% raises every year. 3) Teams are allowed to acuqire 125% of the salaries they send away in a trade.

Miami was just under the cap last summer, and as soon as they signed Bron, Bosh, Wade, Miller & Haslem, they were already at the cap. At that point, their spending ability became much more limited. They can now do the same things that the Lakers did, but remember, the Lakers have been in this situation for several years, so they’ve had more time to build up to a high total. If the rules stay the same and Miami continues what they’re doing, they’ll get there eventually.

Time to go — thanks for all the questions, and as always, apologies to those I missed.