Tuesday, May 17th, 2011 at 9:00 am  |  25 responses

Report: NBA Owners Proposed a $45 Million Hard Salary Cap

When David Stern and NBA team owners say they want to limit player salaries, they’re being very serious. Deathly so. SportsBusiness Journal has the details: “The NBA’s initial proposal for a new collective-bargaining deal called for a $45 million per team hard salary cap along with non-guaranteed player contracts and significant cuts in annual salary increases. The details, spelled out in an April 26 memo issued by National Basketball Players Association Executive Director Billy Hunter, marks the league’s push for a major overhaul of the NBA’s economic model and emphasizes to players an aggressive bid to significantly slash costs and shorten contracts. The memo was sent to all NBA players and was dated just days prior to the league delivering to the union a new labor proposal, which a source said still included the $45 million hard cap but added a phase-in of the cap over a few years. Union president Derek Fisher publicly dismissed the latest proposal as too similar to the original proposal. The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent. Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap. The proposed hard cap is something the NBA has never had under collective bargaining, but it has become a critical element to owners. This initial proposal, and its steep cut in player cap space, demonstrates a strong commitment by the owners to dramatically curtail player payrolls while also supporting NBA Commissioner David Stern’s mantra of making the league more profitable.”

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  • neaorin

    Scare tactic by the owners, they know the PA won’t go for that but wanted to put their foot down. A $45-50 million soft cap and shorter guaranteed contracts (no more than four years) should do it. Besides, I thought a lot of cheap NBA owners were in love with the luxury tax.

  • http://Slamonline.com Caboose

    Assuming the league does institute a hard cap that is somewhere around say $50-55 mil, what happens to teams who have a good $80 mil in salaries? Can they just invalidate the contracts of some players? Anybody know how it would work?

  • Yann Blavec

    I guess everyone is going to earn 25 to 30 % less, simple as that.

  • DreJayAre

    If you have a hard cap, Shouldn’t the number be higher? Only Sacramento would be about to suit up next season. Voiding contract seems illegal in so many ways, so idk how it would all work out. Then again, nobody made you give Rashard Lewis, Gil and Joe Johnson max deals. Looked at hoopshype, how the hell are the Bulls 26th in payroll? They have 10 players under contract for at least the next 2 seasons.

  • neaorin

    They won’t void contracts (illegal IMO), but they probably will add something similar to the 2005 amnesty clause, where they will be able to choose one or more contracts which won’t be counted against the cap.

  • http://www.slamonline.com Cheryl

    I can see shortening contracts and lowering the annual increases. But a hard cap? I’m betting there are some owners who don’t even agree with that one. Cuban, Arison, Buss, Dolan anyone?

  • http://nba.com EJ

    Stern and the owners suck.

  • Groves

    lower the percentage of basketball related income that determines the cap to a point where its at 45-50 million this coming year. keep the soft cap, eliminate the MLE. lower the number of years contracts can run for, lower the yearly increses by a couple of percent. make contracts 65% guaranteed, maximum. keep the luxury tax at its current rate, progressively lowering the % of basketball related income it is determined by. maybe include a contract tenure clause for deals to be 80% guaranteed for long serving players

  • neaorin

    Cheryl: exactly, rich owners want the ability to spend, and cheap owners want the extra luxury tax revenue. That’s why I believe the hard cap thing is just a negotiating tactic.

  • Groves

    maybe include the nba’s heavily modified franchise tag proposition in the CBA.

  • http://www.slamonline.com Cheryl

    Either way, enjoy the playoffs folks, cuz I see a long lockout eating most of next season.

  • http://www.slamonline.com Cheryl

    Some iteration of Groves proposal sounds more reasonable. Groves, are you part of the negotiating team? ;)

  • http://www.slamonline.com Eboy

    I agree with Cheryl, there won’t be much of a season in 2011-2012. A fu*king shame all these rich mother*uckers (players AND owners both) can’t just agree that they both make ludicrous amounts of money and move on with an agreement that is deemed fair. Using a mediator shouldn’t be such an alien concept here….from an entirely different field of business would be the better option, who wouldn’t be swayed by either the players union or the owners groups. The NFL will hammer their sh*t out before the season starts cause those teams know they can’t afford to miss games again and will maximize their revenue and profitability. The NBA? I mean, STILL, there’s a huge segment of people that could care less if the NBA played a 40 game season…..that’s what they may be shooting for here…another miserably shortened season and just as the ratings and competition in the league has built itself up to an incredible level…they may fall back to the disinterested level it had been in the early 2000′s. A fuc*king shame.

  • Vince5

    Cutting the cap 13M$ + making it a hard cap? Not a great move, pick one or another.

  • ThaWindy

    The Bulls vs Heast series doesnt vote well for the league and teams that claim numbers are not what they seem. I guess if Im a player I feel like were doing our part by making the game interesting again. The last thing that should be affected is my salary.

  • 2dope

    How can owners justify a 45mil hard cap when It’s at least $200-400 for a decent seat to watch a good team. Add injury/lemon-law clauses to the salary cap and reward teams that draft well buy allowing them to pay them and keep them without killing their cap. Can’t help but think theses owners are gettin’ over!

  • http://www.twitter.com/nflem41 Nicolas Fleming

    The opposite of expansion is key. I don’t know what the exact wording for that is. Somebody hacked my Twitter account or something.

  • JTaylor21

    F*ck David Stern and the Owners

  • http://www.youtube.com/user/officerbarbrady what

    The luxury tax is bad for competitive balance. Rich teams don’t care about going over it, and poor teams treat it almost as if it’s a hard cap. All it does is segregate the haves from the have-nots even further than they currently are. I would just change the luxury tax threshold into a hard cap and keep the lower soft cap.

  • MikeC.

    In my opinion, the main thing that needs to go is the midlevel exception. That clause is the reason for some of the worst contracts in the league. The players that get the MLE aren’t good enough to get a max level offer, but they’re too good for the minimum, so they end up with the MLE. To take the players’ side (which I usually don’t), nobody made Isiah give Jerome James $36 million. Nobody made Denver give Al Harrington all that money. The owners sign the checks. At some point you’d think an owner would say “you know what Mr. GM? I don’t think this guy is worth that much money. Instead of giving one mediocre guy a big amount of money, let’s give three guys smaller amounts of money so we can trade them or cut them if they don’t pan out.” Am I alone in thinking that the owners did this to themselves because they were afraid to just say “nope, he’s just not worth that much.”

  • alphabetaherculis

    Ask Stern to take a pay cut from his undisclosed annual salary…rumored to be around $10/mil/yr.

    Why does the NBA have a office in an expensive part of Manhattan and have Stern sit there all day making bread, while everyone who plays ball takes a salary cut? Move his office to bumble****.

  • Bye bye

    The heat won’t be able go sign a big man if this is a real proposal
    Or the lakers and they would lose one of their top players meaning bosh
    An bynum would not be afforded

  • flipnoyce

    With all these BIG 3 goin on, to have a player that makes more than 20 mil is ridiculous. Bron, Wade, Bosh are already at $45 mil just for example.KG. Pierce, Allen from C’s. Kobe, Gasol, Bynum from LA are all over the cap. That means teams can’t sign anybody else with these current proposal. Its going to be a lonnnnnnnngggg negotiation. Dislike Greedy mofos specifically THE owners!

  • blackthougth

    thats bogous B.S. who`s tellin`the owners 2 pay the players like they`re doin`now? no one! they`re the ones who`re in charge, & if they don`t wanna spend $100m per on a team noone forces them 2, but then they might have 2 accept losin`!

  • http://www.dbcmusiconline.com Sam Small

    It always made me laugh when free agency comes and these owners spend this money, then two years later, regrets the move. For Starters, Stop expanding. If Teams can’t cut it, cut em. You now have guys who have absolutely no business in the game. second, Make college three years or make a full fledge minor league system like in Baseball. Too many of these young players are seriously lied to, and come out when they really need the seasoning of college.