The NBA this season is arguably more competitive than it has ever been. The Western Conference is up for grabs and the Eastern Conference has three heavyweights at the top, each capable of knocking out the other with a mighty blow. While there is no single dominant roster that the rest of the league is chasing after, there are still highly talented teams in all different-sized markets. So what did the NBA decide to do with a new collective bargaining agreement? Try to create even more parity.
Per usual, the NBA was not able to get the players union to agree to a hard salary cap, so the league used its leverage to instead get an extremely firm one. ESPN’s Adrian Wojnarowski is reporting that the CBA that both sides have tentatively agreed to, there will be a second salary apron over the luxury tax line.
Once a team is $17.5 million over that line there will be far more penalties than simply an increasingly punitive tax on every extra dollar spent. Starting next season, teams that spend over the $17.5 million apron will be put at a competitive disadvantage. They will not be able to exercise the taxpayer mid-level exception, use cash in trades, take in more salary than they send away in trades, or have access to the buyout market.
No team dives as hard into the luxury tax as the Golden State Warriors. Going into this season they were $65 million over the threshold. All of that salary has resulted in the defending champions currently occupying the No. 5 overall seed in the west.
Franchise valuations are astronomically high. The Phoenix Suns sold for $4 billion this past winter while drenched in scandal. Marc Lasry sold his stake in the Milwaukee Bucks for $3.5 billion. There are way fewer Jerry Busses in the NBA these days and far more Joe Lacobs.
These are people with money to burn and new national television contracts are set to bring even more money into the league. And just like in other American industries, these tycoons want handouts and all the rules in their favor.
The league would argue that the players received a haul in return for these changes. Licensing revenue is now going to be included in what is defined as “Basketball Related Income,” which the league splits with the players. According to Wojnarowski and ESPN’s Bobby Marks, that is estimated to be worth $160 million next season. Also, the max salary is going up. Players can now sign new deals at a 140 percent increase, up from 120 percent.
In order to receive that full maximum salary though, players have to re-sign with their current team. So if players who qualify for a max deal want that fifth year they still can’t leave in free agency. However, since the dollar amount for that max deal is increasing it is now going to be much more difficult for teams to fit that salary in under a luxury tax — which now has harsh penalties that are far more wide-ranging than a simple financial hit.
What happens to the Detroit Pistons if they land the No. 1 overall pick in the 2023 NBA Draft and select Victor Wembanyama? A roster with him, Cade Cunningham, Jaden Ivey, and Jalen Duren could rise to contention quickly, but there is no way that they would be able to keep all of those players under contract once the time comes to extend Wembanyama.
That would be an ideal place for him to land if the league truly wants its smaller market teams to be able to contend for championships. A team that already has a lot of promising young talent. That massive Little Caesars Arena might finally start to see consistent sold-out crowds. Instead, with this new CBA the Pistons would be forced to make hard choices and likely end up with as many “what if” totals as it does wins.
Yes, the Warriors spend a lot of money, and new NBA owners like Mat Ishbia might be willing to do the same. That makes the sport more entertaining with people who will spare no expense to build a roster. Also, making it rain on a roster is no guarantee for a championship. If Khris Middleton does not get hurt in the playoffs, the Bucks would have been the favorite in a series between them and the Warriors. This season, with an even higher payroll, the Warriors have been scraping to stay above .500.
The NBA has finally achieved the parity that it has always wanted. There are championship contenders in Philadelphia, Boston, Milwaukee, Memphis, and Denver. The player who won the last two MVPs plays in the Mountain Time Zone.
All of that and the NBA somehow wants more parity. So breaking up the Boston Celtics is good for business? Administratively knock out a contender in an Eastern Conference that is so deep the Cleveland Cavaliers might be its betting favorite in 2024-25?
Competitive balance has arrived in the NBA and it’s here to stay. One would think that the league has achieved its goal. Or maybe, the NBA’s overall goal has nothing to do with parity, and everything to do with minimizing potential financial losses.