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?

Since: Sep 22, 2006
Posted on: July 5, 2011 12:45 pm

Hard cap could mean hard times for small markets

One other point here: so a hard cap will mean salary reductions, we all agree on that.  But do we really think ticket prices will come down?  Parking?  Beer?  Ask yourself: if the players get paid less, where will the money go?  I don't expect a refund check, do you?

And, FWIW, I did have an hour-long show letting the world know I was taking my talents to Europe.  No one watched; I was heartbroken. 

Since: Sep 22, 2006
Posted on: July 5, 2011 12:41 pm

Hard cap could mean hard times for small markets

I fail to see that Miami "proves" the author's point.  LeBron was making plenty of endorsement money in Cleveland--his jersey was a best seller, he had a shoe contract to die for, and probably a fairy-dust sponsorship deal.  In any case, had he wanted to max out his exposure and endorsement money, Chicago or New York would have been much better and more obvious choices.  Great players who want endorsements will get them, no matter where they play--witness Peyton Manning.  Think Kevin Durant is hurting for endorsement money? 

No, much as i hate to say it, I actually believe LeBron's decision (I will NOT say "The Decision") was about winning.  He had five years in Cleveland, and they tried everything, but could not put together a package to get it done.  They brought in Jamison, Shaq, and a host of thousands, but couldn't make him a champion.  Miami offered Wade--already a proven champion--and Riley, proven what, eleven times over?  Throw in a milquetoast forward who can score, an aging East European center you're familiar with, and ... I see a shot at a ring.

AND THAT, my friend, is what a hard cap will bring.  Players WILL decide to go to San Antonio, or Memphis, or Oklahoma City if they see a chance to win, because they will get paid the same no matter what.  If a team like OKC can build a strong core through the draft, and the next CBA has a hard cap or accommodates those contracts, why wouldn't the "necessary piece"-- a guy like, oh, Igodalu--head down that way?  How different is his endorsement money going to be from what it was in Philly? His contract will be the same, and you know what: rings = endorsements.

Since: Dec 21, 2006
Posted on: July 5, 2011 12:20 pm

Hard cap could mean hard times for small markets

so, with a hard cap, a guy makes $10 mill instead of $20 mill a year.  boo freaking hoo.  they play a GAME.  how many cops, firemen, teachers or nurses could have an hour long tv show letting the world know they are taking their talents to south beach?

Since: Jun 24, 2008
Posted on: July 5, 2011 12:19 pm

Hard cap could mean hard times for small markets

Hard cap could mean hard times for small markets

Who cares...the NBA is not a sport, its a joke. Its a show. like wrestling .  Lock the "thugs" out.  Who sucks!!!!

Thats The Truth Truth!!!!

Since: Jun 24, 2008
Posted on: July 5, 2011 12:17 pm

Hard cap could mean hard times for small markets

Thats The Truth Truth!!!!

Since: May 24, 2010
Posted on: July 5, 2011 12:10 pm

Hard cap could mean hard times for small markets

Yeah, Kobe Bryant is going to stop playing in the NBA to go play in Italy. He is finally realizing all the financial benefits of playing the big time in Italy instead of some backstreet league like the NBA. Kobe isn't just looking to play basketball while the NBA is in a lockout, no no no, he is looking to permanently take his talents to South Europe. I don't understand how any league can survive with a hard cap, of course the NFL got lucky and managed to be the most popular sport in America with a hard cap, but again that was just luck. The NBA needs to stay away from a hard cap because otherwise all of the great talent will move to Europe where they will get paid the serious money.

Since: Sep 10, 2007
Posted on: July 5, 2011 11:56 am

Hard cap could mean hard times for small markets

A hard cap will dilute the talent in the NBA.  About 10 to 20% of the NBA talent comes from Europe. Before this lock out, teams could draft players off European teams and use their buying power to grab talent.  The European teams could not compete. With rookie salary caps and a hard salary cap the European franchises will be able to keep their talent and even recruit from the NBA talent.  Why get paid 5 million in the US when you can get more in Europe?  I have heard that the NBA's best player Kobe Bryant is mulling talks with an Italian club.

Since: Oct 5, 2006
Posted on: July 5, 2011 11:40 am

Hard cap could mean hard times for small markets

OKC got lucky by getting a guy who is actually loyal and willing to stay like Durant. But in the long run hard cap is good for small markets like OKC. You guys focus on this one example of one team too much. Hard cap will help the small teams. And OKC won't be hurt too bad, cuz this will hurt all the other good teams!!!

Since: Jun 26, 2011
Posted on: July 5, 2011 11:29 am

Hard cap could mean hard times for small markets

I think OKC is a good example of a team getting jerked by a hard cap. If you draft well, you should be able to keep the talent that you want to keep. The problem is that teams like the Wizards, Magic and Hawks sign or re-sign their young talent that do not deserve this money. Guys like Blatche, Rashard Lewis and Joe Johnson have big contracts and are not superstars. In the case of Blatche, he is not even a star. He has a 5yr-35mil contract he is playing with now. He is a role player at best. The real issue is incompetent owners and front offices. Stop paying too much for marginal players. Show some restraint and stop being fearful that another team will get him. He was a borderline talent for you. Let him go. Stop over-inflating and overvaluing guys. Front offices need to do a better job of evaluating talent for team needs. Instead of throwing good money after bad. A hard cap is designed to provide a mechanism of restraint for the owners. The problem is that the front offices will still be in positions of power. Hire better basketball management on the front end, so you don't get screwed in the back end. Pun intended.

Since: Jan 2, 2011
Posted on: July 5, 2011 11:26 am

Hard cap could mean hard times for small markets

Who cares...the NBA is not a sport, its a joke. Its a show. like wrestling .  Lock the "thugs" out.  Who sucks!!!!

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