I’ve been wondering about that 10% “smoothing of the cap” (to avoid another Durant situation). Any capologists here? If the league and players are supposed to split revenue 50/50, and the amount coming in triples, but the cap only goes up 10%, where does the additional money go?
The revenues go to the players in future years. I presume there is some sort of adjuster so that the money in future years is reasonably equivalent to the money the players would have gotten if not for the smoothing.
IIRC, POBOBS used to go into Danny's office and ask, "Is there any way we can get Jrue?" so he's been thinking about if for a while.
Ah! Thank you for this. Makes sense — just interesting that in the short term, some players might not see the same levels of salary as they would have otherwise. All in the name of competitive balance, which I get (and support), but still, there are some guys in the league who will end their careers with lower earnings than they would have otherwise. The players in aggregate will get the money eventually, but specific guys who would have in one system won’t in this one. It’s all generational wealth, of course, so not a lot of tears here. Just interesting.
There is an escrow system, where the extra money is basically banked by the owners and earns interest until it can get paid out to the players. This function worked in reverse during the pandemic, when the owners agreed to pay more than their contracted share of BRI in order to lessen the hit the players would take to their pay, and in exchange the extra got accrued and paid back out to owners the last few years to make them whole. Also, every year something like 10% of players' paychecks is automatically escrowed until the end of the year, so that if revenue comes in way less than expected they lose a portion of that (and if it comes in higher, they see it in the form of larger cap raises down the road). So I think if league revenue from broadcasting (40%-ish) triples, it will mean 10% annual cap raises for a LONG time, with a ton of money being escrowed as a sort of trust fund for the players' share of that.
I've wondered a few times in the last year+ how much the Golden State Warrior's experience from 2015 - 2018 influenced a bunch of moves the Celtics have made recently, and how they're thinking about the next few seasons
Yea, Brad couldn't stop smiling during the Jrue presser.
Yeah you're correct in this. The players will see some of it in the form of cap increases, some of which might end up larger than the year on year growth of revenue would otherwise have made them.
I wanted to pick this point out, since it's correct, and also has an additional implication: if you do that, you also have tons of movable contracts. GSW doesn't win that 4th title if they don't have Durant turned into DLo turned into (barf) Wiggins. Keeping that slot the whole time was critical.
I'm sure POBOBS and Zarren have everything gamed out. As many commentators have pointed out, the salary cap is going to increase so dramatically over the next few years, what we think is "superstar money" is going to be "good player money" and contracts like PP are going to be bargins - I mean he's going to be getting something 4-5% of the salary cap.
Yes, the point you raise is exactly why the players didn't agree to smoothing in 2016 - "Why would we voluntarily agree to reduce our immediate earning power"? Well as it turned out, most of the players didn't have their earnings increase - just a few who were lucky enough to be FAs that off-season got silly contracts - and as EFDM points out, GSW was able to create a real dynasty and I guess people don't think that suddenly increasing the cap is a good thing for anyone.
lgtm and wbcd's responses were mostly in line with my thinking on this as well. Yes, you're correct that growth solves a lot of problems. But I also have a lot of respect for Danny and then Brad's thinking on optionality. It's a bad thing to have a lot of rich contracts on guys who absolutely don't deserve them. You pay big in picks and/or have to take back someone else's junk to shed them. But it's not necessarily bad to have a bunch of middle-to-high tier contracts on guys who are desirable players. And having three different guys in that 30ish AAV and a couple of guys in the supermax tier (Brown, soon Tatum), gives you a lot of options. Throw in some bargain contracts and judicious drafting of role players, hold onto the majority of your picks, and now you have not painted yourself into a corner. If, God forbid, we end up in a situation where ownership suddenly has cash problems, nobody is an anchor around the owners' necks. And while nobody wants to go there, it sure as hell must be a comfort to the guys with the checkbooks that if shit hits fans, there are multiple escape valves. That probably empowers Brad in the short term (next few years) to keep that window open, since nobody is staring down armageddon. Not a cap expert, but seems right to me. And I think that it bodes well for a quiet and happy Derrick White extension.
The Brad GM philosophy, so far:
Contrast this with the most high-profile "We won't be able to afford all of them" deal - the OKC Harden trade, which simply didn't need to happen.
5. Immediately cut bait on slightly questionable fits or a YEAR early...Kemba, Tristan Thompson, Romeo, Denis Schroeder. He sold high on both Smart & TL, who look perpetually broken due to their style of play.
Good point. Selling high early is critical.
thanks for post, some highlights
