Some say the mini-max deals signed by major Class of '03 stars some 18 months ago were made in part due to assumptions the 2011 CBA would tighten up player salaries much as the 2005 version did. (The 2005 CBA, which the league currently operates under, put stricter limits on salaries and contract length.) But even further, union boss Billy Hunter told reporters Saturday that the association and the league are discussing the framework for a new CBA far in advance of 2011.
Howard Beck of the New York Times reports David Stern as being slightly more pessimistic that anything the parties do now will prevent deep, deep cuts to teams' bottom lines over the next few seasons. That fits both Stern's personality and his purpose: the commissioner is always cautious (if proud) of the league's growth, and it really behooves him (as an employee of the team owners) to make things sound as dire as possible when it comes to franchise books.
Of course, the current CBA has mechanisms to deal with the awful economy, as the salary cap and luxury tax levels are based on a percentage of the league's total basketball-related revenues. The cap is set at 51 percent of the league's basketball-related income, with benefits pulled out. Maximum salaries are generally derived from the cap (25-35 percent of the cap, depending on years of service). So theoretically, if the league's income decreases substantially this year, next year's cap will be lower, and the maximum contract signed by Brandon Roy will be less than maximum contract signed by Deron Williams last season.
ESPN's John Hollinger notes a more worrisome possibility:
Here's the more interesting part of what I was told: Next season's luxury tax might just be the tip of the iceberg. The salary cap (and thus the tax level) could drop massively in 2010; my source used the term "bloodbath."Teams are already panicking about being over the luxury tax during this "bloodbath" season (in terms of the owners' extra-NBA holdings). If the luxury tax line shrinks substantially, everyone is going to be worried, and teams will be fighting with each other to lose contracts to below-cap teams.
This would have huge effects on the pursuit of big-game free agents, of course, but also on the luxury-tax level for that season ... which could push many more teams over the line and lead to fire-sale-type trades.
Think about this: in 2007, Phoenix gave Seattle two first-round picks to take Kurt Thomas off their hands so that the Suns could get under the tax line. Now increase the number of teams trying to shave salary, since the tax line will be lower. That necessarily decreases the number of teams that will be under the tax line, since NBA teams represent a finite population.
How many draft picks will Robert Sarver fork over next January to get some team under the cap to take on Shaq's 2009-10 salary cap figure? I must say, it's going to pay big dividends to be under the cap for the next 18-24 months.