In 2016, new national TV contracts pushed the NBA’s salary cap from $70 million to $94.143 million – a larger jump than over the entire previous decade. Free agents cashed in majorly that summer. But now, the cap is leveling off. It went up to just $99.093 million last year and is projected to reach only $101 million this year and $108 million next year. With so many lucrative long-term 2016 contracts still on the books, free agents the following few years haven’t gotten and won’t get comparable compensation. The problem was predictable, and the NBA proposed a solution at the time – cap smoothing. Players get 49%-51% of Basketball Related Income (BRI) each year, the precise amount determined by formula. The salary cap is set so teams’ payrolls collectively reach that range. (There are procedures if teams fall short or pay too much.) With cap smoothing, the NBA would have set an artificially lower cap for 2016-17. Players would have gotten less than 49%-51% of BRI in salary, but presumably, the league would have distributed the difference to players after-the-fact. That way, all players – not just 2016 free agents – would cash in. But the players union rejected the plan. NBA commissioner Adam Silver has looked back longingly, wishing the union approved. National Basketball Players Association executive director Michele Roberts, um, has not. Roberts, in a Q&A with Paul Flannery of SB Nation: When the salary explosion happened and you rejected the smoothing idea that the NBA proposed, has anything that has happened in the last few years caused you to reconsider that stance? No, in fact it’s completely confirmed the correctness of that position. I delight and the players delight in reading about some of these contracts because they know they absolutely deserve it. There was going to be no smoothing of the owners’ profits at all. They were going to enjoy real money that reflected where we were financially as a game. Why in the world would players pretend that the game was not making as much money and therefore have smaller contracts? It was an absurd suggestion, I thought personally. But what we did to make sure it wasn’t just Michele’s instinct was hire two separate economists to tell us whether this was something that was going to be of value to our players in the long run.
Michele Roberts: Cap smoothing was ‘disgraceful request’ by NBA
Pro Basketball Talk | Feb 23