Wednesday, June 22nd, 2011 at 9:05 am  |  21 responses

NBA Team Owners Proposing $62 Million ‘Flex-Cap’ to Players

During the big labor meeting in New York yesterday, David Stern and NBA team owners proposed a “flex-cap” to the skeptical players, an idea borrowed from the NHL. The Boston Globe reports: “The NBA owners offered the league’s players a $62 million ‘flex cap’, commissioner David Stern revealed Tuesday at the Omni Berkshire Hotel in midtown Manhattan, a plan that deputy commissioner Adam Silver said is similar to the current National Hockey League salary structure. Owners and players met for four hours today and the league offered more details about their proposal, which would set a $62 million salary limit for all teams that could be exceeded by teams re-signing their own players to contracts (Larry Bird Rule) and mid-level exception contracts. However, this proposal is dramatically different than the current plan that sets a $58.044 million salary cap and levies a dollar-for-dollar luxury tax at teams that exceed $70.3 million, which the Celtics have done the past several seasons. This plan would set a median for salaries for all 30 teams at $62 million, and if the total aggregrate salaries exceeds that amount, the players would financially be obligated to make up the difference. Under the current system, the players bear no responsibility for teams over the salary cap. Eight percent of players salaries are withheld in case those salaries exceed the the 57 percent of players revenue and they is returned to the players if they don’t. The players did not respond to the owners’ proposal and requested another meeting for Friday in New York. The current collective bargaining agreement expires June 30 and the owners have threatened to lockout the players, similar to the current NFL situation.”

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  • hushabomb

    If I’m reading this correctly, if this was instituted, if a team goes over the salary cap, the players are advised to make up the difference. Exactly where is that money going to come from? And would the players have to pay on a individual level or can the players chip in and share.

    It looks like it can work on paper yet players having to pay if a team goes over. May not wash.

  • http://www.slamonline.com Cheryl

    This seems untenable unless players are involved in who the team signs and for how much. How can owners ask players to “give back” money when they are the ones that make the decisions to sign the players that take the team over the cap? That just sounds dumb to me, if I’m understanding this right.

  • IndyB

    Is revenue sharing even on the table?

  • r2j

    If you’re Miami, LA Lakers and Dallas, hold your breath. If you’re Oklahoma City, your championship window just got bigger.

  • MikeC.

    My primary concern is that the lockout date is coming sooner every day, and the union and league officials put in a 4-hour work day? Come on guys! The rest of us put in 8-hour days so we can make enough money to live. You guys are fighting over how to divvy up billions of dollars and you can only put in a 4-hour day?

  • JH14

    Good comment MikeC….I was also like “4 hours???”

    There will be a lockout…and maybe it`s good…because…if I could get…say 1000 dollars/month I would play in the NBA…and then there`s always some crappy players who get a million and maybe play 15 minutes the entire season.

  • IndyB

    This wont fix the competitve balance issues that the league faces today. The NFL is so successful because, no matter where you live, your team has a chance to build towards a title, as long as it is managed well. In the NBA big money in big markets can cover up alot of mistakes, and the teams in the small markets lose money even if they were to sell out all of the games. It is a competitive balance issue. People in small cities know that they really dont have a chance to build towards a title. Even with revenue sharing the larger markets will always be a free agent draw. They will still have the advantage. If the cap is calculated by a % of shared Basketball Related Income, than the bulk of that income should be shared. The League as a brand will be better for it if they level the playing field.

  • Jake

    This would be awesome for the league overall.you wouldn’t have the rich getting richer effect anymore, and even though it would hurt the lakers sort term, it would help the league as a whole.this will also help squash the ” big 3 fever” that has taken over the league.time to play team basketball guys!

  • http://slamonline.com Allenp

    The League is saying it will eliminate the “escrow” account it currently maintains, in favor of increasing the overall salary cap, but then penalizing players if the owners decided to exceed that salary cap?
    That seems to be shifting the burden to players for the way owners and general managers manager their teams, under the flawed assumption that the players should be worried about the overall health of a team when they are negotiating the best personal deal for themselves.
    That’s quite devious.
    To many fans it will look like the NBA made more money available to players, but in the long run, it allows owners to tax players if they are being spendthrifts, and threaten players with losing money if they allow their friends to be “greedy.”
    Interesting plan. I actually supported the plan that made less of the contract guaranteed if those guarantees are based on particular performance standards agreed to by both parties. That seems way more equitable. If you can’t get your stats and the team doesn’t get its stats, then you don’t get paid as much. The players can still get shafted based on poor decisions, but it does provide and incentive to make things work.

  • T-Money

    the owners’ proposal also include a TBD salary limit above the 62 mil median. so… essentially a hard cap with a twist. lipstick on a pig.

  • http://slamonline.com nbk

    Sounds like the owners are trying to pull a fast one on the players. How can you take someone’s contracted income away from them? Or does the “penalty” only take place for the following season. Like say the median salary in 2011-12 for all 30 teams is 65Million, does that mean the following year the designated flex cap falls to 59Million to make up the difference from teh season before? Or are the majority of players in the league going to get a smaller last check in order to collectively make up for the higher then target number? I don’t understand how this would work.

  • James AKA…

    The thing about this cap is how do you deal with fairness in general if you have this clawback. Currently the league has a disparty of roughly 100-1 between the top and bottom of the salary scale (Kobe at the top, and an undrafted rookie at the bottom). Since contracts at the top end can command up to half of this flex cap (kobe makes about 30 per), it is these contracts which can be said to be breaking the cap on each team, so how do you divey up the penalty? do you say the leage is on average 10 percent over, so everyone loses 10 percent, like a Steve Forbes wet dream (look it up), or do you progressively tax it so that people working for the minimum up to a cerain level pay x level, followed by percentages increasing to the top of the scale (so your average 12th guy pays nothing, and kobe gives back his helecopter)? Also what of the owners? Do the toronto raptors near the flex level screw every player in the league by offering kwame brown a max contract just to lower everyone elses wage? Also since this is an NHL idea (home of the business minds that brought you ice hockey in phoenix), can it be said that David stern is ready for nursing home care?

  • http://twitter.com/BeezKneezy LA Huey

    So if OKC stays under budget but if a minority of the teams spend too much, Kevin Durant could lose money?

  • rav

    also, if they go over the total budget will the 2nd round picks on the minimum have to cough up?

  • http://slamonline.com Allenp

    this whole deal reminds me of the age limit thing. the owners refuse to police each other, so instead they shift the burden to players.

  • http://slamonline.com nbk

    KBerg_CBS Ken Berger
    Fisher said players he’s spoken with, including Kobe Bryant, are “in total disbelief” over owners’ demands.

  • JL

    I think it would be a pro rata share but to have players pay for owner’s missteps and contractual obligations is messed up. Doesn’t make sense at all. owners need to be responsible if they are going to sign players to stupid contracts… by not doing it! The players still lose but at least it will be fair.

  • http://www.triplejunearthed.com/dacre Dacre

    How about we do this one thing. Leave everything exactly as it is. Stop signing bloated contracts to players like Hedo Turkoglu, Gilbert Arenas, Jerome James, Eddy Curry & Peja Stoiakovic because when they don’t perform and guys are actually ‘star’s of the league and help with branding come to re-up then all of a sudden the GMs and team owners have a HUGE problem….
    David Stern instead of fighting with the players, sort it out with team owners first – they are the problem makers.

  • http://thetroyblog.com Teddy-the-Bear

    Why not let the players coach themselves? Why even have a management staff? Why not let the players decide who they want to play with, get into groups of 12 by themselves, and request money from the owners? I mean, since the front office doesn’t want to accept any responsibility for throwing money away, just eliminate the middlemen. Players coach, train, and sign each other. Then the “flex cap” MIGHT be fair…

  • Ronald

    I think the article kind of simplified things. I’m pretty sure it’s not, players make up the difference in salary cap by paying out of pocket.

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