The "Blood Issue" That Could Kill The NBA Season, But Won't

You're darn right a hard cap is a "blood issue" with both the owners and players. The players are the only ones admitting it right now, but it's obvious that the owners feel the same way. The line in the sand was drawn a long time ago. While many fans are getting caught up in money and revenue-sharing being the biggest issues (billionaires fighting with millionaires), the real issue is the salary cap itself.

Just consider this example: under the current salary cap structure, the LA Lakers can spend $100 million on player salaries and turn a profit, while the Sacramento Kings spend $45 million on player salaries and yet lose money.

Make no mistake - there are two separate issues here. Cash distribution and talent distribution.

The owners know they can figure out the cash distribution amongst themselves. They're all big boys and can devise a revenue-sharing system to help spread the wealth a bit more.

But the biggest issue is this: why are the Lakers even allowed to spend more than twice as much on salaries (nearly double the "cap") in the first place? If you want competitive balance, and you want all teams to have a fighting chance at equitable talent distribution, you have to put more limits on spending.

Let's look back at our friends in the NFL, who have a hard salary cap. No team can spend any more than any other team, regardless of circumstances. Sure, there are poorer teams than others (Tampa Bay, for example) who don't approach the cap each year. But the biggest advantage of the hard cap is that a team like Dallas, whose owner has the deepest pockets in the game, cannot just buy himself a championship.

The National Football Conference, in which the Cowboys reside, has not had a repeat Super Bowl representative in 10 years. TEN YEARS! And yet, despite being willing to spend every penny in their pockets, the Cowboys have failed miserably. Not only have they failed to appear in a Super Bowl during that span, they've only won ONE playoff game. I guarantee you that if the NFL had the same rules as MLB or NBA, the Cowboys would have won multiple championships this past decade, simply because Jerry Jones would sign every player he wanted. He would be the George Steinbrenner, Jerry Buss or Mark Cuban of the NFL.

The NBA owners don't want to impose a hard salary cap like the NFL just to "save them from themselves".

They want the hard salary cap to save them from their peers. They don't want Jerry Buss to be able to spend twice as much as his peers, and 30% over the "cap" at which teams are viable.

To be sure, the current Collective Bargaining Agreement in the NBA allows for the same types of contracts that the NFL enjoys. The owners don't have to exceed the "cap". They have the option to offer as little as one-year, non-guaranteed contracts any time they want, just like the NFL. In theory, they should be able to control their own spending. 

But they can't, for two big reasons.

Reason #1: All it takes is one

In the NBA, guaranteed contracts are a death nell only to the relatively poor. If you're rich, you can offer guaranteed, escalating salaries for multiple years and there is little to no punitive damage thanks to the soft cap. In a league where only 7-8 players get regular playing time on a team, even the most egregious spenders get to bring in new players to replace old ones in the lineup without having to even get rid of those old ones. The Lakers added 2 rotation players to their $100 million 2-time champion team last year without giving anyone away. That's improving 25% of their team even though they were $30 million over the "cap".

So what does that mean to the Sacramento Kings? It means they have to offer the same lucrative contracts (big, long-term, guaranteed money) or they won't get the time of day in negotiations with free agents. Yet, if you don't have the same revenues, you can't afford to keep spending on even more players. So you end up with Beno Udrih making $6 million a year for the next 5 years even though his performance drops off precipitously. And what if a big-money player gets injured? Richer teams just go get new players while still paying the injured guy. Poorer teams turn to a rookie or journeyman and look forward to lots of losses.

Closer to home, take the Amare situation. As I wrote before, teams are allowed to offer the same contracts that NFL players get. Owners are allowed to be prudent. Sarver offered oft-injured Amare a max contract that was only 60% guaranteed (by contrast, Larry Fitzgerald's new NFL deal is less than 40% guaranteed, and Fitz has never been injured!). Amare laughed and said he wanted "an NBA deal, not an NFL deal". The Knicks gave him "an NBA deal" - same money, but all guaranteed for all 5 years. So long, Amare. All it takes is one.

 

Reason #2: Collusion is illegal

Players and agents say they're only taking what's offered. No one is MAKING the NBA owners offer these crazy deals. And the players would be stupid to reject them.

Great! So what if all the NBA owners sat down and decided, as a unified collective, that no one would offer more than 3-year deals anymore. And that every contract would have an out clause in case of non-performance or injury (non-guaranteed money). And, that no one would exceed the "cap" by more than X dollars, despite the free exceptions they've got. And let's further pretend that they trusted each other not to break those unwritten rules.

In that case, the lockout could end today and the old CBA could be extended. Owners could offer little whatever they want, and the players would have to take it. Fiscal sanity is back!

Not so fast. That's called "collusion" and it's illegal. In a collective bargaining world, one side cannot collude to control prices that intentionally deflate the market. And since the market has been insane for so long, any significant decrease in contracts would be seen as collusion.

The only way the owners can enact some sort of fiscal sanity is to change the rules of the CBA, to protect them from their competitive peers and antitrust violations.

The line in the sand has been drawn.

At some point, the players will compromise, and so will the owners. We will likely end up with something halfway between the NFL hard cap and the old NBA soft cap. Some exceptions, like the midlevel exception, will likely be dropped or dramatically changed. "Bird" rights will be limited to X concurrent uses (like NFL franchise tags). Teams like the LA Lakers won't be able to significantly improve their team if they are already over the cap. Harsher penalties will be enforced on those already there.

Yet players will still get guaranteed deals (though maybe for less years). The stars will get paid big bucks. The solid rotation players will get solid money. And the middling/fringe players coming off a good season will still get middling/fringe money (long term) or a short-term windfall at best.

And the season as well as the NBA's viable future will be saved.

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