Is Jermaine O'Neal right about the NBA Owners?

[TheNorthCydeRises]

Quote from Jermaine:

"If it's about small-market teams not profiting, if the owners are really using that as a bargaining tool, if you're really concerned about it, then why aren't you profit-sharing like the other leagues are doing?"

"So do we accept a deal that totally butchers our game? Because what they don't understand, if you take out mid-tier deals and say, 'Fend for bare minimum at the bottom,' they'll be individualizing our game so severely."

Think about the point he makes for a second. And think about how that would relate to our situation here in Atlanta.

Right now, the big dog who is getting paid is JJ. Also right now, the worse contract on the team is Marvin. Horford is signed long term. Smith's deal ends in 2 years. Teague still has 2 years on his rookie deal.

If Jermaine is correct, any guy who is not making the big money contract, but may be up for a deal, is going to be more concerned about getting his numbers, than possibly worrying about team play.

Now this already goes on during contract years. If the owners have their way, the difference now would be that you would see this every year from a lot of players that have no business trying to do more than they're capable of doing. If the owners get their wish and have a hard cap + non-guaranteed contracts, you may see all kinds of mid to lower tier players just going out and trying to put up the best numbers they possibly can.

How does that relate to the Hawks?

Imagine a guy like Teague or even Marvin taking ill advised shots in a game, in order to pad their stats. In other words, would you see players across the league with a Jordan Cra-ford mentality, in which guys are just going out and chucking up shots?

Even if the owners get their way, the one thing that will be true is that these owners are still going to pay top dollar for the superstars. And guys who are on that 2nd tier of stars are still going to get paid. But if a hard cap basically eliminates the mid-level guy, how is that mid-level guy going to get more money?

By trying to show their perspective teams that they're better than what they are . . even if they're not.

[Diesel]

Hardcap and Non-Guaranteed contracts would be disastrous for basketball. Basketball is different from football because in Basketball, one guy can make a huge difference. The owners want everything. They want to be able to move on from their mistakes. I say no. If you have an idiot GM, you have an idiot GM. It doesn't spoil the game, it actually makes the game better. Imagine if every year, teams can get rid of the guys they don't want anymore and get a new guy? Sure it sounds good but in actuality, the elite teams will always be elite. Guaranteed contracts means, that Miami is stuck with Bosh and no big man. Guaranteed contracts means that NJ just can't buy a championship.

The hardcap is something that may be what the owners really want. It lets them know how much they will spend.

The players shouldn't give in on everything.

[Vol4ever]

The only way for the NBA to allow small market teams to survive and be compettive is level the playing field.

For example right now, Labron took less money to play with a dream team in Miami that made the finals instead of excepting big money from Cleveland. If the Lakers, Knicks, Chicago, or other big market team wants a player they go out and get that player no matter the cost under the current contract deal. Big market teams laugh at a luxury tax.

Even if the NBA made a hard salary cap that everybody had to abide with, the big market teams woould just sign a superstar player for less money than he could get with a team like Atlanta.

This sounds crazy but a hard cap should be put on the big market teams and small market teams like Atlanta should not have a cap. That is the only way the small teams like Atlanta can attract the top players in this league.

Fire away..........

[TheNorthCydeRises]

LOL @ calling us a "small market" team, when you have 4 million+ people living within 50 miles of ATL. That would be a hard sell to a real small market team like Memphis, who barely have a million people within that same radius.

I get what you're saying though. The "mega markets" don't mind at all going over that luxury tax threshhold to get a player, especially when all they have to do is trade away a few expiring contracts. I guess an elimination of the luxury tax is really what is needed.

Once the owners get the deal that they want, they're still not going to be satisfied 2 years later, when you have those same teams that traditionally don't do well, still not making a "profit".

[AHF]

The NBA is going to introduce a new revenue sharing platform. They just don't want to do it and then hear Jermaine O'Neal say "Now the players don't need to give the owners anything because revenue sharing solves the problems for the teams that are losing money today."

I think O'Neal is right that revenue sharing is needed, and I fully expect more robust sharing will happen with the next CBA.

I don't know that I buy his argument that a hard cap would lead to destructively individualistic play - particularly if smart GMs reward the guys who do the most to make their teams winners and not the guys who chuck the most shots to maximize their ppg.

[Swatguy]

LOL @ calling us a "small market" team, when you have 4 million+ people living within 50 miles of ATL. That would be a hard sell to a real small market team like Memphis, who barely have a million people within that same radius.

I get what you're saying though. The "mega markets" don't mind at all going over that luxury tax threshhold to get a player, especially when all they have to do is trade away a few expiring contracts. I guess an elimination of the luxury tax is really what is needed.

Once the owners get the deal that they want, they're still not going to be satisfied 2 years later, when you have those same teams that traditionally don't do well, still not making a "profit".

5.7 million 'Cyde.

The owners do not want a "Hard Cap", it is a smoke screen. The owners want to reduce the players 57%-43% of basketball related income.

The owners want to reduce it to 53-47 or closer to 50-50. The owners do not want to pay the luxery tax. They want to take the difference in BRI and install a merit-bonus type incentive to pay salaries over the cap.That is what they want. They are after the BRI to pay for over the cap salary. To do that is to introduce revenue sharing of that said difference in BRI.If reduced to 52-48 that difference is 5%. That 5% spread to the 32 teams represents the amount of payables over the cap. NOBODY wants a hard cap, not even the owners.

[TheNorthCydeRises]

The owners don't want a hard cap? You sure?

http://probasketballtalk.nbcsports.com/2011/07/05/report-nhl-owners-tell-nba-brethren-losing-season-%E2%80%9Cworth-it%E2%80%9D/

And this is a good article on the potential impact of a hard cap in the NBA

http://www.sbnation.com/nba/2011/9/14/2424499/nba-lockout-2011-hard-salary-cap-david-stern-derek-fisher

[TheNorthCydeRises]

As far as the revenue sharing issue goes, I'm sure the Lakers aren't going to be happy if not only a hard cap is implemented, but is also told that they have to share some of their lucrative cable and local TV money to the "poor" teams.

Without significant revenue sharing, the teams that are struggling now will continue to struggle, unless they somehow acquire a superstar that can sell tickets.

That audio clip of David Stern talking for about an hour about the NBA labor negotiations, had Stern saying that having everybody on an even playing field will be good for the league. His theme was "parity". Parity and the economy is why the owners need a different financial structure in the NBA.

It's good in "theory". But unlike the NFL, I don't know how many people would be hyped up to see a Charlotte - Sacramento NBA Finals, if they didn't have 2 of the top 5 players in the NBA playing for those teams. How many fans would like an Atlanta - Memphis NBA Final, if the current rosters on each team made it to the Finals? Conversely, NFL fans would still watch a Miami - Washington Super Bowl . . simply because it's the Super Bowl.

And we all know that because this is a superstar driven league, the teams with the superstars on them are the ones most likely to win. Unfortunately for Stern, there are not 30 superstars in the NBA. There are barely 5 or 6 "franchise changing" superstars in the NBA.

[TheNorthCydeRises]

More indication that the NBA owners definitely want a hard cap. Specifically listen and watch the video.

http://espn.go.com/nba/story/_/id/6972265/nba-lockout-nfl-union-head-demaurice-smith-address-players

[thecampster]

I'm always amazed when I see people like us arguing the case of millionaires against millionaires.

Fact: Lebron could make the jump to Miami because the relative small difference in salary between Cleveland and Miami was chump change compared to the whole of his total contracts over time and his endorsements.

Fact: 3 years at the vet minimum is a lifetime of earnings for most of us.

Fact: The NBA mimimum salary is a half million dollars for a rookie and about 1 million for a 10 year vet. This does not include per diem or other allotments/endorsements.

We love the players guys but the harsh reality is that the game has gotten too big. Think about the cost of going to the game. I went last year. Got cheap seats for 3 people. $100. Hit the concession stand. $50 for the night. The average family of 3 can't afford $150 a night in this economy on a regular basis. TV revenues are going to take a huge hit because of the economy as advertisers have less to spend.

Quality owners will not stay in the game if they can't turn a profit similar to other industry. That will affect the play as much as anything. Try to remember that the players union isn't like the plumbers union. 1 - 3 year contract and good financial management and you should be set for life.

Piling on to my own statement. Marvin should never have to work another day in his life. Joe will have made about $200 million in contracts when his current deal is up.

The players aren't suffering. They're making millions to play a game that you and I play with our family for free.

Edited September 16, 2011 by thecampster

[AHF]

I have no problem with the players and collective union getting high salaries that most people find ridiculous as long as the business model makes good sense. Currently, the players have a ridiculous 57% of revenues before most expenses (compared to 48% for the higher revenue NFL). Their latest proposal was around a 53% split (with members in the press saying they would go down to 52 or 51%) and with the owners wanting a 50/50 split or better.

No matter what the percentage is, if the revenues increase then player salaries increase and if revenues decrease then player salaries decrease. The players aren't the ones driving costs - they are the ones riding the wave of revenue.

My perfect model would probably be a 50/50 split of operating income (which unlike net income excludes debt financing and similar charges that are born by the owners who have chosen to finance their teams rather than buy them in cash). The idea is that if you spend $20 in operating expenses running the business and generate $100 in gross revenues then you subtract the $20 from the $100 and the players get $40 and the owners get $40. The books should be audited by an auditor chosen by the union that is under an obligation of confidentiality.

This would incent owners to maximize revenues which would maximize player salaries as well.

I would also institute significant revenue sharing among the teams, franchise player tags (which entitle the franchised player to the max salary +5% of which the +5% doesn't go on the salary cap), limits on guarantees of contracts (allowing players and teams to negotiate buyouts on whatever terms they want and giving owners the unilateral right to cut a player with perhaps 80%/75%/50% of the current year and next two years of a players contract meaning that a player who signs a 5 year $105M contract for $19M, $20M, $21M, $22M, $23M can be cut in year 1 for $40.7M, in year 2 for $42.75M, in year 3 for $44.8M, in year 4 for $34.85M, and year 5 for 18.4M), raise the age limit to 20, and a combination of higher salary floors and tighter restrictions on high paying teams (either hard cap with no exceptions or a much more draconian luxury tax).

Edited September 16, 2011 by AHF

[DJlaysitup]

...My perfect model would probably be a 50/50 split of operating income (which unlike net income excludes debt financing and similar charges that are born by the owners who have chosen to finance their teams rather than buy them in cash). The idea is that if you spend $20 in operating expenses running the business and generate $100 in gross revenues then you subtract the $20 from the $100 and the players get $40 and the owners get $40. The books should be audited by an auditor chosen by the union that is under an obligation of confidentiality...

Not that it matters (because that will never happen), but that would be a total disaster for the players. It would be ripe for crookedness by the owners and the ensuing lawsuits would be many. Basically you could buy tangible assets for the "good of the team" at half price - players paying the other half....and the owners would own those assets.

[dlpin]

The owner's stance on hard cap is basically a PR move to be able to say that this is all about competitive balance and the like, and not money. I guarantee that if the players accept whatever percentage the owners want of the revenues, the owners will take it and not hold out for a hard cap. As evidence for that I point to the owners essentially giving up on the hard cap when there was a chance of a deal in june:

http://ken-berger.blogs.cbssports.com/mcc/blogs/entry/11838893/30170072

On top of which, Stern has recently proposed a team based hard cap

http://espn.go.com/blog/truehoop/post/_/id/32015/ready-to-negotiate-that-hard-cap-david-stern

Which pretty much would be a soft cap by another name.

The renewed emphasis on hard cap and non guaranteed contracts is nothing more than a PR move by a league, since saying that it is all about giving the small markets a chance is a more popular proposition than saying it is all about the money.

So regardless of whether you think the players make too much or too little, issues like hardcap and guaranteed contracts are window dressing to pretend that this isn't about money.

[AHF]

On top of which, Stern has recently proposed a team based hard cap

http://espn.go.com/b...cap-david-stern

Which pretty much would be a soft cap by another name.

I'm not sure I follow that. The NFL has team based hard caps. A league-wide cap would mean that teams could spend different amounts and that the total salaries of all teams would need to add up to a certain amount. A team based hard cap is what we think of as a hard cap - each team has a maximum they can spend and they can't exceed that amount so that teams like the Lakers can't spend 3x the amount as other teams.

[thecampster]

A basic structure I would propose would look more like this.

Teams have 12 mandatory and 3 optional roster spots. Teams have a low/mid/high range for player salaries.

Teams must have a mandatory 3 low, 3 mid, 3 high range players. The other 3-6 slots are optional low/mid level slots with a maximum of 5 in any one category and a max of 4 high level players. When signing players, teams can only use the slots available (ie 5/5/4 for a maxed team or 6/5/4 but not 5/5/5 ). So if the Lakers already have 3 high level players, they can't sign a player for a high slot salary.

Part 2 of the plan is salary/slotting of player salaries. Remember these are all "suggested". Real salaries are up to the professionals. First you need the drafted rookie scale (starting at 1 million through 3.5 million based on draft position. No holdouts possible. All count as low salary slotting). Low tier salaries could start at 500,000 for an rookie and rise to 1.5 million for a 7+ year vet. Mid level salaries would start at 4 million to 8 million based on years of service for a 4 -7+ year vet. (Rookie salaries end after 3 years). High level salaries of 12-15 million a year based on 4-7+ years of service. All salaries and year limits are optional. This is just a beginning framework.

Part 3 of the plan is a requirement on trades that rosters must match what is listed above. This stops deadline deals to drop salary or waive players after trades and moving them to a new team. This removes salary cap restrictions on trades as they currently exist. If a good team with only 3 high level players wants a 4th high level player from a team with 4 high levels, it would be allowed. But if a 3 team wants to move to 4, it can't trade with a team that only has 3 and would end up with 2. The slots must be met at all times.

Years are up to the team/player to negotiate with a 5 year maximum.

Edited September 18, 2011 by thecampster

[dlpin]

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<p>I'm not sure I follow that. The NFL has team based hard caps. A league-wide cap would mean that teams could spend different amounts and that the total salaries of all teams would need to add up to a certain amount. A team based hard cap is what we think of as a hard cap - each team has a maximum they can spend and they can't exceed that amount so that teams like the Lakers can't spend 3x the amount as other teams.</p>

<p>

Yeah, sorry, I rushed that last part and wrote things poorly. I meant to say that the first thing Stern said was negotiable was going from a team based cap to a league one again, which is essentially the soft cap position.

Since this is going to drag on, the PR part of it becomes important, so both sides have to pretend that this is about something other than money. On the owner's side, that means talking about competitive balance and pointing to overpaid players (which is completely misleading, since there is a fixed share of revenues that go to players, overpaid players are hurting other players, not the owners)

Edited September 19, 2011 by dlpin

[Swatguy]

5.7 million 'Cyde.

The owners do not want a "Hard Cap", it is a smoke screen. The owners want to reduce the players 57%-43% of basketball related income.

The owners want to reduce it to 53-47 or closer to 50-50. The owners do not want to pay the luxery tax. They want to take the difference in BRI and install a merit-bonus type incentive to pay salaries over the cap.That is what they want. They are after the BRI to pay for over the cap salary. To do that is to introduce revenue sharing of that said difference in BRI.If reduced to 52-48 that difference is 5%. That 5% spread to the 32 teams represents the amount of payables over the cap. NOBODY wants a hard cap, not even the owners.

Again this is what the owners want.

http://www.nba.com/2011/news/features/steve_aschburner/09/20/revenue-sharing-still-vital/?ls=iref:nbahpt1

[Swatguy]

5.7 million 'Cyde.

The owners do not want a "Hard Cap", it is a smoke screen. The owners want to reduce the players 57%-43% of basketball related income.

The owners want to reduce it to 53-47 or closer to 50-50. The owners do not want to pay the luxery tax. They want to take the difference in BRI and install a merit-bonus type incentive to pay salaries over the cap.That is what they want. They are after the BRI to pay for over the cap salary. To do that is to introduce revenue sharing of that said difference in BRI.If reduced to 52-48 that difference is 5%. That 5% spread to the 32 teams represents the amount of payables over the cap. NOBODY wants a hard cap, not even the owners.

This Again.

[Swatguy]

This Again.

5.7 million 'Cyde.

The owners do not want a "Hard Cap", it is a smoke screen. The owners want to reduce the players 57%-43% of basketball related income.

The owners want to reduce it to 53-47 or closer to 50-50. The owners do not want to pay the luxery tax. They want to take the difference in BRI and install a merit-bonus type incentive to pay salaries over the cap.That is what they want. They are after the BRI to pay for over the cap salary. To do that is to introduce revenue sharing of that said difference in BRI.If reduced to 52-48 that difference is 5%. That 5% spread to the 32 teams represents the amount of payables over the cap. NOBODY wants a hard cap, not even the owners.

I believe the magic number is 51-49. And then they can play in the gym.