Blog Entry

League puts warning in writing

Posted on: February 19, 2009 9:43 am

We told you Friday that David Stern painted a grim financial picture in his meeting with league GMs during All-Star weekend, warning them them of falling projections for season-ticket and sponsorship renewals in 2009-10. Since the salary cap is set every year based on revenue in the previous season, the cap and luxury tax levels could go down in 2010-11. That's the season half the league is clearing cap space for, hoping to make a run at marquee free agents LeBron James, Dwyane Wade, Chris Bosh, and others.

Chances are, they'll have to clear more space than anticipated.

The message Stern gave the GMs was a bit different than the one he gave publicly in his annual All-Star address Saturday night. In any event, just in case anyone wasn't paying attention, the league office sent out a memo to all 30 teams on the eve of the trading deadline, warning them in writing of the possiibility of drastic reductions in the salary cap and luxury tax going forward, sources told The memo was first reported by Yahoo! Sports.

Two team executives I spoke with didn't find this particularly surprising. "We all have had this pounded into our head, trust me," one of them said. "It should not come as a shock to anyone." Of course, don't underestimate the league's ability to put a scare into the players' association. Now that Stern and Billy Hunter officially have begun negotiating an extension to the CBA, all bets are off.

Teams still have plenty of time to get their books in order for '10-'11, but the league's emphasis of declining revenue could have a chilling effect on trading Thursday. Then again, if your front office has projected that you'll be comfortably under the tax in two years, what happens if you realize the tax level will be lower? Gotta get rid of more contracts ...





Category: NBA

Since: Jan 13, 2009
Posted on: February 19, 2009 2:18 pm

League puts warning in writing

With that crop of players and everyone trying to get in the sweepstakes, it seems like people will be getting rid of contracts and playing with 8 or 9 players to get the cap space.  This is going to make for some extremely lopsided trades to clear money.  This might end up being great for the small market teams if they get cash as well in order to not take as big of a hit.  This is going to be nuts.

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