The National Basketball Players' Association announced today that it has rejected the league's "cap smoothing" proposal, an idea floated by commissioner Adam Silver that was supposed to be an artful way of dealing with the massive influx of cash that will be coming into the league once the new TV deals kick in. The NBPA's decision to reject the proposal brings far-reaching implications, and is just the latest signal that Michele Roberts's union actually means business.
The NBA's current $930 million per year TV rights deals expire after the 2015-16 season, at which point the league's new deal—worth $2.6 billion per year—will kick in, bringing with it a spectacularly large flood of cash. That big of an increase in revenue would have a profound effect on the league's salary cap, because the cap figure is an agreed-upon percentage of league revenue. This season's salary cap sits at $63.065 million, but that would jump to an estimated $88 million in 2016, once all those TV billions start flowing into the league's coffers. That $25 million or so jump is huge—you can fit an entire LeBron James salary in there with about $5 million left over.
To avoid that sort of rapid paradigm shift—and what will almost certainly be a whole mess of teams making moron decisions under newly complex conditions—Silver proposed a plan in which the cap would be smoothed out gradually. The idea was to increase the salary cap incrementally over the next few seasons, keeping it far below where all that new money would allow it to reach, and then paying the amount of the shortfall directly to the NBPA to be distributed equally among the players. Player reps for the union unanimously voted against this plan at the All-Star break, and today it was officially rejected.
This means that any player who is set to become a free agent after next season is going to get paid. This also means that free agency is going to be very weird this summer and the next. Guys who are free agents this summer might be reluctant to sign anything other than a one-year deal, knowing that a huge cap spike and the chance to earn a lot more money is coming in summer 2016. And teams that have been carefully maneuvering to leave themselves with cap space going into the 2016-17 season are kind of boned, because everyone is going to have cap space now.
A few months back, Roberts had said that the spike in cap space was just "an accurate reflection of revenue," so rejecting the idea isn't out of left field. But it's also part of the long lead-up to the next CBA fight.
For one, you can see the seams of the NBPA's constituency showing, and how that's going to inform the next labor bloodbath. Here, good young players who will be coming into new contracts in the next few years will make out like bandits in the summer of 2016—but it's certainly bad news for aging players who still have a few years left on their contracts. Under the cap smoothing plan, they would have gotten a little bonus over the next few seasons via the shortfall payout, but now all that money will be going to free agents, and the older guys won't see any of it if they age out before getting a shot at another contract. Bottom-rung players are also going to be stung by the NBPA's decision, as minimum salaries have already been set by the CBA and are not tied to the salary cap. Players on minimum contracts would have gotten some of the shortfall money if the smoothing proposal was approved, but now they'll get nothing.
But this decision wasn't made on the whim of prioritizing the young over the old, or one class of free agents over another; it was made with eyes on upending the entire landscape of NBA free agency. Michele Roberts has already begun laying track for fights along the waterfronts of the max player salary, the rookie scale, the rookie age limit, and even the salary cap as an institution. Rejecting this deal is the next rail spike.
The cap smoothing deal would also be voided if the NBPA opts out of the current CBA after the 2016-17 season. This rejection is a pretty big clue that the union plans on opting out. The cap smoothing would have taken multiple years to implement, but this way the players get to reap the full, accurately reflected rewards of the cap spike immediately, opt out, and then negotiate a new, more player-friendly CBA. At this point, the owners will groan about the players making demands the year after they all got giant raises—raises which will have been determined by a gigantic influx of cash to NBA teams themselves—and wag a finger at the avaricious dickheads in their locker rooms. This lockout is going to be fun.