By Jack Ryan
If you’re wondering why the Sixers and the rest of the NBA have so much money to spend (and waste) on overrated talent like former Sixer washout Evan Turner, who got $70 million for four years from the Blazers:
The phenomenon of middle-of-the-road players getting maxed out once they’re free of the rookie wage restrictions has only been worsened by something that NBA commissioner Adam Silver has called “a good problem to have” — the massive increase in the salary cap due to unanticipated tripling of the NBA’s broadcast rights deals.
The cap is calculated on a percentage of revenue, which has exploded by $1 billion in the last three years alone. It’s essentially a 50-50 split among players and owners. This coming season marks the first year of the league’s nine-year, $24 billion TV deal with ABC/ESPN and Turner. Silver, his predecessor David Stern and the former executive director of the players’ association, Billy Hunter, did not anticipate such a massive increase — from an average of $930 million a year in TV revenue to $2.67 billion.
That, coupled with the union’s new director, Michelle Roberts, rejecting the league’s proposal to smooth the money into the system gradually, has resulted in a spike in the cap from $70 million last season to $94 million this season and a projected $110 million next season. With the two-year spike distributing money disproportionately among the players based on the arbitrary timing of free agency — and making the search for a match between pay and performance even more elusive — Roberts may rue the day she rejected the league’s smoothing proposal.
With poor planning and no smoothing, the marketplace was suddenly flooded with $1 billion in cap room this summer, with 21 of the 30 teams having room to offer a max contract. Add a provision negotiated by Hunter requiring teams to spend at least 90 percent of the cap — creating a payroll floor of $85 million — and you have an unprecedented spending spree.
Until now, Silver (above) has taken a wait-and-see approach before predicting doom and gloom for such a flood of money into the system.
“Let’s see what actually happens this summer and let’s see just how disruptive it is,” he said.
Well, now we’re beginning to see.
The problem is two-fold: a system that was created to award the vast middle ground of players at the expense of those who truly deserve the most money, and a failure by both sides to anticipate the extent of the TV spike. With no mechanism in the CBA to address it, the dollars are flowing disproportionately to players who happen to be free agents this summer and next. For example, for Tristan Thompson to get the security of a five-year deal, he had to re-sign with the Cavs last summer based on old cap parameters: five years, $82 million. Hitting free agency a year before the cap spike probably cost Thompson about $40 million.
“It’s something, without getting into specifics, that we will be discussing internally and of course discussing with the players’ association,” Silver said. “And the only changes we can ultimately make are by agreement with the players.”
In the current CBA, the league did shorten contracts and install such remedies as the stretch provision, both of which give teams more flexibility to correct free-agent mistakes. But the negotiating dance between owners and players always has unintended consequences. This time around the ripple effects of the spike could divide locker rooms — where disproportionate salaries could bruise egos — and imperil Silver’s efforts to create a competitively balanced system.
The Golden State Warriors, who won 73 games last season and already have three All-Stars and the two-time reigning MVP, actually have a legitimate shot at signing the top free agent on the market, Kevin Durant. Such an outcome could represent the symbolic death knell for small- and mid-sized markets in their efforts to persuade fans they can actually compete with the glamour markets “if well managed,” as Silver so frequently put it during the 2011 lockout.
Interestingly, during his All-Star address in February, Silver significantly walked back his rhetoric on how competitively balanced the NBA can be.
“We’re never going to have NFL-style parity in this league,” he said.
