The NBA owners want a new salary cap, and it could be a stumbling block that leads right to an enforced lockout. The 2011 salary cap would need to be lowered so that the league can cut player costs as it wants; a ploy that the NBA Player’s Union is probably not going to accept without a big fight.
It would mean less money for the players, less power for the Union, and of course a lowered salary cap that could actually hurt some of the teams which have owners promoting the new labor agreement changes. This is all going to head down a negative road for the NBA, and could just about guarantee a lockout in 2011.
According to ESPN, the league is trying to reduce the player salary costs by about one-third in the new collective bargaining agreement. The Deputy Commissioner revealed that the NBA currently spends about $2.1 billion annually through player salaries and their benefits. Cutting one-third of that would be somewhere around $750 million coming off the books under any new agreements. For a league that is also projecting to lose about $340 to $350 million this season, that seems like a smart maneuver on the surface, but putting it into practice is something entirely different.
In order to cut the overall expenses by that much, they are going to have to drop the salary cap placed on each team. Not just that, but they will have to restructure contracts in order to make them not as devastating to the bottom line of certain franchises. It means that every player who is a free agent next season could see a hefty cut in what they might be paid in the free agent market.
The other way that teams could end up spending less money is by enforcing a hard cap in the NBA. Right now, it is just soft cap, where teams can go over the salary threshold and simply have to pay an extra tax on that overage. This is what is called the luxury tax in the NBA.
None of these ideas seem like something that the Player’s Union will ever agree to because it means less money in the pockets of its players. There is no collective bargaining agreement for the 2011-12 NBA season, meaning that there could be another extended loss of playing time if nothing is agreed to by the end of the 2010-11 NBA season. The owners would then lockout players in an effort to not pay their salaries, but the other end of that will be their inability to put a product on the floor. There could be some dark days ahead for the NBA, because it’s hard to imagine that millionaires arguing over money again will sit well in this economy.