Teams have to spend within 90 percent of the salary cap, so Blake Griffin may be playing with another super star or two pretty soon. Photo by Jason Lewis
Owners flat out won as the players had to give up a lot to make a deal.
By Jason Lewis
Sentinel Sports Editor
There are winners and losers in the NBA. The owners are the winners. The players are the losers. Unlike the NFL, where both sides seemed to give and take, in the NBA it was all give for the players and all take for the owners. Under the old agreement the players received 57 percent of basketball revenues. Under the new agreement they will receiver up to 51 percent.
After all the back and forth arguing, it may be the fans that really won, because the NBA took a step towards the parity that makes the NFL so great.
Small market owners took a stand not only against the players, but also against the big money spenders in larger markets. Teams will still be able to pay their own players a higher amount than any other team without going over the salary cap, but any team that chooses to go over the cap, they will be taxed big time.
Under the old collective bargaining agreement (CBA), teams that spent more than the soft salary cap had to play a dollar for dollar tax. Go over the cap by $10 million, then pay a $10 million tax, which was split among the other teams.
The new tax rules do not go in affect for another two seasons, giving owners a chance to adjust.
For the 2013-14 season, the luxury-tax penalty moves from dollar for dollar to a $1.50-to-$1 ratio for the first $5 million a team is over the threshold, a $1.75-to-$1 ratio if a team is $5 million to $10 million above the threshold, a $2.50 ratio for $10 million to $15 million, and a $3.25 ratio for $15 million to $25 million beyond the threshold.
Last season the Los Angeles Lakers payroll was $91 million, which included a $21 million tax for going over the cap. Under the rules that go into affect in two years, that same payroll would cost the Lakers $68 million in taxes.
The Lakers have had no issue going over the salary cap, but that may change. Besides a stiffer tax, teams that go over the salary cap four times in five years will receive a “repeater tax,” which will be an additional dollar for dollar tax.
The Lakers will not have as much to offer free agents, which will make it tougher to attract big names to fill out their roster.
The Lakers will have some major cap issues heading into the 2013-2014 season. They have $61.5 million tied up in Kobe Bryant ($30.5 million), Pau Gasol ($19.3 million), Metta World Peace ($7.7 million) and Steve Blake ($4.4 million).
There is a new one-time amnesty provision, which allows teams to waive one player. That player’s salary will not count against their cap. Lakers fans would love for them to use it on Luke Walton, but it would help the team more financially to use it on World Peace. World Peace’s contract runs through the 2013-14 season, when the tougher tax penalties kicks in. Walton’s contract expires after next season. If the Lakers want to save a ton of money in two years, then they will have to waive World Peace.
The new rules are bad for the Lakers, but for the rest of the league, especially smaller markets, it is a great thing because the talent around the league will be more spread out. Before this new CBA, the large markets had a great advantage over the smaller markets in terms of attracting free agents. Many small market teams do not have much of a chance to compete unless they get lucky in the NBA Draft, like the San Antonio Spurs did with Tim Duncan, and the Oklahoma City Thunder with Kevin Durant.
As for the Clippers, this new agreement will be great for fans because it forces every team to spend at least 90 percent of the salary cap. Many fans have been upset for years, saying that the Clippers would not spend enough money to build a winner. But now they are forced to spend the money, and they have a lot of it.
There has been a report that the Clippers are so far under the cap that they might have the ability to pay for two max players in the near future, and seeing that they have to spend the money now, Orlando Magic center Dwight Howard and New Orleans Hornets point guard Chris Paul are not out of the question.
This new CBA is not nearly as great for the players as the old one was, but they will still make a boatload of money, while the owners will have a much greater chance of pulling a profit, and the league as a whole will be more competitive.
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