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Thread: NBA Hard Cap?

  1. #106
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    Quote Originally Posted by crewfan13 View Post
    I donít think anyone is suggesting the cap be flipped to a hard cap at all. I think all the hard cap folks accepted that the cap would likely have to be closer to the tax line, since thatís the real amount of money being paid currently into the league, especially with certain teams spending significantly over the tax.

    My entire dispute isnít at the cap number, itís guaranteed vs non guaranteed deals, which would still be a discussion.
    And again, that means the owners are giving up a billion more dollars to player salary. That money is spent whether contracts are guaranteed or not. It's not an issue of the specific cap number, it's the percentage of BRI the players get that would have to increase.

    Which of the two decision making parties, the players' union and the owners, do you think would be a proponent of this plan? The owners lose a billion dollars from their moneymaking machine, and the players lose their injury insurance. Who benefits from a hard cap that actually makes decisions?

  2. #107
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    For starters, they should agree that salaries listed should be NET and not gross. Having any sort of cap with taxation differences due to state taxes or lack of makes the whole thing stupid in the first place.

    Then you can have an 80m hard cap and someone getting 20m net would probably be better off than a max today.

  3. #108
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    Quote Originally Posted by NYKalltheway View Post
    For starters, they should agree that salaries listed should be NET and not gross. Having any sort of cap with taxation differences due to state taxes or lack of makes the whole thing stupid in the first place.

    Then you can have an 80m hard cap and someone getting 20m net would probably be better off than a max today.
    The tax difference is overstated, because states still get tax money, they just get it differently. My property tax is 3x higher here in Texas than in Indiana. Sales tax is 50% higher. State income tax is a pittance by comparison.

  4. #109
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    Quote Originally Posted by IndyRealist View Post
    The tax difference is overstated, because states still get tax money, they just get it differently. My property tax is 3x higher here in Texas than in Indiana. Sales tax is 50% higher. State income tax is a pittance by comparison.
    Cost of living in CA compared to FL is a huge difference when you are talking about a $200M contract.

    CA has the highest base sales tax rate and state income tax is as high as 14%.

  5. #110
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    Quote Originally Posted by Scoots View Post
    Cost of living in CA compared to FL is a huge difference when you are talking about a $200M contract.

    CA has the highest base sales tax rate and state income tax is as high as 14%.
    Yeah Cali is it's own monster. Doesn't mean we should use it as the baseline though.

  6. #111
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    Quote Originally Posted by IndyRealist View Post
    Yeah Cali is it's own monster. Doesn't mean we should use it as the baseline though.
    It's not a baseline ... the point was making it equal for cost of living does make some sense and there are 3 teams in CA. That's 10% of the NBA in CA. 2 more teams in NY and while the income tax there is "only" around 9% the sales tax there is higher than CA.

    If the NBA really wants parity then true 100% revenue sharing should be the goal, and COL adjustments should be as well.

    I don't know how you balance out the fact that some NBA cities are ... less than ... other NBA cities.

    Right now CA and NY have a near 8% bottom line disadvantage compared to Houston/Dallas/San Antonio. That's serious scratch.

  7. #112
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    Sorry, I may have misspoke. I know this is entirely about a hard cap. But reasonably speaking, I donít think anyone expects the current cap number to just become the hard cap. I think most reasonable people understand that a hard cap total would likely have to be closer to the tax line than the current soft cap mark.

    Right now the cap is at roughly $100 mill. I believe the tax is in the $130 mill range with a few teams, like Cleveland and GS last year paying fairly significantly over the tax line. So to get roughly the same amount of spending, a hard cap would need to be set in the $120-$130 mill range.

  8. #113
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    Quote Originally Posted by Scoots View Post
    It's not a baseline ... the point was making it equal for cost of living does make some sense and there are 3 teams in CA. That's 10% of the NBA in CA. 2 more teams in NY and while the income tax there is "only" around 9% the sales tax there is higher than CA.

    If the NBA really wants parity then true 100% revenue sharing should be the goal, and COL adjustments should be as well.

    I don't know how you balance out the fact that some NBA cities are ... less than ... other NBA cities.

    Right now CA and NY have a near 8% bottom line disadvantage compared to Houston/Dallas/San Antonio. That's serious scratch.
    Cost of Living adjustment is not the same as an income tax adjustment. COL was not mentioned until just now. NY and CA teams can eat that cost because they make more money than everybody else. Other teams, not so sure.

  9. #114
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    Quote Originally Posted by IndyRealist View Post
    And again, that means the owners are giving up a billion more dollars to player salary. That money is spent whether contracts are guaranteed or not. It's not an issue of the specific cap number, it's the percentage of BRI the players get that would have to increase.

    Which of the two decision making parties, the players' union and the owners, do you think would be a proponent of this plan? The owners lose a billion dollars from their moneymaking machine, and the players lose their injury insurance. Who benefits from a hard cap that actually makes decisions?
    But they donít. Owners as a whole are already spending that money. The median nba salary spend this past year was $116 million. So if you set the cap at $120, not every team is going to spend right up against the cap, but getneally speaking the same amount of money is likely to be spent. Heck, even if you set it at $115 youíd actually have less money.

    So no, the owners donít lose a billion dollars by any stretch of the imagination. Letís say last yearís floor and cap would have been set at $95 and $120. Only 4 teams would have been forced to spend more money, 2 of which would have had to spend less than $1 mill each. The most a team would have had to spend is $10 mill. And at $120, you would have had 7 teams over, but 2 of those were less than $1 mill over.

    So with those numbers, essentially 23 of the 30 teams would have been with the thresholds and had to spend no additional money. If you include an amnesty again, as well as a 2 year grace period to get down to the cap number, GS is probably the only team who struggles to get down to the cap, since ty donít have any glaringly bad deals.

    So thereís definitely ways to implement a hard cap without drastically changing the financials of the nba. Add a little more profit sharing to appease the smaller market owners and you could be good to go. And the larger markets will likely be happy since they canít be shamed into spending way over the tax and can make decent money on championship runs.

    And the players have guaranteed themselves a bigger safety net. Right now, if teams chose to just limit themselves to the cap, players would be out a ton of money. This way raises the floor of guaranteed mineubthevolayers get as well.

  10. #115
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    Quote Originally Posted by Scoots View Post
    It's not a baseline ... the point was making it equal for cost of living does make some sense and there are 3 teams in CA. That's 10% of the NBA in CA. 2 more teams in NY and while the income tax there is "only" around 9% the sales tax there is higher than CA.

    If the NBA really wants parity then true 100% revenue sharing should be the goal, and COL adjustments should be as well.

    I don't know how you balance out the fact that some NBA cities are ... less than ... other NBA cities.

    Right now CA and NY have a near 8% bottom line disadvantage compared to Houston/Dallas/San Antonio. That's serious scratch.
    Truthfully, I donít think players take that stuff into a ton of consideration. For a lot of guys, contract is more about prestige. Itís I think Iím better than player X so I want to make more than player X. Itís not, congrats player X on signing your deal, but my paychecks are bigger and my home was 30% cheaper for the same square footage.

    Like Indy said, thereís a lot more to cost of living and true value of contracts than just income tax. And if youíre going to start calculating that, you also have to start including endorsement potential and all things like that, which makes it more convoluted.

    And I donít see that as a problem anyways. Are players really spurning the CA and NY markets for Dallas and Denver? Is that even a thought in peopleís minds. Guys were willing to sign in Cleveland because of Lebron. If he leaves, itís not like thatís going to stay an attractive market

  11. #116
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    Quote Originally Posted by IndyRealist View Post
    Cost of Living adjustment is not the same as an income tax adjustment. COL was not mentioned until just now. NY and CA teams can eat that cost because they make more money than everybody else. Other teams, not so sure.
    No, I mentioned it earlier, but I suspect it was in a different thread and I got them mixed up (it may have been in the tanking thread)

    And if there is true revenue sharing NY and LA teams would not be making more money.

  12. #117
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    Quote Originally Posted by crewfan13 View Post
    Truthfully, I donít think players take that stuff into a ton of consideration. For a lot of guys, contract is more about prestige. Itís I think Iím better than player X so I want to make more than player X. Itís not, congrats player X on signing your deal, but my paychecks are bigger and my home was 30% cheaper for the same square footage.

    Like Indy said, thereís a lot more to cost of living and true value of contracts than just income tax. And if youíre going to start calculating that, you also have to start including endorsement potential and all things like that, which makes it more convoluted.

    And I donít see that as a problem anyways. Are players really spurning the CA and NY markets for Dallas and Denver? Is that even a thought in peopleís minds. Guys were willing to sign in Cleveland because of Lebron. If he leaves, itís not like thatís going to stay an attractive market
    Yeah, I don't think it's possible to really make it equal. I think the endorsement money isn't as big an issue anymore than it used to be.

    Players have mentioned state income tax in the past yes. They see that big number on ESPN then they get the first statement from their accountant and wonder where it all went

  13. #118
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    Quote Originally Posted by crewfan13 View Post
    But they donít. Owners as a whole are already spending that money. The median nba salary spend this past year was $116 million. So if you set the cap at $120, not every team is going to spend right up against the cap, but getneally speaking the same amount of money is likely to be spent. Heck, even if you set it at $115 youíd actually have less money.

    So no, the owners donít lose a billion dollars by any stretch of the imagination. Letís say last yearís floor and cap would have been set at $95 and $120. Only 4 teams would have been forced to spend more money, 2 of which would have had to spend less than $1 mill each. The most a team would have had to spend is $10 mill. And at $120, you would have had 7 teams over, but 2 of those were less than $1 mill over.

    So with those numbers, essentially 23 of the 30 teams would have been with the thresholds and had to spend no additional money. If you include an amnesty again, as well as a 2 year grace period to get down to the cap number, GS is probably the only team who struggles to get down to the cap, since ty donít have any glaringly bad deals.

    So thereís definitely ways to implement a hard cap without drastically changing the financials of the nba. Add a little more profit sharing to appease the smaller market owners and you could be good to go. And the larger markets will likely be happy since they canít be shamed into spending way over the tax and can make decent money on championship runs.

    And the players have guaranteed themselves a bigger safety net. Right now, if teams chose to just limit themselves to the cap, players would be out a ton of money. This way raises the floor of guaranteed mineubthevolayers get as well.
    You don't understand how the system works. The team salary numbers are irrelevant for this discussion. The CBA guarantees that 48-52% of BRI is spent on player salary. Even if EVERY team were at the salary floor, the money still goes to the players. What I am saying is that for players to give up guaranteed contracts, you'd have to bump that up to over 60%, or around a billion dollars more.
    Last edited by IndyRealist; 06-13-2018 at 08:48 AM.

  14. #119
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    Quote Originally Posted by IndyRealist View Post
    You don't understand how the system works. The team salary numbers are irrelevant for this discussion. The CBA guarantees that 48-52% of BRI is spent on player salary. Even if EVERY team were at the salary floor, the money still goes to the players. What I am saying is that for players to give up guaranteed contracts, you'd have to bump that up to over 60%, or around a billion dollars more.
    In addition to that I suspect that the cap would likely be above the strict 52% threshold so the wealthier teams pay enough to the players to make up for the teams well below the cap. So the hard cap may be $180M a year with that bump and with the additional money to get rid of guaranteed contracts.

  15. #120
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    Quote Originally Posted by IndyRealist View Post
    You don't understand how the system works. The team salary numbers are irrelevant for this discussion. The CBA guarantees that 48-52% of BRI is spent on player salary. Even if EVERY team were at the salary floor, the money still goes to the players. What I am saying is that for players to give up guaranteed contracts, you'd have to bump that up to over 60%, or around a billion dollars more.
    Team salaries are absolutely not irrelevant. You donít think teams look at the two teams in the finals paying massive tax bills and wonder if they can afford to compete? OKC was a poster child. They said they couldnít afford to keep harden and Ibaka, so they had to trade one. But realistically, they could have kept everyone, but would have had to pay huge tax bills. You donít think owners wouldnít love a cap that would prevent that from even being an option. Same with Cleveland right now. They basically are at the mercy of Lebron every year, and every year he can basically force their bill slightly higher. You donít think Gilbert wouldnít love a cap that says he canít spend more.

    I get what youíre saying. Owners would be reluctant to bump the cap floor in case things go horribly wrong. But realistically, if every team drops to the minimum expenditure, thereís a ton of problems in the league and the league is probably on the brink of failing. I donít see that being an issue in the next 5-10 years, which is what a renegotiated CBA would cover. And even if they have to give up a percentage of earnings to get this done, thereís no way it would be more than a percent or two. No chance the players get anywhere close to 60%.

    I guess we just disagree on this one. I think you can sell the owners in giving up a percent or two in order to take away the ability to spend crazy amounts of money for championship teams and giving them non guaranteed deals, to make roster turnover easier.

    The players sacrifice guaranteed deals for a percent or two higher total earnings. And you can consider removing max deals, but Iím actually not sure if the players are pro or con max deals as a whole.

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