Salary Cap Chat With Larry Coon 9/28/11

1. Stephen

   Larry, since the players are against a hard cap, I’ve thought of an idea that might work out for both of them. How about a cap that only allows the team to go over the salary cap to resign their own players (with more money going to the player if he resign with his own team) and prohibits the ability to do a sign and trade. This gives the team a better chance to keep that player and stops the ability for the player to get his cake and eat it too. Plus that player needs to be with the team at least a full year before the team has the ability to sign a multi-year contract? One other question, how can I get your autograph?

   • Larry Coon

     The players would call your idea a little less of a hard cap, but a hard cap nonetheless.

     I like the idea of doing away with sign-and-trade, but I think it wouldn’t go over very well with the players — and if the owners want to get rid of it, then there will probably have to be a quid pro quo — either a bump in the revenue split, or some other concession to the players.

     You should really set your sights higher than wanting MY autograph. Find me at a game — I’m planning to be at the Drew-Goodman game next month, and hopefully at an actual NBA game before too long.

2. Alex

   Ok, kobe is asking for 15 million from the italian club to play for them..wtf..he makes 20 plus here..so you figure he will be happy just playing for 2 dollars to permanent marker his name world wide. Is he going broke or just to damn greedy. So what if your hot stuff, influencing kids to better their lives especially from different countries seem much more important than making a quick buck wouldn’t you agree?

   • Larry Coon

     Well…he’s either making money in the NBA or making money there, but not both. And if you’re arguing from a standpoint of altruism, then that could really be applied to all players, all the time.

3. tony

   Would the players have a problem with a more punitive luxury tax? And if so why? I hope a miracle happens on Wednesday!

   • Larry Coon

     Depends on the extent. If it keeps all 30 teams from exceeding it, then the players are going to say “if it quacks like a duck…” and call it a hard cap.

4. Dong of Dayton

   Hello Larry,

   I understand a hard cap is being negotiated because the owners think it will create a more competitive league where everyone has the same amount of chips to play with. Do you feel like a hard cap will accomplish this or will players take pay cuts to get on winners anyway?

   • Larry Coon

     I think you can never completely level the playing field. Certain teams will always be glamor franchises, will have more player-friendly ownership and management, will have tax advantages, will have nightlife, have beaches, and be conspicuously lacking snow for much of the year. But it’s a fallacy to think that because you can never attain the gold standard, you shouldn’t do what you can to make it better. Revenue sharing and a hard(er) cap will help.

     But I wouldn’t necessarily say the hard cap is being “negotiated.” The league wants one, and the players are saying “absolutely not.” That’s more of an impasse than a negotiation.

5. Steve

   Hi Larry,
   Will something like a 50/50 split, a steeper luxury tax (like 2 dollars for each dollar over), plus fewer exceptions and shorter contracts work for everyone in a new CBA?
   Plus some allowance for an adjustment when the new TV contract kicks in?

   • Larry Coon

     I answered the split in the last question.

     In order to figure out how to set the luxury tax, as my guy 24 points out, the two sides need to figure out what purpose it’s supposed to serve — is it supposed to curtail spending, or is it supposed to be a means of revenue sharing? If it’s to curtail spending, then 2:1 probably doesn’t cut it — the contending teams probably grit their teeth and pay it anyway. But if it’s too steep (word was that the owners’ latest idea was to have a progressive tax that started 1:1 and went as high as 4:1) then it becomes a de-facto hard cap — and the reason the owners are floating the idea of keeping the luxury tax at all is because the idea of a hard cap is a “blood issue” for the players. If its purpose is to revenue share, then the issue is probably better served via revenue sharing — with the tax being a supplement at best.

     So if they have revenue sharing, then I don’t know what the luxury tax does except serve as a clumsy way of providing severe spending disincentives without calling it a hard cap.

     For fewer incentives and shorter contracts, I think these kinds of system changes are tied to the revenue split. The lower the split (for the players) the more of the previous system the players get to keep. 50/50 may eventually be low enough for the players to keep the previous system, but I think if they want to keep everything they had, then the split has to be in the high 40′s right now. Conversely, if the owners want changes to the system like fewer exceptions and shorter contracts, then the players would insist on a higher BRI split.

     For the TV deal — it’s hard to do a long-term agreement with such a huge contingency right in the middle. I think they eventually end up with a six-year deal.

6. Ron

   My Solution:

   Bri 50/50
   Max contract = 5 yrs and is calculated from taking the avg salary of the top 20 players in the nba now. The salary cap = top avg salary x 2, and will be raised by the same percentage as inflation in the USA.
   Keep the mid level 2yrs@ 5mil or 4yrs@7.5mil. Grandfather contracts, last year on any one contract can be subtracted from cap argue about the rest.

   • Larry Coon

     50/50 might be the eventual landing spot, but I don’t think they’re there yet. I think we have to get closer to the point where the season gets canceled before they start talking seriously about 50/50. For one thing, the players likely wouldn’t ratify an agreement at 50/50 — the push to decertify as an alternative would be too great.

     Your max salary would be 50% of the cap, which is probably too high. And I don’t see any advantage to changing the formula so it’s based on the top-20 salaries rather than a percentage of the cap. I also don’t see any reason to tie cap changes to inflation rather than league revenues — the league revenues are a more direct measure of how the league is doing. For example, if the league gets a serious injection of new money with the new TV deals, your proposal would ignore it.

     The mid-level is supposed to protect the middle class, so it’s better tailored if it’s tied to the mean salary, as it is now. I’d be in favor of shortening the mid-level to three years — because after three, the player would qualify for Bird rights.

7. tiff

   if theres a clause in the new CBA that would allow owners to cut a signed plyr do u think the lakers would cut kobe to lower his pay $30 mill is way to much for him & it may help make a trade 4 another star to take less money on an extension as well if kobe does

   • Larry Coon

     Let’s see, how do I word this appropriately? Not a chance in a million, billion, quadrillion, quintillion years.

     One showstopping problem with your idea is that once cut, an amnestied player cannot be re-signed or re-acquired by his original team for the duration of his terminated contract.

     That said, similar things have been done in the past. For instance, the Lakers used to leave Kareem unprotected in the expansion drafts (Minnesota, Miami, etc.), with the understanding that if he was selected, he’d just retire. The Lakers also gave the expansion teams draft picks to ensure he’d be left alone. But this is a completely different situation than what you propose.

8. T in the Nap

   Should Tyler Hansbrough take it as a smack that the Pacers are looking so hard for a PF in the offseason?

   • Larry Coon

     Yes and no, I guess. He DOES have shortcomings.

9. Eric

   Thank you for calling out people for posting the same question in every chat; I assure you, it annoys readers as well.

   I’ve read that teams like Miami and Dallas want to start the season asap because they have championships to pursue and money to make. I have also read that teams like Phoenix and Sacramento will hold out for a better deal as long as possible because they lose money and games already. However, I have seen little explanation of strategy for a middle of the road team, like Orlando, with so much to lose.

   • Larry Coon

     A canceled — or even shortened — season will have huge consequences for all 30 teams. It’s a mistake to look at money-losing teams and conclude “they’re better off not playing the season at all.” That said, there IS a little more urgency from certain teams.

10. Eric P

    How is David Faulk’s role or position changed since his imput in the 1998-1999 lockout?

    • Larry Coon

      Faulk doesn’t have the influence he did back then, when he was Jordan’s & Ewing’s agent. He’s mostly an observer now.

11. Zach M.

    Is this you on the right side of this photo in the black polo with your arm raised? http://imageshack.us/photo/my-images/190/5106810218875412267lo.jpg/sr=1

    • Larry Coon

      It does look like me, and I was there at the time, but I wasn’t RIGHT there — I was on the opposite side of the court. I also wouldn’t have been cheering like that — a no-no for media. I did shake hands with & congratulate a few of the Lakers that night, but that’s as far as I’m going to go.

      I am kind of curious who that is — he’s wearing a Lakers laniard, so he has a team or media credential.

12. Alex

    What do you think can be an answer for this lock out? Are the Owners and Players are talking right now?
    Can we still expect a season in NBA?

    • Larry Coon

      They talked yesterday and today, and will resume on Friday. There’s a middle ground, but I don’t think either side is willing to go there yet — so I think this is going to take longer. But I think at this point that both sides would eventually accept that middle ground rather than lose the season entirely.

13. Shaun

    In negotiations the issue of an age limit for the NBA Draft has not been brought up publicly in some time. Do you believe if the NBPA could use an age limit of 21 to enter the NBA Draft as a bargaining chip? Would the age limit in theory make for a better more profitable product?

    • Larry Coon

      I think it’s more of a bargaining chip than a real issue. The players all agree IN PRINCIPLE on not wanting an age limit, but I think they’ll be willing to use it as a trade chip when they have to. For one, the voting members are already in the league, so it doesn’t apply to them. More importantly, for every young guy who’s added to the league, a vet somewhere loses his job.

      It hasn’t been brought up in some time because it’s an ancillary issue. Things like the revenue split and the hard cap are way more important right now.

14. Bryan B

    Any update on today’s negotiations?

    • Larry Coon

      Neither side was willing to characterize what happened as “progress,” but they’re resuming on Friday with the full groups. I guess you could take that as a good sign — they wouldn’t pull everyone in unless there’s something to discuss, and pulling everyone in is a necessary step when they eventually do agree to a deal. They also blocked-off the weekend to continue meeting, but say that’s due to the calendar (it’s almost necessary to postpone or cancel the start of the regular season) than to them being close on anything.

      We’re definitely in one of the crunch times right now. If they’re not close by Monday, I think we’ll see the start of the regular season canceled.

15. Francois Bramble

    Larry,

    In your informed opinion, what is the likelihood that the new CBA will include an amnesty clause that will allow a team to cut a player, but pay that player his full salary while having that figure come off the salary cap and the luxury tax calculations?

    And what is the likelihood that a team will be able to invoke the amnesty clause on two separate players?

    Thank you for your consideration.

    You do fantastic work.

    • Larry Coon

      Thanks!

      I think an amnesty provision is pretty likely, and the more they change the system or lower the cap, the more likely it becomes.

      The idea of two amnesties was discussed, with the second amnesty paying only 50 cents on the dollar. That’s bound to be a more contentious issue. I’d say it’s pretty likely we end up with one amnesty, and only one.

16. devonte wilson

    what would the knicks have to give up to get robin lopez?

    • Larry Coon

      I’m not sure I see a legal deal that either team likes enough to pull the trigger. Balkman is the only Knick with a similar salary.

17. Matt

    What are the chances the season is lost entirely?

    • Larry Coon

      Previously I thought the chances were 50/50. Now, it seems like both sides may be edging toward compromise more than I originally thought. Now I think it’s at least 75/25 — maybe better — that we have some sort of season.

      That’s it for today folks — talk to you again next week.

18. Earl

    Is it important for the owners to get everything they can at this point because of the coming lucrative Tv packages?

    • Larry Coon

      The players would claim that what the owners are doing is just a money grab, with revenues expected to increase substantially in the future — the new TV deal being one example. There may be some element of truth, but it certainly isn’t the whole story.

19. bobby

    What happens to the salary that shaq was supposed to get from boston does it still count?

    • Larry Coon

      No, his salary ceased on June 30.

20. Ernie

    What is preventing the entire country from asking a revenue sharing system from the goverment? I would love to call Bill Gates a partner and have a bigger piece of the pie. Why is a good thing for the NBA?

    • Larry Coon

      The NBA is an association of 30 independent franchises that are co-dependent on each other. Bill Gates & the government are disanalogous.

21. Matty

    Do you think the players are really united? With so many of them bolting for Europe and beyond, and Fisher constantly stating “we are united, stay united” (can you say overcompensating?) I get the notion that the union isn’t as united as they are stating in public. Your thoughts?

    • Larry Coon

      Word is that there’s increasing pressure from agents to decertify the union. Fisher & Hunter are trying to keep them behind the negotiating efforts for as long as they can.

22. Chris

    How do they plan on addressing parity? The increased luxury tax penalties would probably negatively affect smaller markets as well in terms of acquiring players. Teams in “undesirable” locations would need to pay over market value, to retain/lure certain players away from the more “desirable” locations. I still foresee at least a dozen more Laker titles in the next 30 years.

    What’s your opinion on a hard cap, though? I think the owners should really push for one to limit a team’s spending on “star” players (or at least players that make star-type money) so the talent is spread around. Players would be forced to sign with teams that they would otherwise never consider if they wanted big money. No more of these 2-3 million dollar paycuts to pair up with certain players or play on a certain team. If a star player really wanted to just win and be part of a supporting cast, they should be exchanging a $20+ million salary for a $3-4 million salary.

    • Larry Coon

      In theory, it’s addressed through a combination of increased revenue sharing and a harder cap. You’re right that you can never completely level the playing field, no matter what you do.

      In the end, I don’t think a hard cap is really necessary (and there are those who argue that it won’t really address parity, either), and I think we’ll still have a soft cap.

23. JJ

    I am a little confused with all this salary cap business. I understand with a hard cap teams cannot go over this number and with a soft cap you can. If this is the case, in the past CBA what keeps a team like miami from going over the cap to fill out their roster? They have three near max guys and they cant go over the cap to fill out their roster with a competent team? Is the luxury tax that much of a deterrent? Consider the lakers and the mavs, teams that one the last three championships… all over the tax. There was so much hoopla about teams like the knicks and miami clearing cap space to get 2-3 max guys, but theoretically from what I understand they didnt need to clear the cap space in the soft cap because all that keeps them from going over the cap is the luxury tax correct? So other than the luxury tax what does the cap number matter in the soft cap?

    • Larry Coon

      A team can’t just run out and sign anybody in a soft cap system. Above the cap, they can only sign players using allowable exceptions. Their big signings (Bron & Bosh) were made while they were UNDER the cap. Once they did that (and re-signed Wade) they had just a little left over for Miller. After that all they could do was re-sign Haslem (Bird rights — one of the exceptions) and sign new players for the minimum salary.