Blog Entry

NBA owners propose hard cap, paycut for players

Posted on: February 5, 2010 2:10 pm
Edited on: February 6, 2010 8:24 am
 
NEW YORK-- Launching a grim opening salvo in what is expected to be a contentious labor negotiation, NBA owners have sent their initial proposal to the players association and are pushing for some elements of a "hard" salary cap as well as a drastic reduction in player salaries, CBSSports.com has learned.

The proposal, sent to the union earlier this week, seeks a reduction in the players' share of basketball-related income from 57 percent to well below 50 percent, according to a person familiar with the document. Owners also are seeking some elements of a hard cap -- a departure from the current luxury-tax system -- and a reduction in the length and amount of max contracts.

Owners and players will meet in Dallas during All-Star weekend for their first face-to-face bargaining session as they try to reach an agreement before the current deal expires in 2011. The talks coincide with the NFL's labor negotiation, in which owners have proposed an 18 percent pay cut for players.

Billy Hunter, executive director of the players association, did not return calls seeking comment on the proposal, which is sure to set a serious tone in talks aimed at averting the league's first lockout since the 1998-99 season. NBA spokesman Tim Frank said league officials would have no comment.

Owners are seeking significant changes to the league's financial structure as many of them face massive losses in the wake of the global economic crisis. In addition to lowering the players' overall share of basketball-related income (BRI), owners are pushing for some elements of a hard cap to replace the current luxury tax system, in which teams with payrolls above the tax line subsidize those staying below the limit, which was set at $69.9 million this season.

But players already are facing a reduction in salaries next season, when the cap is expected to decline from the current level of $57.7 million to between $50 million and $54 million. Most team executives working on financial projections for next season are predicting a $52 million cap.

Union president Derek Fisher, speaking Sunday before the Lakers played the Celtics in Boston, predicted that the owners would "overreach" with their initial proposal and said the players would strongly oppose a dramatic reduction their share of BRI.

One prominent player agent, speaking to CBSSports.com about the impending labor talks, called a hard cap "untenable," but said the owners' financial losses a similar request for pay cuts by NFL owners create a double-whammy of leverage.

"The players will talk tough, but I'm not sure they have a whole lot to hang their hat on," the agent said. "If the NFL is cutting salaries, I think you can expect something similar in the NBA."

If the owners succeed in implementing some version of a hard cap, management sources predict it would drive player salaries down precipitously. The players likely will argue that the luxury tax system is working as a payroll impediment. Only a handful of the highest-revenue teams pay luxury tax in a given year, and a flurry of trades prior to the Feb. 18 deadline will illustrate the union's point. The majority of trades that will be consummated will be driven by teams trying to pare salary to avoid clipping the luxury tax line.

"An NFL-style hard cap is going to blow the minimum-salary and mid-level players completely out of the water," one person familiar with the owners' proposal said. "In any hard-cap system, the owners are going to pay the stars. If there are no exceptions and no ways to exceed the cap, everybody else is going to be left with the scraps."

Perhaps that is why the owners want to go farther than changing the rules; they want the league's highest-paid players to take a haircut, as well. Owners are seeking to reduce the maximum length of contracts to five years for players re-signing with their current teams and to four years for players signing with new teams. Under the current collective bargaining agreement, in effect since 2005, players re-signing with their current teams can be under contract for a maximum of six years. Other free agents can sign for a maximum of five. This would be a way to avoid star players' salaries remaining high while the second- and third-tier players bear the brunt of the overall payroll reduction.

As CBSSports.com reported Jan. 29, a segment of ownership believes that reducing the length and amount of max contracts would wipe out the owners' collective financial losses by itself. But by pushing for a significant reduction in maximum salaries, the owners would be alienating the players who produce the vast majority of revenue for their teams; fans pay to see LeBron James and Dwyane Wade, not Daniel Gibson and Dorell Wright.

“If they don’t like the new max contracts, LeBron can play football, where he will make less than the new max,” one team executive told CBSSports.com last week. “Wade can be a fashion model or whatever. They won’t make squat and no one will remember who they are in a few years.”

The negotiations also have implications that are much more immediate than a potential lockout to start the 2011-12 season. Numerous marquee stars, such as James, Wade, Chris Bosh, Amar'e Stoudemire and Joe Johnson, have the ability to opt out of their contracts July 1 and become free agents. Most of those players and their agents already were expecting a less favorable CBA in 2011. But if a drastic cut in max contracts becomes inevitable as part of a new labor agreement, such players might be even more motivated to opt out and sign long-term deals under the current deal. Just another wrinkle that could make what is expected to be the biggest free agency period in NBA history even bigger.


Comments

Since: May 4, 2007
Posted on: February 8, 2010 8:38 pm
 

How about getting rid of guaranteed contracts?

I hardly watch the NBA anymore because I can't stand watching guys taking nights off. The NBA needs to get rid of guaranteed contracts. It makes no sense to pay a player the exact same amount whether he is playing or sitting at home in his hot tub watching his team play (T-Mac, Agent 0, Starberry). With the exception of contracts for 1st round draft picks, I think the NFL has got the salary thing right. The NFL gives players a good base salary and then incentives for hitting certain metrics. Isn't performance based incentive the American way?



Since: Aug 15, 2009
Posted on: February 8, 2010 8:47 am
 

NBA owners propose hard cap, paycut for players

Basketball hasnt been the same since the lockout, and will continue to go downhill. Personally, i dont think anyone should be getting paid more than 3-5 million a year ESPECIALLY entertainers. You want to make 10 million a year become a docter or a lawyer, where you are making more of a differance in the world rather than putting your big ass head on a bill board.



Since: Aug 15, 2009
Posted on: February 8, 2010 8:41 am
 

NBA owners propose hard cap, paycut for players

Bobcat's are $20 if you want to sit with the bird's $85 for mid level tickets, and about $120 for mid-lower and $200 for floor seats.




Sad part is, tickets are this high WITHOUT big names like Lebron, Kobe, Dwight or K.G

 

would hate to see what they go up to if we get any big names.




Since: Oct 19, 2006
Posted on: February 6, 2010 10:52 pm
 

NBA owners propose hard cap, paycut for players

don't mind if they cut a little bit or spread it around the right way.But mr.owner make sure the 4and5 star player get their's.l like pro but i love college ball,i will stop watching,the officiating has been horrible for 3 are 4 decades,anyway.



Since: Dec 10, 2006
Posted on: February 6, 2010 11:26 am
 

NBA owners propose hard cap, paycut for players

Yep the discussion should be more about the fans. Make games affordable again. The athletes make way too much and the owners are multi millionaires. It really should be about average people having the right to be able to afford to go to games.



Since: Mar 31, 2008
Posted on: February 6, 2010 11:22 am
 

NBA owners propose hard cap, paycut for players

I think an all around cut should be made. From salaries to concessions to ticket prices all the way out to parking. It is too costly to watch a game 41 times a year, especially when the talent isn't all that wonderful to begin with. I can say confidently that you will see prices drop within the next year because owners are realizing what they need to do in order to have a solid business working in their favor.



Since: Sep 4, 2006
Posted on: February 6, 2010 10:31 am
 

NBA owners propose hard cap, paycut for players

This is the stupid line of thought that kills me.  If salaries continue to escalate the owners will be forced to continue to increase their income.  The only place that is coming from is from the FANS.  The FANS definitely deserve a BREAK!  The government's already stripping us enough.



Since: Feb 6, 2010
Posted on: February 6, 2010 7:35 am
 

NBA owners propose hard cap, paycut for players

“If they don’t like the new max contracts, LeBron can play football, where he will make less than the new max,” one team executive told CBSSports.com last week. “Wade can be a fashion model or whatever. They won’t make squat and no one will remember who they are in a few years.” This statement exemplifies the arrogance of management and pushes many people, like myself, towards being pro-player. Sometimes, management forgets who butters their bread and the players union ability to galvanize its membership from further explotation of this "Pimp-Ho" relationship is warranted.



Since: Dec 15, 2006
Posted on: February 6, 2010 2:21 am
 

NBA owners propose hard cap, paycut for players

What a bunch of crap, typical business model though. Take money away from the workers so that the administration can get more. I guess they can't deal with their pay cuts and won't wait for a recovered economy.

Obama, you are a basketball fan, bail these poor guys out!



Since: Sep 11, 2007
Posted on: February 5, 2010 10:50 pm
 

NBA owners propose hard cap, paycut for players

VIKESTOTHEBOWL if the owners just get together and decide not to pay without having it in the CBA then it is collusion.


The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com