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Tuesday, September 13, 2011
The hard part of the hard cap

By Henry Abbott

The good bet was always that, for all the talk about hard caps and draft picks and age limits, these CBA talks were really about dollars. And if the league and the players association could agree on how to carve up the revenue pie, everything else would be simple to negotiate.

And yet, amazingly, both the players and the league implied on Tuesday that a solution to the money problem is in sight, but talks have been broken off because they simply cannot see eye to eye.

If it's not money, what is it?

It's the structure of the salary cap. The players really want it to stay roughly like it is (with exceptions such as the mid-level and Bird rights), while the NBA simply does not want, in essence, the Lakers to spend more than twice as much on players as the Kings, which they currently do thanks to those same exceptions.

Why the league cares

The league is sometimes accused of being closed to big new ideas. This is its big new idea.

This is the innovation it is pursuing to make the league stronger and more prepared for the future. It's part of transitioning the league from one that's optimized to make money from tickets and the in-arena experience, to one that's built for television and, the way things are headed, the future of the global, handheld device-infused sports industry.

Television viewers like close games. The idea is that more close games make the league a more valuable property, which lead to higher TV ratings, which lead to more revenues for the entire league. There is research about the effect of parity on TV ratings, they say, to prove this.

Why that's suspect

I have talked to economists about this, and they say that there is not strong evidence that parity will have a big effect on TV ratings.

Some even question whether it's possible for the league to do anything to change how wins are distributed. Wins mostly go to teams that combine players drafted incredibly high with excellent management. And nothing about a salary cap can make more really good players, or more really good GMs.

Why players care

If players are willing to play for $2 billion in total salaries, or some number close to that -- and they did for something similar last year -- why on earth would they be offended by making that amount again? How can this be a crisis? Why is this what they call a "blood issue"?

This might be the one part of these talks that mirrors, ever so slightly, real life.

The players associations' point is this: At the moment, NBA players have real jobs. They're employees. They have contracts, benefits and, by and large, income they can count on. They can plan their own financial futures.

If teams had hard caps, however, they would stop offering all those guaranteed contracts. (Important side point: It's often said that NBA players have guaranteed contracts, like that's a rule. But it's not. They have guaranteed contracts because they negotiate them. But teams are free to offer players non-guaranteed contracts, and often do. The good players, however, seldom sign them.)

In the NFL, where there is a hard cap not unlike the one the NBA is proposing, employers have far shabbier commitments to players. This is where it's a bit like what has been happening in the American workforce. In the NFL, says Billy Hunter, a few star players have real jobs with guaranteed income, but everybody else can be sent packing at the whim of an owner or a GM.

The rules don't make that so in the NFL, but the market does. With every team capped, players don't have the leverage to shop around for better deals. So they take these "make-good" deals. Which makes the entire business of being a professional athlete far more risky.

Which is a funny thing to ask members to take on in a league in which TV ratings are through the roof.

Why that's suspect

The first reason is because that situation Hunter is describing, in which a few stars have good deals and the rest of the team is treated like filler? It's already the trend. Miami is modeling something close to that. Boston and San Antonio, too.

More importantly: The league has now made public that they are offering to guarantee that all players together will make some amount of money, let's say $2 billion. In other words, this is not a sneaky way to drive down total player costs, nor to treat players poorly. All players together will make that amount, says the league, whether there's a hard cap or not.

So it's not like players as a whole could get stiffed. It's more that for many individual players, maybe even most, the job would lose a lot of security. The union is intent on preventing that.