NBA Signs New $24 billion Deal with Disney/Time Warner

[Kliq]

http://online.wsj.com/articles/nba-reaches-long-term-rights-deals-with-disney-time-warner-1412557587
 
"https://twitter.com/RichSandomir">@RichSandomir</a>: NBA to announce $24 billion/9 yr deal w/ ESPN and TNT on Monday. Annual average value nearly 3x current deal.
 
Introducing your new NBA commissioner:
 

 

[Grin&MartyBarret]

Cap will jump substantially as a result.

Max deals signed under this current cba are going to look like a bargain soon.

 

[Curll]

Global Expansion Time for the NBA. 

 

[HomeRunBaker]

The expected value was said to be $2b now it's over $2.6b annually? Wow just wow!!!

Crappy 7-footers are celebrating everywhere!!

http://m.youtube.com/watch?v=ue-6MZFmXus

 

[Grin&MartyBarret]

If the formula remains the same, the cap would be $88 million when this deal kicks in.

 

[Apisith]

LeBron is going to make a lot of money when he signs his max with the Cavs.

 

[Grin&MartyBarret]

LeBron is going to make a lot of money when he signs his max with the Cavs.

Quick math makes a 5 year vet max deal worth about 180 million.

Of course, there's a lockout to be had first, but if the same basic agreement remains this is really good news for everybody.

 

[Apisith]

Surprised the other max guys like Melo didn't also sign a shorter deal first. It's looking like LeBron was the only one with advisers who knew what they were doing.

 

[HomeRunBaker]

Quick math makes a 5 year vet max deal worth about 180 million.

Of course, there's a lockout to be had first, but if the same basic agreement remains this is really good news for everybody.

I was just thinking that this pretty much assures some type of lockout. Hopefully it isn't for an entire season......I can take 20-25 games max.

 

[Grin&MartyBarret]

Surprised the other max guys like Melo didn't also sign a shorter deal first. It's looking like LeBron was the only one with advisers who knew what they were doing.

Everybody knew this was coming though. Hard to fault a guy like Melo, who has a lot of miles on his legs, from locking up risk-free money now.

 

[HomeRunBaker]

Everybody knew this was coming though. Hard to fault a guy like Melo, who has a lot of miles on his legs, from locking up risk-free money now.

I don't think Melo feels he has a lot of miles on his legs judging by his talking about wanting to play on Team USA in the future though.

No doubt some players have left a ton of money on the table. LeBron and Maverick were playing chess while others were playing checkers. It's no wonder Warren Buffet praised LeBron a couple years ago on his business/investing decisions.

 

[bowiac]

Everybody knew this was coming though. Hard to fault a guy like Melo, who has a lot of miles on his legs, from locking up risk-free money now.

It's also unclear how this is going to be structured. Given my understanding of how how the cap is set, it's possible there won't be a big cap impact for a few years. Anthony also has another opt out in this deal.

 

[bowiac]

No doubt some players have left a ton of money on the table. LeBron and Maverick were playing chess while others were playing checkers. It's no wonder Warren Buffet praised LeBron a couple years ago on his business/investing decisions.

Melo and LeBron were in pretty radically different situations. Melo has a lot more to risk from some decline in his game than LeBron does. 

 

[HomeRunBaker]

Melo and LeBron were in pretty radically different situations. Melo has a lot more to risk from some decline in his game than LeBron does. 

Yes agreed. I wasn't necessarily referring to Melo. More like the younger guys like a Kyrie locking into a 5-year deal.

 

[bowiac]

Yes agreed. I wasn't necessarily referring to Melo. More like the younger guys like a Kyrie locking into a 5-year deal.

I'm not sure Irving would have been wise to hold off either. He missed major time at Duke, major time as a rookie, major time as a sophomore, and 11 games last year. This caveat applies to Love too.

 

[HomeRunBaker]

I'm not sure Irving would have been wise to hold off either. He missed major time at Duke, major time as a rookie, major time as a sophomore, and 11 games last year. This caveat applies to Love too.

How so? Neither have had chronic problems with their joints that would affect their long term performance. Most have been freakish injuries like hands, thumbs and the such. Both players look like they will be severely underpaid over the second half of their contracts which was all I was saying by them leaving a ton of money on the table.

 

[Grin&MartyBarret]

How so? Neither have had chronic problems with their joints that would affect their long term performance. Most have been freakish injuries like hands, thumbs and the such. Both players look like they will be severely underpaid over the second half of their contracts which was all I was saying by them leaving a ton of money on the table.

Bowiacs right that the cap increases wont be immediate, and that $88 mil number is basically the highest level the cap can reach. Unlikely it'll get there during the course of either Melo or Kyrie's deals.

 

[HomeRunBaker]

Bowiacs right that the cap increases wont be immediate, and that $88 mil number is basically the highest level the cap can reach. Unlikely it'll get there during the course of either Melo or Kyrie's deals.

I'm hearing the 2016-17 season is when you'll see a substantial increase (close to $20m). Irving is locked into his new deal for 16-17, 17-18, and 18-19. I don't understand what you guys are arguing.

 

[bowiac]

How so? Neither have had chronic problems with their joints that would affect their long term performance. Most have been freakish injuries like hands, thumbs and the such. Both players look like they will be severely underpaid over the second half of their contracts which was all I was saying by them leaving a ton of money on the table.

I guess I'm not sure I'd classify Irving's injuries as "freakish", although Love's might be there. Either way, both indicate at least a little something about how they play, and their propensity for being injured. Maybe I'm wrong as to the likelihood of either player's injury history affecting their earning power however - I'm just eyeballing it.
 
Either way, given the old deal didn't expire until 2015-16, we're unlikely to see much of an increase until then regardless. At that point, until the new contracts "catch up", we may have a year or two of a weird discontinuity between cap figures and revenues, such that a lot of players are being paid pretty significantly differently than their cap number,

 

[HomeRunBaker]

I guess I'm not sure I'd classify Irving's injuries as "freakish", although Love's might be there. Either way, both indicate at least a little something about how they play, and their propensity for being injured. Maybe I'm wrong as to the likelihood of either player's injury history affecting their earning power however - I'm just eyeballing it.
 

Yeah I'm not debating Kyrie's durability as much as I am those types of injuries he's had affecting his earning power.

As far as freakish.....i would consider the broken jaw when he fell face first to the floor on a drive to the basket, the nasal fracture from an opponents elbow, non-displaced fracture of his index finger, and breaking his hand slapping a padded wall in a summer league practice to be in that category. I'd be much more concerned paying a Derrick Rose a max deal with his recurring knee problems along with his reliance on those knees to perform at a high level.

 

[bowiac]

Figuring out exactly what Kyrie is giving up if there is in fact a $20M cap increase in 2016 is hard because of how basketball related income is distributed. We could see a lot of teams hanging around the old cap number for a bit rather immediately jumping up to the new number, in which case, the financial hit isn't much.
 
But yeah, if there's really going to be an immediate jump in 2016, then I guess Kyrie and Love could have made a mistake. I'm still less sure about Irving, since security for him, with his relatively low career earnings to date, is probably worth about as much as an extra ~$12M from 2016-2018. Love will have already made $75M+ by then, so it's a different story for him.

 

[Grin&MartyBarret]

I'm hearing the 2016-17 season is when you'll see a substantial increase (close to $20m). Irving is locked into his new deal for 16-17, 17-18, and 18-19. I don't understand what you guys are arguing.

I dont think a 20 million increase in a single season is likely. And while its possible, its far from guaranteed. The math on Twitter makes the (potentially) false assumption that the money will be allocated equally in all nine years. It's likely that the owners will push hard for a more gradual allocation of the money, guaranteeing that franchise values will increase through 20-21 and establishing substantial yearly increases in the cap. Guys lime Melo, etc will be underpaid, but I dont think the increases in cap in those early years will be full 20 million dollar jumps.

 

[bowiac]

I dont think a 20 million increase in a single season is likely. And while its possible, its far from guaranteed. The math on Twitter makes the (potentially) false assumption that the money will be allocated equally in all nine years. It's likely that the owners will push hard for a more gradual allocation of the money, guaranteeing that franchise values will increase through 20-21 and establishing substantial yearly increases in the cap. Guys lime Melo, etc will be underpaid, but I dont think the increases in cap in those early years will be full 20 million dollar jumps.

I imagine unless the TV deal itself is structured like this (which would be unusual for sports TV deals), it's going to require negotiating this with the players. I don't think the players should be especially opposed, so long as the BRI income split remains the same. I've seen some talk that they'd consider this, but I don't know how complicated it would be to open CBA "tweaking" with the players with the prospect of a new CBA fight coming up anyway.

 

[Grin&MartyBarret]

I imagine unless the TV deal itself is structured like this (which would be unusual for sports TV deals), it's going to require negotiating this with the players. I don't think the players should be especially opposed, so long as the BRI income split remains the same. I've seen some talk that they'd consider this, but I don't know how complicated it would be to open CBA "tweaking" with the players with the prospect of a new CBA fight coming up anyway.

 
Should be interesting to see. A cap jump of 20 million in a single summer would make for a very entertaining off-season. Very excited to see how the the Nets manage to put together a roster that costs 160 million dollars in 2020 and still gets beat in the first round.

 

[Blacken]

Should be interesting to see. A cap jump of 20 million in a single summer would make for a very entertaining off-season. Very excited to see how the the Nets manage to put together a roster that costs 160 million dollars in 2020 and still gets beat in the first round.

Ricky Rubio gets two max contracts!

 

[HomeRunBaker]

I dont think a 20 million increase in a single season is likely. And while its possible, its far from guaranteed. The math on Twitter makes the (potentially) false assumption that the money will be allocated equally in all nine years. It's likely that the owners will push hard for a more gradual allocation of the money, guaranteeing that franchise values will increase through 20-21 and establishing substantial yearly increases in the cap. Guys lime Melo, etc will be underpaid, but I dont think the increases in cap in those early years will be full 20 million dollar jumps.

Maybe my math is off but my $20m guestimate WAS factoring in a gradual increase following that initial hit. If it was a full immediate jump wouldn't it be closer to $28m in the first year (16-17)? The annual TV revenue will be spiking from $1b to $2.67b assuming this is the sole increase in BRI that is an additional $830m or so to the players......assuming no expansion and the current 15-man roster of 450. Actually it may be closer to $30m in 16-17 with a full bump (sorry doing math on phone sucks).

Also, the players recognize they were hosed in giving up such a large pct from the prior CBA when they held 57% of BRI. I highly doubt they are going to simply agree to remain where they are now (49-51%?). These labor negotiations should be historical and the potential for an extended lockout just spiked on top of the naming of Michele Roberts to lead them. Her background suggests she isn't going to lay down and believe the owners claim that they were losing money which occurred last time.

Edit: I'm assuming no expansion which is a big assumption as we could see a team in Seattle as well as overseas (London? China?) as we close in on the 2020's. Stern has said in the past that this was all but a certainty by 2030.

 

[HomeRunBaker]

I can't post link to private board here but our most in-tune CBA contact reference Berger's piece today while commenting that Berger was one of hi main go-to guys during the last CBA negotiation.

http://mweb.cbssports.com/nba/writer/ken-berger/24740037/nba-enters-new-stratosphere-with-massive-tv-deal

 

[Grin&MartyBarret]

Maybe my math is off but my $20m guestimate WAS factoring in a gradual increase following that initial hit. If it was a full immediate jump wouldn't it be closer to $28m in the first year (16-17)? The annual TV revenue will be spiking from $1b to $2.67b assuming this is the sole increase in BRI that is an additional $830m or so to the players......assuming no expansion and the current 15-man roster of 450. Actually it may be closer to $30m in 16-17 with a full bump (sorry doing math on phone sucks).

Also, the players recognize they were hosed in giving up such a large pct from the prior CBA when they held 57% of BRI. I highly doubt they are going to simply agree to remain where they are now (49-51%?). These labor negotiations should be historical and the potential for an extended lockout just spiked on top of the naming of Michele Roberts to lead them. Her background suggests she isn't going to lay down and believe the owners claim that they were losing money which occurred last time.

Edit: I'm assuming no expansion which is a big assumption as we could see a team in Seattle as well as overseas (London? China?) as we close in on the 2020's. Stern has said in the past that this was all but a certainty by 2030.

 
Your math may be right, I was just assuming a gradual phase in, but as Bowiac points out that may not be possible until after year 1.
 
I have long been saying that the cap was going to rise dramatically, but this is well past what I was expecting and will be happening sooner. The landscape of the league just changed drastically, and did so basically overnight. I mean, that "Should the Celtics trade for Kevin Love" thread from like 4 months ago may as well have been about a different league.

 

[bowiac]

Zach Lowe, on the issue:
 

• “Smoothing” is a popular word now around the league. There is no way to avoid some shock to the cap figure at some point, but there are ways to ease the trauma. The league and its TV partners, the same partners as under the old deal, could agree to make 2015-16 sort of a hybrid year, at some price point between the old $930 million and the new $2 billion–plus. That would raise revenues more than anticipated for 2015-16, and thus raise the cap beyond the current $66.5 million projection.
 
Any post-2016 jump would thus be a bit less dramatic, since the jump would already be in motion. Several teams have been operating for months under the assumption the cap would reach at least $70 million for 2015-16, and any bigger-than-expected jump for that season could help teams on the borderline of having max cap room this July. Again: Everyone has a selfish interest here.
 
The league may not need the union for that particular smoothing mechanism, since it would be a deal between the networks and the league. For now, it seems like any smoothing mechanism would have a minimal impact, if any, on the 2015-16 cap; it may well stick around the current $66.5 million projection. But there will be a shock at some point, regardless of how the league and networks parcel out the cash over time.
 

Nothing really too "firm" here, mostly just speculation about the various options. 

 

[mauf]

I don't think any of the guys who signed deals in the past few months should be kicking themselves because of this new TV contract, which I assume was less surprising to people inside the game than to those of us on the outside.
 
A lot of people didn't think Kyrie was a max-money guy; if he doesn't seriously step up his game, he won't get another contract even close to the maximum. He was wise to maximize his guaranteed money, which will still put him back on the market during his prime years.
 
Unlike LBJ, most of his contemporaries (Melo, Wade, Bosh) are unlikely to be max money guys in four years, which is why all of them took five-year deals and didn't change teams. For similar reasons, it would've been foolish for any of those guys to sign a 2-year deal in hopes of capitalizing on the higher cap -- too much risk relative to the potential reward.

 

[bowiac]

I haven't looked into if this is true, but:
 
https://twitter.com/WFNYJacob/status/519153420507176960
 
https://twitter.com/WFNYJacob/status/519157642128658432

 

[bowiac]

A lot of people didn't think Kyrie was a max-money guy; if he doesn't seriously step up his game, he won't get another contract even close to the maximum. He was wise to maximize his guaranteed money, which will still put him back on the market during his prime years.

Yeah, this was another issue I saw. I didn't want to push it too hard since I know I'm (way) out of the mainstream, but I see Kyrie's defense as being so bad that he's not worthy of a max right now.

 

[HomeRunBaker]

I don't know who you are referring to but it was pretty widely accepted that Kyrie was signing a max extension with Cleveland. Who are those that were saying otherwise? Kyrie was the prototypical max guy......young elite player coming off his rookie deal. This was a no-brainer for awhile that he was signing a max.

Edit: Apparently there was one unconfirmed rumor that was quickly shot down last year.


Terry Pluto of The Plain Dealer:
Reports about the Cavs even considering backing away from a maximum contract are simply wrong.
My sources tell me that the Cavs have had no doubts about offering Irving the 5-year deal, and will do so. Once July 1 arrives the first date that an extension can be offered the Cavs will set up a meeting with Irving. They will present their All-Star guard with a contract extension, a 5-year deal in the $90 million range (or whatever is the maximum number).

 

[The Social Chair]

Curious what the OTT thing will be... an improved League Pass? archived library like the WWE network? 

 

[bowiac]

I don't know who you are referring to but it was pretty widely accepted that Kyrie was signing a max extension with Cleveland. Who are those that were saying otherwise? Kyrie was the prototypical max guy......young elite player coming off his rookie deal. This was a no-brainer for awhile that he was signing a max.

I think the point is that Kyrie got a max deal now, with the hopes that he improves. If he signed a two year deal, and didn't improve, then it's unclear he'd have gotten another max deal. Now that depends a lot on what you think of Kyrie Irving now. I wouldn't call him an elite player, but as I said, I'm pretty far out of the mainstream there, so it doesn't seem salient yet.

 

[HomeRunBaker]

I think the point is that Kyrie got a max deal now, with the hopes that he improves. If he signed a two year deal, and didn't improve, then it's unclear he'd have gotten another max deal. Now that depends a lot on what you think of Kyrie Irving now. I wouldn't call him an elite player, but as I said, I'm pretty far out of the mainstream there, so it doesn't seem salient yet.

I dunno. With most players entering their 4th season, especially nowadays, they are signed for their upside potential. Kyrie has already been named by the coaches to two All-Star teams, been the leagues Player of the Month 3 times, and was just the 1 and 1a by a fairly large margin along with Anthony Davis on Team USA which was loaded with max contract players. He's already at worst a Top-20 player probably closer to Top-10.

The qualms about his defense are way overblown just as they were for guys like Pierce, Ray Allen and other perimeter players stuck on lottery teams and that culture.

 

[bowiac]

This is quick and dirty math, but interesting all the same:

Assuming a best-case scenario of every playoff series going 7 games,we estimate the cable networks will pay on average $10 million for each of the 258 possible national broadcasts. That's compared to the NFL, where CBS, Fox, and NBC pay $34m, $36m, and $45m per broadcast window, respectively. (ESPN's deal is separate, and ridiculous; it pays $112 million dollars for each Monday night game.) Averaged out, that's $37 million per national NFL broadcast window.
 
37 is more than 10, but the NFL also draws a lot more eyes. This season, the NFL is averaging around 20 million viewers per broadcast window. Last year, the NBA averaged 2 million viewers per game, and that's on a downward trend.
 
Doing the math, that means the NFL is getting paid $1.84 for every viewer. ESPN and TNT, meanwhile, will pay the NBA a whopping $5.04 per viewer per game—or 274% as much. Are NBA viewers worth that much more? The money has to come from somewhere, which means it's on the Disney and Time Warner salespeople to convince advertisers basketball eyeballs have more value than those in the heads of football fans.

 
Also, ESPN paying $112M for a MNF game is amazing.

 

[mauf]

I dunno. With most players entering their 4th season, especially nowadays, they are signed for their upside potential. Kyrie has already been named by the coaches to two All-Star teams, been the leagues Player of the Month 3 times, and was just the 1 and 1a by a fairly large margin along with Anthony Davis on Team USA which was loaded with max contract players. He's already at worst a Top-20 player probably closer to Top-10.

The qualms about his defense are way overblown just as they were for guys like Pierce, Ray Allen and other perimeter players stuck on lottery teams and that culture.

 
 
I don't think anyone doubted the Cavs would give Kyrie a max-money extension. I know some people questioned whether that was a good idea.
 
Irving doubtless is more highly regarded among people who think Rookie of the Month awards (he was never PoTM), All-Star appearances, and performances in international exhibition games are important measures of a player's worth. He isn't viewed so favorably by people who look at advanced metrics. Even by traditional box-score measures, Irving has treaded water since his impressive rookie season. And although I tend to think the label "injury-prone" is used far too often, Irving has had more injuries than you'd expect from a player his age.
 
Now that LBJ is in town, Irving will get a chance to prove that he can play defense when he puts his mind to it, and that he's capable of becoming a more efficient offensive player when he isn't asked to carry a team that has no other decent scorers. If he can do those things, he's worth a max-money contract; if he can't, he isn't.

 

[HomeRunBaker]

 
 
I don't think anyone doubted the Cavs would give Kyrie a max-money extension. I know some people questioned whether that was a good idea.
 
Irving doubtless is more highly regarded among people who think Rookie of the Month awards (he was never PoTM), All-Star appearances, and performances in international exhibition games are important measures of a player's worth. He isn't viewed so favorably by people who look at advanced metrics. Even by traditional box-score measures, Irving has treaded water since his impressive rookie season. And although I tend to think the label "injury-prone" is used far too often, Irving has had more injuries than you'd expect from a player his age.
 
Now that LBJ is in town, Irving will get a chance to prove that he can play defense when he puts his mind to it, and that he's capable of becoming a more efficient offensive player when he isn't asked to carry a team that has no other decent scorers. If he can do those things, he's worth a max-money contract; if he can't, he isn't.

Meh when you stand out in competition like he did I put more weight in that than skewed stats on a horrific and dysfunctional team since the game is played so differently under those unique circumstances.

Obviously I don't put much stock in Rookie of the Month Awards (I misread) but aside from ones eyes his peers/coaches also recognized his skill level as a young player.

 

[Brickowski]

What's the delta between this new TV deal and the last one?  Does either side have an ETO?

 

[leetinsley38]

Article on how this effects the Celtics:  http://www.celticsblog.com/2014/10/6/6922563/an-early-analysis-of-the-impact-of-the-tv-deal-on-the-celtics
 
In short, generally not good:
 
1.  Now everyone will have cap space in 2016 right around when the C's were maybe going to be one of the few teams with space.  (queue the "no free agents sign in Boston anyway debate")
2.  Rondo - he's a Max player now with all the $ out there.  May be more likely we are the ones to give it to him (if not him then who with all this space?).  Actual advantage to have that max deal start in 2015 vs. 2016.
3. Nets picks - instead of cap hell and no way to improve the team, all those tasty picks may end up not worth much.  From the Zack Lowe article :  "The Nets, even with Deron Williams’s atrocious contract still on the books, could suddenly find themselves with two maximum cap slots — enough for Durant and a costar."

 

[wutang112878]

I imagine unless the TV deal itself is structured like this (which would be unusual for sports TV deals), it's going to require negotiating this with the players. I don't think the players should be especially opposed, so long as the BRI income split remains the same. I've seen some talk that they'd consider this, but I don't know how complicated it would be to open CBA "tweaking" with the players with the prospect of a new CBA fight coming up anyway.

 
This is contingent upon the players being smart and geting their act together to be a stronger union for this round of negotiations.  But if so, I would expect them to push back on this because they should want the BRI% to swing back in their direction this time around because their BRI% went down in the last round.  I wouldnt be surprised if the owners pull and three-card monte and point to the increases in the cap, but if the players are that stupid then they deserve less money anyway.

 

[ALiveH]

i wonder if teams will be giving out big contracts like candy right before the new deal kicks in b/c those contracts will end up look like decent deals when the revenue landscape changes.

 

[bowiac]

This is contingent upon the players being smart and geting their act together to be a stronger union for this round of negotiations.  But if so, I would expect them to push back on this because they should want the BRI% to swing back in their direction this time around because their BRI% went down in the last round.  I wouldnt be surprised if the owners pull and three-card monte and point to the increases in the cap, but if the players are that stupid then they deserve less money anyway.

I didn't mean at the next CBA negotiations in 2017. At that point, yes, I expect the players to push back on the BRI split.
 
I meant now, as a tweak to the CBA before 2017, to deal with the "smoothing" issue. They could keep the cap at $60M or whatever, but continue giving the players 50% of BRI. This would result in players on $10M/year deals earning like $13M/year. This would "smooth" the cap impact, while giving the players the actual money now.

 

[wutang112878]

I didn't mean at the next CBA negotiations in 2017. At that point, yes, I expect the players to push back on the BRI split.
 
I meant now, as a tweak to the CBA before 2017, to deal with the "smoothing" issue. They could keep the cap at $60M or whatever, but continue giving the players 50% of BRI. This would result in players on $10M/year deals earning like $13M/year. This would "smooth" the cap impact, while giving the players the actual money now.

 
I didnt articulate my point well.  If I was a player I would already be preparing to ask for a higher BRI in the next CBA.  Now regarding the revenue windfall, revenue is going to skyrocket and if the owners ask for a 'smoothing of the cap' but thats just effectively allowing them to pocket the money they arent giving to the players.  Which is why I'd be opposed to the smoothing as a player.  Another trick the owners would probably try to use would be the time value of money, using real simple math say the effective tax increase should be $20M a season for 5 seasons, a total of $100M   They would probably offer to give the entire $100M but instead of 20,20,20,20 and 20 at something like 5,10,20,30 and 35 using the present value trick.  Basically, I really doubt the owners first offer is going to be an equitable split with the players and I really hope for their sake the players push back.

 

[bowiac]

I didnt articulate my point well.  If I was a player I would already be preparing to ask for a higher BRI in the next CBA.  Now regarding the revenue windfall, revenue is going to skyrocket and if the owners ask for a 'smoothing of the cap' but thats just effectively allowing them to pocket the money they arent giving to the players. 

The proposal I'm talking about above lets the owners "smooth the cap", without pocketing any extra money. That's why in the hypo with the $10M/year contract, the player actually earns $13M. His cap number remains $10M, but he gets the 30% increase that the BRI split would dictate.

 

[wutang112878]

The proposal I'm talking about above lets the owners "smooth the cap", without pocketing any extra money. That's why in the hypo with the $10M/year contract, the player actually earns $13M. His cap number remains $10M, but he gets the 30% increase that the BRI split would dictate.

 
Would the 30% increase be for all players or just those that signed new deals?  If its all players then financially there is no change but it just creates weird accounting because cap = Cap * 1.3 and player compensation = Salary * 1.3, and I dont see whats accomplished by not increasing everything by 30%

 

[bowiac]

Would the 30% increase be for all players or just those that signed new deals?  If its all players then financially there is no change but it just creates weird accounting because cap = Cap * 1.3 and player compensation = Salary * 1.3, and I dont see whats accomplished by not increasing everything by 30%

It would work the same way the current escrow system works. Current player compensation isn't actually equal to their "salary". It's adjusted up or down, depending on total player "salary" across the league, such that final total player compensation equals the negotiated BRI split. So yes, it would work for all players. The accounting isn't any stranger than now. It's the same exact formula they use with the current escrow system.
 
But we're not increasing the Cap by 30% in this scenario. That's exactly what the smoothing is there to prevent. We're increasing compensation, without increasing the cap.
 
The proposal I'm talking about is the one Lowe mentions here:
 

They could mess with escrow funds that would set aside the players’ share of revenue from the cap itself, so that players would get paid in full without a corresponding leap in the team-by-team cap.

 
He calls it extremely awkward, which it is, but any solution is going to be. It's my preferred system because it uses a system already in place.

 

[wutang112878]

It would work the same way the current escrow system works. Current player compensation isn't actually equal to their "salary". It's adjusted up or down, depending on total player "salary" across the league, such that final total player compensation equals the negotiated BRI split. So yes, it would work for all players. The accounting isn't any stranger than now. It's the same exact formula they use with the current escrow system.
 
But we're not increasing the Cap by 30% in this scenario. That's exactly what the smoothing is there to prevent. We're increasing compensation, without increasing the cap.
 
The proposal I'm talking about is the one Lowe mentions here:
 
 
He calls it extremely awkward, which it is, but any solution is going to be. It's my preferred system because it uses a system already in place.

 
But this is a change to the system.  Today the Cap is BRI * player share / 30 teams  so if BRI skyrockets the cap does as well.  Also, if there is a supplemental payment to the players beyond the escrow account that is added to the cap.  From CBAFAQ #20
 

 
If the league didn't pay the players enough the previous season, i.e., if they had to cut the players a supplemental check to make their guarantee, then the shortfall, divided by the number of teams in the league1, is added to the cap. For example, if the players are paid $15 million less in 2012-13 than they are guaranteed, then the 2013-14 cap is adjusted upward by $500,000.
 

 
We're really just moving the problem one year into the future, since that entire supplemental payment is just added onto the cap in year 2.  Between the 1 year push out and having the TV deal slowly escalate instead of a big bang introduction, it just seems like excessive smoothing to me.
 
This is also still a change to the system.  If there is $1B in additional revenue the cap formula says the cap has to go up $15M = $1B * players 45% share / 30 teams   If it doesnt go up that full $15M then either BRI is being doctored or the players share is going down.  If the intent is keeping the cap intentionally lower than it actually should be, its a tweak to some variable in this formula.

 

[mauf]

Bowiac will correct me if I'm wrong, but I think he's suggesting a proposed modification to the cap mechanics that would require agreement of the owners and players. If the cap were kept artificially low, the existing escrow arrangement would result in more money for players who signed contracts prior to 2016, and less teams with cap room when the new deal kicks in. I don't think it will happen (because the players won't agree) but it's an interesting idea.