NBA labor peace might not be "a layup"
NBA labor peace might not be "a layup"
The two most daunting words in the realm of NBA collective bargaining negotiations -- hard cap -- are coming up with greater frequency than I’ve ever heard in my three decades covering #thisleague
It was somewhat comical, upon reflection, to hear all the offseason handwringing about Kevin Durant's demand to be traded by the Brooklyn Nets potentially leading to a lockout.
While true that Durant seemed to be flexing to a new extreme for the Player Empowerment Era, issuing a trade-me edict before he had even begun a new four-year contract extension with the Nets worth nearly $200 million, there was always too much money sloshing around in today's NBA for even a handful of players demanding trades to trigger a work stoppage.
Too much money for players leaguewide and especially for NBA owners.
A lucrative new television deal, expected to be worth at least double the NBA's current nine-year, $24 billion (with a B) TV pact, should be in place starting with the 2025-26 season. The prospect of expansion later in the decade, after that new television contract is secured, promises to pump billions more into ownership coffers.
Forbes, furthermore, has just issued a fresh round of franchise valuations that listed three clubs at $5.9 billion or higher, starting with the $7 billion Golden State Warriors, who have pushed past New York and the Los Angeles Lakers. The average value of the NBA's 30 franchises has risen 15 percent since last year, in an unfriendly economy, to a heady $2.86 billion.
Put it all together and the safe conclusion continues to be that a new labor agreement is inevitable. Business has simply been too good, on the rebound from a global pandemic, to dare interrupt it. Especially when the respective leaderships of the NBA and the National Basketball Players Association are thought to get along as well as they ever have.
However ...
The two most daunting words in the realm of NBA labor relations are suddenly coming up with greater frequency than I’ve ever heard in my three decades covering #thisleague:
Hard cap.
League sources say that there is an increasing push from the various factions on the league/ownership side to push for a system closer to a true hard cap … with a twist. The current proposals, sources say, don’t actually call it a hard cap, since those words carry such a negative stigma.
“Upper Spending Limit,” I’m told, is the nomenclature in play.
The USL.
Sounds like a soccer league, but ditching the luxury tax to implement a hard payroll limit is actually the sort of issue that — depending on the league’s resolve to bargain for it — would almost certainly lead to a work stoppage.
"There will be a lockout," one source from the players’ side told me, "before there’s a hard cap."
In the NBA's current labor deal with the NBPA, there are only three scenarios in which a team becomes hard-capped: 1. Acquiring a free agent via sign-and-trade; 2. Signing a free agent with the non-taxpayer mid-level exception; 3. Signing a free agent with the bi-annual exception.
Specifics are scarce at this early juncture, but sources maintain that there is a strong desire from some corners of the league map to implement a much more onerous system to limit overall team spending while the values of individual contracts and the league’s average salary are expected to keep rising with an influx of TV money looming.
Sources likewise say that an appetite for the USL not unanimous among the league’s 30 clubs. Word is that there are some resistant teams out there fearful that an actual payroll line that absolutely can’t be crossed, as opposed to the template in operation now that relies on the luxury tax and repeater tax to do the job of a hard cap, could make it even harder to retain their best players.
This much is clear: What’s happening in Golden State is at the crux of the USL discourse. One league source pointed to all the recent hoopla about a potential Warriors salary-plus-luxury tax bill that approaches (or maybe even exceeds) the $500 million mark and said that "payroll disparity" concerns, as they are increasing referred to around the league, have undeniably pumped some doubt into labor talks that were once regarded as "a layup."
Both sides are down to the final six weeks until the deadline of Dec. 15 to opt out of the current CBA, which would terminate the agreement on June 30, 2023 — one year earlier than it is scheduled to expire.
Can NBA commissioner Adam Silver really afford labor discord of any type at a time of such apparent prosperity?
Is an all-new union leadership tandem of NBPA executive director Tamika Tremaglio and president CJ McCollum of the New Orleans indeed prepared for the difficult fight ahead if the Upper Spending Limit campaign gathers steam?
The answers are forthcoming. Soon.
I don't understand why a hard cap would affect the players. Don't they get a certain percentage of Basketball Related Income regardless? Everything else is just how the money is distributed among the players, rather than players vs owners - or am I missing something?
Owners know a hard cap is a nonstarter, but they gotta set the initial negotiations super high so that the "middle" they reach with the players is more favorable to them.