|
|
ALLEYOOP.COM
The Basketball Page for Thinking Fans
|
|
FROM THE BASELINE
December 7, 2001
| |
Deflation
The NBA's salary cap system is working great right now, just like it has for the last two decades. Revenues are going up every year, which increases the salary cap every year, which means the players get more money every year, and everybody ends up happy.
But there's also a skeleton hiding in the closet, and when it comes out it's going to give the system the biggest test it's had yet. I bring it up because that skeleton is about to leave the closet real, real soon.
And the skeleton is this: What happens when revenues go down?
For those who haven't noticed, we're in a recession. Attendance is down sharply in several arenas - the Nets, for instance, are in first place and drawing 14 fans a game. (By drawing, I don't mean "attracting" either - I mean they literally have to draw figures of the people with crayons to make it look like people are at the game).
That's one aspect of revenues that are headed lower. Merchandise sales are another. But the big whammy is about to hit in the next week or two. The bidding has started for the NBA's next TV contract, and all indications are that the money will be far less than it's been up until now.
The TV money has been the key to the salary cap pie that players and owners have each gotten a cut from. With less money in the kitty, that means a lower salary cap and a lower luxury tax is on the horizon for teams across the league.
Think about that for a second: A lower salary cap. Now let's think through some of the implications.
The first and most obvious consideration is that bad contracts will become ever more onerous. In the past, you could at least count on a rising cap to mute some of the impact of a disastrous contract. If you grossly overpaid for a guy like Jon Koncak, salary inflation would gradually make his contract less obscene, and rising revenues would open salary cap space for your team in the future.
Now just the opposite will happen. The deals that guys like Antawn Jamison and Michael Dickerson got just before this season are going to get more burdensome for their clubs every season, as they take up a larger and larger percentage of their salary cap space.
What's more, nearly all of these deals have 15% raises included in them for each season. So a team that has most of their key players under long-term contracts (like, say, the Bucks or Sixers), now faces the fact that their salaries are rising 15% a year while their salary cap room is decreasing.
And the luxury tax walls will slowly close in as well, just like they did on Han and Luke in that trash compactor during Star Wars (how's that for a bad metaphor? I've got more ...). A sinking luxury tax means that teams who basically had to give guys away to get just under the tax this year will probably end up doing the same thing the next couple of years.
And there are a a lot of teams in this category. If the luxury tax drops just a little next year - to say, $50 million - then without signing a single additional player, the Kings, Lakers, Hawks, Celtics, Mavs, Grizzlies, Bucks, Nets, Knicks, Sixers, Raptors, Blazers, Mavs and Knicks will all be over the threshold. That's half the league.
And if it decreases again in 2003-04, a lot of those same teams will be in a bind once again. Luxury-averse contenders like Milwaukee, Philly and Sacramento already have more than $50 million committed for that season, and the Kings still have to shell out for Mike Bibby.
Perhaps most daunting is that I haven't even touched on the biggest issue of all. The players are already unhappy that David Stern shystered them in the last negotiations by getting them to accept the luxury tax. If decreasing revenues, and thus decreasing salary caps, are also part of the landscape, it could get ugly.
Overall, it seems to me that decreasing revenues as a result of the current recession are a serious issue looming for the league. What will definitely happen is that several teams are going to have give away quality players in order to avoid getting nailed by the luxury tax. What I can only pray won't happen is that another labor stoppage will be an eventual consequence.
Pot Shots
How about Pau Gasol's dunk on Garnett last night? All the talk for Rookie of the Year has been about Tinsley and Parker, but Pau actually has a higher PER than both of them, and hopefully that highlight reel will wake up some voters ... Watched the Raptors and Bucks play pick-up last night, and one interesting wrinkle from Milwaukee was that they sat Rafer and let Ray Allen run the point when Cassell went out. Allen was too much for Chris Childs, who's a pretty good defender, and he'll absolutely abuse some of the other points in the league if they keep doing this.
Lorenzen Wright's injury may be a blessing in disguise for the Griz, who now have no choice but to give Stromile Swift his 30 minutes a night, unless they're just really, really stupid ... Finally, player ratings for the 1999-2000 season are now up. I'm working on 1999 and should have that up soon as well.
|
|
|
| |
|
|