HoopsHype Salary Cap rumors

May 16, 2011 Updates

The details, spelled out in an April 26 memo issued by National Basketball Players Association Executive Director Billy Hunter, marks the league’s push for a major overhaul of the NBA’s economic model and emphasizes to players an aggressive bid to significantly slash costs and shorten contracts. The memo was sent to all NBA players and was dated just days prior to the league delivering to the union a new labor proposal, which a source said still included the $45 million hard cap but added a phase-in of the cap over a few years. Union president Derek Fisher publicly dismissed the latest proposal as too similar to the original proposal. The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent. Sporting News

Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap. The proposed hard cap is something the NBA has never had under collective bargaining, but it has become a critical element to owners. This initial proposal, and its steep cut in player cap space, demonstrates a strong commitment by the owners to dramatically curtail player payrolls while also supporting NBA Commissioner David Stern’s mantra of making the league more profitable. Sporting News

The new agreement is expected to have some variation of the "Allan Houston Amnesty," which in the current CBA allowed for a team to cut a player without that salary counting against the luxury tax. Ironically the New York Knicks used this one-time cost saver on Jerome Williams instead of Houston. The players still get paid which is why it's favorable to the union. The owners gain flexibility and save money. It's a win-win. Word is there may be another amnesty clause (even possibly two) in the new deal, with the money not only coming off the tax but the cap as well. Notice all the trade proposals flying around the internet and radio? The Lakers should take on the contract of Gilbert Arenas to entice the Magic to deal Howard? An amnesty clause would change that significantly. HoopsWorld

There's a good chance Arenas may be waived via amnesty before next season, allowing for the Magic to save roughly $6-$19.2 million in tax in the first year, depending on the tax threshold, total salary for Orlando and the new CBA. Obviously rules on tax may change completely but the current owners' proposal has the existing system gradually evolve to a hard cap, phasing out luxury tax altogether. It remains to be seen how a compromise is reached but the point is the same on Arenas. Suddenly the Magic, without Arenas, have just $57 million committed to next season. Technically there's still the payment to be made to Arenas, so it doesn't solve everything but it puts Orlando in a different position financially. Given the chance, the preference for the Magic is to rebuild a contender around Howard rather than dealing him. HoopsWorld

May 12, 2011 Updates

Sources told ESPN.com this week that the central change made by owners to past collective bargaining proposals called for easing in a more restrictive financial landscape over a three-season cycle as opposed to trying to impose a hard salary ceiling with immediate effect next season. The league, sources said, regards this as a major concession, since the next two seasons would employ a salary-cap system with luxury-tax penalties not unlike the system currently in place. Teams currently operate with a salary cap of $58 million per franchise, with a dollar-for-dollar luxury tax imposed for every dollar teams spend over the tax threshold of $70.3 million. ESPN.com

The NBA, sources said, likewise hopes to implement even lower salaries for rookies than they currently make based off the league's rookie scale The league also would like to propose new rules that make it hugely advantageous for marquee players to stay with the teams that draft them. ESPN.com

April 21, 2011 Updates

In a surprising turn of events, there is a growing consensus that if there is a work stoppage in the NBA, it would not be a long one and that unless Billy Hunter tries to make this process personal, there appears to be some degree of willingness on the NBA Owner's part to make a reasonable deal. Several high profile agents have said they were doubtful that a lockout was inevitable and said they were hearing positive things from the process. During the last NBA Board of Governors meeting the NBA's Labor Committee was authorized to make a new proposal to the players and it's believed several of the points the NBA Players had material objections to are being removed from the discussion or modified in such a way as to make them more palatable to the players. HoopsWorld

March 30, 2011 Updates
March 14, 2011 Updates

What provides the biggest concern is the idea that NFL owners and players couldn't figure out a way to divide $9 billion. The NBA's pie is smaller -- about $4 billion -- and owners aren't just looking to adjust the split between themselves and players. They're looking to change the system by which the players are paid by going to a hard salary cap. And they're looking at eliminating most, if not all, of the current exceptions to the cap that teams receive in order to re-sign their own players for more money or for capped-out teams to be able to add veterans at relatively low prices. "Those (NFL) owners are pushing with the money they're making," said a source involved in the NBA discussions over the weekend. "I think our guys will do the same. Maybe there will be some decisions made in this court that will harder or soften one side one way or the other." NBA.com

The NBA's players and owners met during All-Star weekend in Los Angeles, and the tone was cordial afterwards. However, McGrady believes the public perception about the owners wanting an absolute, hard salary cap with no exceptions is false. "The proposal that they have out here for us, it's really bull," McGrady said. "Some of the owners, (Lakers owner) Jerry Buss, the big-market owners, they don't want a scale-down." Detroit News

McGrady, like many players, has a problem with the NBA trying to take away what they've gained. The owners want a scale-back of $800 million, cutting salaries approximately by one-third. They also want to take away guaranteed contracts and trim the players' share of revenue, currently 57 percent. "We're gonna have to give up something to gain a little bit," McGrady said. "It's definitely not gonna be the way it is, I understand that. "But it can't sway that much into the owners' favor where we're losing out big time." Detroit News

March 11, 2011 Updates

The seven teams on course to pay tax in the summer, barring unforeseen payroll reductions between now and June 30: 1. Lakers $20.07 million. 2. Magic $19.59 million. 3. Mavericks $16.33 million. 4. Celtics $6.37 million. 5. Jazz $4.96 million. 6. Blazers $3.79 million. 7. Rockets $452,254. Total: $71.56 million Per-team payout for teams under the $70.31 million tax threshold: $2.38 million ESPN.com

February 12, 2011 Updates

Though the raw numbers sort of suggest otherwise, the Warriors, barring a dramatic salary-slashing move, are essentially capped out through next season, even with $17M in expiring deals slated to come off the books this summer. They’re at $65M on this year’s payroll. They’re way over, thanks to cap exceptions and re-signing veterans and all the sorts of payroll-inflating doo-dads that the owners now want to eliminate. (They can stay above the cap, but ONLY if they trade some salary for more salary. Salary-cap space is not the same as room under the luxury-tax line. Two entirely different things. (When you’re talking about signing major free agents, you have to free up salary-cap space. The Warriors will not have much or any next summer, unless they start giving away big contracts right now–if they can.) San Jose Mercury-News

They’re capped out. I keep saying it. Some have questioned my thinking. Here’s why it’s true and why it’s important to know: * The GSWs have committed about $48M to eight players next season (Ellis, Biedrins, Lee, Curry, DWright, Amundson, Udoh and Bell. Lin’s deal, I believe, is partially guaranteed, but it’s not a big number either way, so I’m not counting it.) Add in the probable $3M first-year salary of a 2011 top-12 pick, and that pops the commitment to $51M for nine players. The Warriors will also have Reggie Williams due for a big salary bump (or, I guess, could sign-and-trade him for an other player making more money), which easily could take it to $55M for 10 players. And they will need 4 or 5 more players to fill out a roster. San Jose Mercury-News

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