Blog Entry

Hard cap could mean hard times for small markets

Posted on: July 4, 2011 12:05 pm
Edited on: July 5, 2011 9:37 am
 
Posted by Royce Young



NBA owners want a hard cap. It's probably one of the three biggest reasons we're stuck in a lockout right now. Owners want a hard cap, or at least one they're trying to disguise by calling it a "flex cap," and the union has basically said they will never, ever accept a hard cap.

And when the hard cap topic is brought up, people always wonder how a $55 million hard cap would affect a team like the Miami Heat. Between Dwyane Wade, LeBron James and Chris Bosh, those three soak up about $47 million on the Heat payroll. And that's just for 2011-12. In 2013-14, that number will be about $58 million, so even the suggested $62 million "flex cap" the league talked about would leave the Heat only $4 million to fill out their roster.

The super-together, we're-a-real-team Mavericks? Yeah, their total payroll added up to nearly $90 million last season, third highest in the league. That's about $30 million over the current salary cap but because it's a soft cap, it was fine. (Fine in the sense it didn't break any rules, but still, pretty outrageous.)

The feeling though with this hard-cap business is how much it'll affect teams like the Lakers, Heat, Bulls and Knicks. Now their greatest assets -- money and market -- don't mean as much because in a hard-cap system, signing multiple big contract stars just isn't an option. Victory for the small markets, right?

I'm not so sure about that.

I wonder about a team like the Oklahoma City Thunder, one of the smallest-market teams in the league. The feeling is that a hard cap would help smaller markets compete because talent would get distributed a bit more evenly throughout the league. With teams unable to pay a bunch of guys on the roster $15 million or go $30 million over the cap line, either players would have to take a serious pay cut or go somewhere else.

Except in the case of the Thunder, a straight hard cap would destroy them.

Kevin Durant just signed a five-year extension that will pay him around $16 million a year. Russell Westbrook, an All-Star point guard at the age of 22, is eligible for an extension and would probably have it if there weren't a lockout. He's probably a max player or close to it. So that would be another major mark on the cap for the Thunder. Then the other guys -- Serge Ibaka, James Harden, Eric Maynor -- are all eligible for extensions next summer.

If the league has a stiff cap of even $60 million, how can the Thunder dream of re-signing these guys and keeping the core intact?

Answer: They can't.

That has been Thunder GM Sam Presti's plan since Day 1, though. He wanted to draft a bunch of young guys and let them grow together. Let them progress, develop and become a team all together. And when they did, lock them all up long-term and have yourself a contender for the next decade. It has worked. The Thunder just went to the Western Conference finals with one of the youngest teams in the league and should be in the mix for at least the next five.

Unless of course they have to let a couple of their big pieces walk.

Last season the cap was set at $58.04 million and the Thunder were one of only five teams under that number. While a lot of smaller markets prefer not to bust into luxury tax territory, most likely OKC would be there after those key pieces were extended. So while they're under now, that probably wouldn't be the case in the future.

Reality is, a hard cap might have more of an affect on the little guys, which is who the league wants you to think it desperately wants to protect. But basically, with a hard salary cap system, building through the draft and letting a core grow together is no longer the way to go. Put together a roster with five good players that need extensions and you're out of room after three. Maybe you can get four, but how do you add another nine guys to fill out a 13-man roster?

What we might see is the Maverick Plan instituted as the way to win in the NBA. Now again, they totaled nearly $90 million, but I just mean the idea. Grab one star player and fill in the rest with a couple rookie-level contracts and a bunch of aging veterans willing to take $5 million or less. The Mavs had one star and everyone praised them for it. But in a hard-cap world, that might be best philosophy.

Because a team of Durant, Westbrook, Harden and Ibaka probably can't exist just as one of LeBron, Wade and Bosh can't. Doesn't exactly seem right, does it? The idea is a hard cap would help restore some competitive balance and the bigger markets wouldn't be able to just dwarf the small ones by going $30 million over the cap like the Mavericks did. The Thunder would never do that.

At the same time, while the playing field might be leveled in terms of payroll, it could come at the cost of breaking up the band and redefining how a small-market team must build.

Every team that's using the draft to build -- which is the sound and socially blessed way to structure a team -- would have to reconsider. The Cavaliers might've just committed 80 percent of their future cap to Kyrie Irving and Tristan Thompson if those two pan out. Same for the Jazz with Enes Kanter and Alec Burks. The future for those teams might be just enjoying the four years you get with them on their rookie contracts and then choose one to keep. I don't really think that's what the NBA has in mind, but that's going to be what happens. Small markets probably will take the brunt of a hard cap much harder than the big ones. Or at least the good small-market franchises that understand how to build.

Who knows what the NBA landscape will look like when the dust clears in this lockout mess. The players have taken a hard line on a hard cap and supposedly will refuse to back down. The owners though are committed in their efforts to get one. Yeah, it'll reduce salaries. Maybe the system will stay the same but just instead of Harden getting a $10 million-a-year extension, he would get $6 million. That's possible.

But this is the NBA and just because a new salary system is in place doesn't mean the league doesn't have impulsive general managers that are ready to snatch away a player like Harden and give him that $10 million a year simply because they know the Thunder can't go that high. That'll be the world teams operate in. One where the Thunder Way is no longer the blueprint for small-market building success.

Maybe the players have a point, huh?
Comments

Since: Mar 4, 2008
Posted on: July 4, 2011 2:36 pm
 

Hard cap could mean hard times for small markets

Or you don't pay as much for the "stars" as they think they are worth.  Westbrook is not a max contract player.  He is way to inconsistent to get that type of money.  There are very few "max contract" players out there.  Lebron, Kobe, Wade, Durant to name some.  But some of these contracts that are going around right now are to much.  That is why the cap is such an issue.  It is due to the owners that lock oin long term contracts to players that shouldn't be earning 50% of what they are getting paid. 

Start paying the players contracts that fit what they are worth, both to the team and the community.  There should be very few max contracts and one year at playing at a high level shouldn't lock a player in to outrageous contracts.



Since: Oct 3, 2006
Posted on: July 4, 2011 2:35 pm
 

Hard cap could mean hard times for small markets

Why is the NBA and NBAPA unable to meet somewhere in the middle? THe NBA wants a Hard Cap of roughly 55-60 million, the PA would never except that. Why can' the owners give a little and  propose a cap of roughly 65-75 million, that may be an option the PA cannot turn down. Add a clause were a team can drop one bad contract, or even renegotiate contracts with players in order to best fit the salary cap. Teams like the Orlando Magic will have HUGE problems with a hard salary cap considering paying over 54 million dollars in Hedo Turkoglu, Gilbert Arenas, and Dwight Howard. The owners need to budge a little bit.

A lot of people believe the owners are correct in the sense that if there is a hard cap, players will receive less money, and yes that is very true. I've heard from many people that there is nothing wrong with that and if the players do not like it, they don't have to play basketball. But the fact that the matter is, if smaller market teams such as Oklahoma City have a hard cap imposed, then the younger playerd who make the core of there team will eventually be decimated because players like Russell Westbrook and Kevin Dyrant both will be unable to sign Max contracts with OKC. And both of those players will almost definetely leave OKC if a team who is possibly able to offer them a max contract.

But it must also be considered that if there is a Hard Cap that many smaller markets will have a better shot of competing.  A team like the Miami Heat will not be able to pay all three of their stars (LJ, CB, and DW). Teams like the New York Knicks will be unable to sign a player with Dwight Howard Stature because they have giant contracts with Amare Stoudemire, and Carmelo Anthony. Not even including the contract of Chauncey Billups. The hard cap now does not allow teams to become "superteams". If the cap were to stay soft, you would have the same teams competing for the championship every year. Dallas, Miami, LA, Boston, and even Orlando because they can very easily become a star caliber team again.

And Folks, were not talking about differences between a few thousand dollars. Were talking about the distribution of over 3 billion dollars! The Owners are never going to give into the PA when were talking about that much money. Even as much as the owners would hate to see it, we can very easily see a lockout through the entire 2011-2012 season. There is a very strong possibility it could happen.


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