The salary floor is one driving motivation on why I would want Nene/Dalembert in the Free Agent market

I spent a lot of words talking about why I wanted Nene and Dalembert a couple days ago. I didn’t say why I didn’t see the Kings being in a worse position by spending the money. The salary floor has raised 10% from the previous CBA (it was 75% and has been raised to 85% for the next 2 years and 90% for the rest of the CBA). So what this has done is created a need to fill that space with a temporary measure so you can use cap room when the time is right.

Here’s the problem with that scenario: Any time you use a lot of cap room and commit a lot of dollars to a player is a risk. There is no guarantee that the risk today is worse or even more problematic than the risk you can take down the road.

There are lots of teams out there other than the Kings that are below or right at the salary floor. I listed a few in a post awhile ago that counted 18 out of 30 teams in the league at the cap level (which I didn’t know at the time would be the same as a year ago minus the pro-rated shares) or below the cap level for last season.

18 out of 30 is not an advantage. Of all those teams, many have prepared for the floor. In that linked post, I noted that it’s not an advantage to be below the floor unless you’re going to be aggressive in signing players. (Listening to Paul Westphal on Grant Napear’s show yesterday, it certainly sounds like that is the plan. Listening to Geoff Petrie, and a much appreciative thanks to Kings.com (and to Jon Santiago for passing that footage along), you can tell that he wants to get the process started and completed as quickly as possible. (I thought the most interesting thing when Petrie talked about the lockout being over was not mentioning ownership. I wonder if that means he’s old enough that he doesn’t have to kiss a billionaires ass. I’m hoping that’s it. Then again, maybe he just didn’t want to mention it.)

The Kings have about 31.75 million in salaries for this season. That means without Marcus Thornton, they have to spend somewhere in the range of 18 million just to get to the minimum salary. 18 MILLION DOLLARS.

Even if you have a Nick Collison situation with Marcus Thornton (Collison got a huge bonus from Oklahoma City last year that got him his money up front and OKC got to spread the cap hit across the course of the contract), that still likely leaves somewhere between 4 and 5 million to acquire another player.

 

Do the Kings really want to blow all their cap space on Marcus Thornton and a massive up front signing bonus just to get to the mimimum floor for this season? I get the flexibility point, and the Thunder have done exactly that. The Oklahoma City Thunder also have 2 young players under contract in Kevin Durant and Russell Westbrook who are in line for extensions. Unless they want to pay luxury tax (which they don’t), managing their cap so that they can absorb hefty increases (Durant is getting his big contract starting this season) for all the young players over the next few seasons will be really critical. Westbrook gets a big contract for the 2012-13 season while James Harden and Serge Ibaka are in for higher salaries in the 2013-14 season. Managing your cap is so critical. Yet, and I point this out, the Thunder don’t need to spend money to get to the floor because they are already there. With Collison and Kendrick Perkins taking big cap hits, the Thunder did the wise thing and spread their cap hits over time. When Harden and Ibaka get their money in the 13-14 season, Perkins will only have 2 years left. Collison is locked up until 2014-15, but at less than 3 million per season during that time.

Oklahoma City Thunder anticipated the budget crunch and planned their roster to use their cap space accordingly and within the plan. The Kings are not in OKC’s position though. Please remember that.

For instance, the Phoenix Suns might be willing to part with Josh Childress for literally nothing. If you are a team that wants to get above the floor, a long term contract (in Childress’ case the next 4 years) might be the only contract you can acquire to get yourself over that floor.

I want to make several things clear. One, teams won’t be willing to get rid of contracts unless they are teams that are looking to shed salary (like the Magic for instance). Chris Duhon, I suspect, could be had for nothing more than, well, nothing.

Another player that a team might be willing to give up would be Matt Carroll of the Charlotte Bobcats. I understand these are not desirable players, and that’s my point. That’s why they are available. Charlotte doesn’t need to get rid of Carroll, but if you want his salary for your purposes, sure why not? The Bobcats aren’t giving away Tyrus Thomas for nothing though.

I can keep naming examples but we will all get pretty bored with that. I’ve clearly illustrated my point. But understand, this is why I keep pushing the Nene/Dalembert idea so hard. The idea of overpaying Thornton and getting an unsavory contract from a taxpaying team is not my idea of the best use of cap space. But there is no point in overpaying a player from somewhere else either. It’s a catch 22 of the shittiest order as far as I can tell.

Here is the problem I have with the revenue sharing AND the problem I have with the floor. If you’re bad in the NBA, you lose money. Yet, at the same time, the rich NBA teams don’t want to lose money to subsidize another NBA team. Jerry Buss, the Lakers owner, has a legitimate point if he’s saying why should I give you a piece of my well earned negotiation? Mel Simon, the Pacers owner, wants a hand out and saying that I own a team in Indiana that is a money loser. I can’t go on unless I get help in terms of revenue sharing.  

JA Adande wrote on TrueHoop yesterday about the revenue sharing plan and the headaches it’s causing. (Shocking isn’t it? Owners don’t get along. Shocking….)

The general understanding is that it will triple the money available in the revenue-sharing pool, bringing it to about $150 million. But there is still disagreement about what will be asked of the payers and who will qualify to be receivers.

You can start with the definition of market size. The New York Knicks play in the nation’s most populated city, but they also compete for sports discretionary dollars with, say, the Yankees, Giants, Jets, Mets, Rangers and soon the Nets. The Jazz and Trail Blazers are in smaller cities but also have the distinction of being the only major pro sports teams in their states. The new formula is expected to focus more on what a team can do relative to the number of people and television households in its region.

Small-market teams are worried about getting dragged into higher payrolls by the large markets. When the Lakers or Celtics sign mammoth local television contracts it drives up the basketball related income for the entire league, which increases the salary cap. And with the new agreement calling for all teams to spend at least 85 percent of the cap in the first two years and 90 percent afterward, the small markets fear their payroll will rise at a faster rate than their income.

The last paragraph is really the most important part of the piece, but the whole thing is excellent. As always, I suggest perusing it. (As if linking to it originally as part of this whole thing didn’t tilt towards that anyway.)

Adande nails this in a way that illustrates why I’m absolutely irritated with people who don’t understand the CBA very well. You can lower player salaries all you want, but small market teams will always cry poor. These teams want part of the big market revenues. The big markets want it to themselves because they see it as good business acumen on their part. The thing is that you have to be good in a big market to tap revenues, but when the Knicks spend more than anyone and lose a lot of games it’s pretty clear that it’s hard to lose money in the biggest markets unless you’re stupid. The problem as I see it that if the salary cap keeps going up, and it very well may, that means the floor keeps going up. That means small market teams will keep crying poor. That means the player movement in the next CBA will get blamed on the players despite the landmark victories the NBA made.

There are easy ways to revenue share in my opinion, but this would be the easiest. Increase the pool to whatever amount. Let’s say 150 million since that is the figure cited in Adande’s piece. The big markets could easily give up their national TV share (not willingly but again this is never going to happen willingly) to the revenue sharing pool. These large market teams could also give their share of escrow and luxury tax (the new system allows for everyone to get a piece) to this pool.

Now the qualifiers for the revenue sharing pool would be:

  1. Lost money under the last CBA more than 3 years
  2. In a market that qualifies for the bottom 1/3 of the NBA
  3. In a market that is supporting the franchise but the franchise can’t keep up
  4. In a market that is rebuilding and suffering as a result

I could make this more fine tuned, but this is a rough outline. I personally think revenue sharing should go to teams when they are struggling to get attendance. I also think that revenue sharing shouldn’t be automatic because there are problems with that in MLB (the Pittsburgh Pirates and Kansas City Royals are chronic receivers of the revenue sharing plan in MLB). What needs to happen is a system that can A) allow teams to rebuild without feeling massive financial pain to do so and B) doesn’t penalize a team for being successful.

The large markets need the NBA as a league to survive. Large markets will have to subsidize smaller markets if they continue to grab all the profits and don’t share any of it. If the NBA loses teams because large markets insist on not sharing revenue, than that is on the large markets. If teams start contracting from the NBA, that won’t help the NBA as a league. But I think the small market owners are being difficult with the large market owners in the same way the NBA was with the players during CBA negotiations; the small market owners want it all. If it was Stern’s job to broker a deal between the players and owners, than it’s also his job to broker a reasonable compromise for revenue sharing.

I sense a compromise coming, and if you judge Adande’s piece for what it is, I think that’s not a bad thing. Revenue sharing should help teams that need it; no more or less. If the Kings are making profit in Sacramento, the Lakers don’t need to share in it. But the Kings don’t necessarily need to share revenue from the Lakers either.

Revenue sharing should be there for teams that need it. It’s not that hard. But, if revenue sharing doesn’t go hand in hand with the salary floor rising (because it will rise and this will be a problem), than it really doesn’t matter how much revenue sharing happens does it?

This new “owner favorable” CBA will be just as “bad” for the owners as the last one the next time negotiations are. Why? This stupid salary floor (which I don’t blame the players for negotiating–that’s just part of collective bargaining) will hurt the NBA without the accompanying revenue sharing. Let’s hope the “improved revenue sharing system” ends up being executed effectively enough and avoids a prolonged silly excuse for a work stoppage called a lockout that will be a “rinse-wash-repeat” all over again in 2017. But if you are a fan who says the players are “getting” profit by playing, that’s not entirely true. Owners primary jobs are not from owning a basketball team. The players primary jobs are. The players are the people that fans pay to see. The players do most of the PR for the NBA. Not the owners. The players are the one’s that generate interest, the one’s that are on billboards, the one’s that are part of marketing schematics. That’s the difference. So when I hear someone say,”The players are guaranteed profit”, all I really think is they are full of shit and envious. It’s not like the owners are homeless bums owning NBA teams. (Well, maybe not homeless. Bums certainly.)

If you can’t figure out why spending money on certain players for real improvement is important, you’ve actually missed my entire point of this piece. In a league where the talent you have, starting with star power, is so critical, spending money isn’t the only criterion. Sometimes taking risks are the only way that you can fully attain the real value of an asset like cap space. It’s up to you to accept that reality, but that’s the way it always will be in the NBA regardless of length of contract.

Right or wrong, the NBA is what it is. It’s a player’s league. If you can’t accept that, and believe the league suddenly needs to change, it won’t be the NBA. What it seems to me that fans who are pushing for dramatic change is that they want tweaks to the system so that the Lakers, Celtics or Heat don’t dominate. That’s the NBA in a nutshell. (Not the Lakers or Celtics winning a lot. A few teams at the top.) By introducing dramatic change, that’s not a tweak. That’s an entirely different product. A product, quite frankly, I’m not sure as many fans really want. And, for the last fucking time (actually I’ll probably say that a few more times), championships are not the end all be all of sports. Last I checked, few people seem interested in talking about the Grizzlies and their exceptionally unique ascent into the semi-finals. I still think that is the singular most important story of the 2010-11 NBA season.

Oh that’s right. It doesn’t screw the Lakers, Celtics or Heat so it’s not important. What is important that revenue sharing allows the Memphis’, the Utah’s, Sacramento’s, Portland’s, and the like to compete so that fans in their cities aren’t always complaining about the finances of the league. Big markets aren’t favored any more than small markets by David Stern. If anything, Stern favors and attempts to tilt the league towards a small market perspective as often as possible. In a players league where superstars are golden, and who end up grabbing championships consistently, these players also benefit from the consistent constant exposure of larger markets. Right or wrong. In the NBA, small markets need a way to compete. One way is to spend money and to spend money wisely. But if these markets are so busy losing money than it’s also bad for the long-term health of the NBA. Contraction, and especially given all the money that has been paid for franchises these days, is a bad idea. Long term sustainability should be the goal. Not limiting player movement. Not getting back at Miami because they used all their advantages to their maximum benefit. Not because a player who has only played in one Conference Finals (and been bounced out of the 1st round every other year) got an extension from a big market team. Not because the Lakers got another “break” from the officiating this time around.

Who am I kidding? This shit will never change. Fans will go on complaining about large markets because it’s a handy no risk no damaging loss target. It’s sorta like venting at the Michelin man because you can see him. It doesn’t make any sense, but, shit, that doesn’t stop folks from doing so anyway. The refereeing will always be rigged even though the NBA is far and away the most difficult league in the world to officiate.

Winning a title in the NBA is like climbing Mt Everest. Only a few in every generation can do it. That doesn’t mean that climbing 25,000 ft isn’t an accomplishment because it very much is. But climbing 25,000 ft isn’t climbing 29,000 ft.

At some point you accept this or don’t. Just don’t complain when someone like myself doesn’t sympathize with your opinion on this score. Especially when things that are reasonable to avoid, like a nasty salary floor and stupid negotiations on revenue sharing, keep happening repeatedly. At some point, some of you praying for systemic wide and deep change need to recognize it’s not the system at fault; it’s simply the person who isn’t as effective as another at his/her job. Since when did it become mandatory that everybody and everything become equal?

Okay now I’m done. I hate the salary floor but I understand it. Like I’ve said, without revenue sharing it will be pointless. I hope you really understand that. And, for the lack of a better way to say it, be careful what you wish for, you just might get it.