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Tony_Starks
03-11-2015, 10:08 PM
Brian Windhorst*[ARCHIVE]ESPN.com | March 11, 2015



After a meeting this week failed to produce a compromise, the NBA is now preparing itself for the largest salary-cap jump in league history for the 2016-17 season.

It's a move that could have significant implications for potential 2016 free agents such as*Kevin Durant*andLeBron James*as well as teams that have positioned themselves to have cap space, most notably the*Los Angeles Lakers*and*New York Knicks.

The NBA announced Wednesday that the players' union formally rejected a so-called "cap-smoothing" proposal that would pay players the same 51 percent of basketball-related income they get under the current collective-bargaining agreement, while artificially lowering the cap over several years. The plan was put forth to manage the influx of revenue that is coming with the $24 billion television deal that begins after next season.

NBA teams using internal data are projecting the salary cap to jump to between $88 million and $92 million per team, sources told ESPN. To compare, this season the cap is set at $63 million and next season it is projected to land at about $66 million. To put it into perspective, the largest salary-cap jump in history is $7 million in one season. What happens in 2016 could triple that leap.

Owners have been trying to avoid such a spike because it would dramatically raise salary levels for free agents that season. James, for example, could take his salary from about $22 million next season to around $30 million if he signs for the maximum salary in 2016.

Key Points to Historic Cap

•*In an effort to manage the surge in income in 2016 coming from the league's new $24 billion TV deal, the NBA tried to sell the union on a "cap-smoothing" plan that would pay players the same 51 percent of basketball-related income as ever, but while artificially lowering the cap over several years. The union rejected that plan.

•*The 2015 cap is set at $63 million and was projected to hit $66 million in 2016. New revenue is estimated to hike the 2016 cap to between $88 million and $92 million.

•*The largest salary-cap jump in NBA history, until now, was $7 million in one season. Increases in the 2016 cap will triple that increase.

•*There might be free agents this summer who accept only one-year contracts so they can retest the market in 2016, when there is more money available.

•*The likelihood of a lockout in 2017, when both sides can opt out of the currrent CBA, increases significantly.

National Basketball Players Association executive director Michele Roberts previously announced the players had unanimously rejected the NBA's offer, which would have artificially lowered the salary cap to prevent that big spike and phase in the increase over several years.

The NBA suggested that the difference be given to the union in a lump sum and divided evenly among all players. So instead of a few free agents in 2016 benefiting, all players would get a smaller piece of the TV rights deal increase. But Roberts believed long-term it would not be a benefit to the players.

"The proposal that the league submitted ... would artificially deflate the salary cap," Roberts said over All-Star Weekend. "And that, of course, meant that players' salaries would not increase as much as they would otherwise were it not for smoothing. That pretty much was what killed it. It killed it in the eyes of the economists that made the recommendations, and it killed it in the eyes of the players."

NBA commissioner Adam Silver and Roberts met Tuesday to talk about a compromise, their first formal negotiating session since Roberts was hired last summer, sources told ESPN.

The league, however, had little incentive to make a deal. The collective bargaining agreement that was signed in 2011 cut the players' portion of the revenue pie from 57 percent to 51 percent. The deal has functioned extremely well for the owners, who have seen operating margins and franchise values increase significantly. Now the players are prepare for the deal to function in their favor. Silver essentially admitted over All-Star Weekend this likely would be the outcome.

"I don't want to act like it's a terrible problem to have, where we're thrilled that based on the interest in the NBA we're able to command these big increases in the television market," Silver said. "And we will live with our deal."

Broadly, this development likely means two things for the short term of league business:

• There may be some free agents this summer who only accept one-year contracts so they can retest the market in 2016, when it will be awash with available cash.

• The likelihood of a lockout in 2017 when both sides can opt out of the current CBA just increased significantly, if not unexpectedly.

James, speaking before the*Cleveland Cavaliers' practice in San Antonio on Wednesday, saluted Roberts' efforts so far and said the next key point will come at the NBPA meeting in Las Vegas this summer.

"We have a meeting, a huge meeting, in the summertime, obviously to go over everything that we want to execute," James, the vice president of the players' union, said. "Obviously right now is really not the time, and I think Michele is doing a really great job right now of giving her opinions in what she believes going forward as far as for us as the players. But my role right now, I don't want to pretty much talk about it right now."

Information from ESPN.com's Dave McMenamin was used in this report.

Goose17
03-12-2015, 03:59 AM
Great. Another lockout.

Pierzynski4Prez
03-12-2015, 07:55 AM
If I'm a FA this summer, the only contract I'd sign is a 1 year deal with a player option.

MILLERHIGHLIFE
03-12-2015, 08:14 AM
If I'm a FA this summer, the only contract I'd sign is a 1 year deal with a player option.

Wouldn't be shocked if RFA's take the 1 year QO to get more money later in 2016. But could be risky if they get injured.

valade16
03-12-2015, 08:17 AM
I imagine this was why Portland was comfortable trading for Afflalo even though he's a FA. They can afford to bring back LMA, Wes, Lopez and Afflalo and they'll only be in the luxury tax for one season before the new cap hits and their back under the cap.

nickdymez
03-12-2015, 09:46 AM
Another lockout ladies and gentleman

Tony_Starks
03-12-2015, 09:51 AM
This is why the deals the Klay Thompson's of the world signed were actually bargains. Its also reason why Deandre Jordan, Jimmy Buckets, even Rondo and Monroe will get either max or very near it this summer....

Tony_Starks
03-12-2015, 09:55 AM
Great. Another lockout.

I don't see another lockout. The only leg the owners had to stand on last time was the farce that "everybody is losing money." No way they can sell that dream this time around. Especially when you see the money these teams are selling for?

Plus with the league at all time popularity globally and financially it'd be really bad biz to have another stoppage.....

mike_noodles
03-12-2015, 10:02 AM
It sounds to me like there's a giant miscommunication about what the smoothing actually is. I think they're foolish for not doing the smoothing. But the PA always does what's best for the top players in the league and throw everyone else under the bus.

jimm120
03-12-2015, 10:19 AM
Owners will try and peddle non-guaranteed contracts by giving the players no salary cap (meaning hey can sign for whatever).

But the players are out for blood. They got hoodwinked before and everyone knows it.

nycericanguy
03-12-2015, 10:30 AM
Durant is the big winner here, not only is he going to get a HUGE max in 2016, he will be able to pick any team he wants since almost the entire league will be able to have MAX cap.

nycericanguy
03-12-2015, 10:36 AM
Wouldn't be shocked if RFA's take the 1 year QO to get more money later in 2016. But could be risky if they get injured.

I doubt it... take a guy like MIddleton from your team for instance. This summer he can probably get 10-14m on the market. So lets say he gets 4/52m this summer. If he takes the QO he goes from making 12m next year to 1m. So right off the bat he's losing $11m.

Now in 2016, the cap goes up, but how much more would a guy like Middleton realistically get? Let's say some team is willing to pay him 16m per year, which is crazy... but lets just use that figure. So he gets 4/64m in 2016. But he's not really making more because he left $11m on the table in 2015 to wait a year. He's essentially making 65m over 5 years if you count the 1m he had to take for his QO. Vs 4/52m if he just signs this summer.

This is not even factoring in the injury risks or the risk of having a bad year and having his value go down. The only way it would really be worth it if he expected to command over $20m per year in 2016... and that's just very unlikely.

KnicksorBust
03-12-2015, 11:04 AM
I doubt it... take a guy like MIddleton from your team for instance. This summer he can probably get 10-14m on the market. So lets say he gets 4/52m this summer. If he takes the QO he goes from making 12m next year to 1m. So right off the bat he's losing $11m.

Now in 2016, the cap goes up, but how much more would a guy like Middleton realistically get? Let's say some team is willing to pay him 16m per year, which is crazy... but lets just use that figure. So he gets 4/64m in 2016. But he's not really making more because he left $11m on the table in 2015 to wait a year. He's essentially making 65m over 5 years if you count the 1m he had to take for his QO. Vs 4/52m if he just signs this summer.

This is not even factoring in the injury risks or the risk of having a bad year and having his value go down. The only way it would really be worth it if he expected to command over $20m per year in 2016... and that's just very unlikely.

I agree with NYC. As a Knicks fan I think this is great news. We have significant cap space the year before all contracts are going to explode.

KnicksorBust
03-12-2015, 11:05 AM
This is why the deals the Klay Thompson's of the world signed were actually bargains. Its also reason why Deandre Jordan, Jimmy Buckets, even Rondo and Monroe will get either max or very near it this summer....

Rondo getting a max just seems so crazy the way he's been playing this year...