Unintended Consequences of Max Salary Rule

[Old School]

Because salaries are limited by the CBA Max, we have the unintended consequence of players (LeBron/Wade/Bosh) and now (Melo and Paul) dictating where and with who they want to play.
Since a player will make the same on any new team they sign with or can force a sign and trade from the old to the new team, they can essentially go any where they want.

If salaries were limited only by how much of the Cap a team was willing to spend on one player then this situation wouldn't work. When this whole scenario plays out in the next few years, we'll have a handful of super teams and everyone else will have no chance. Competitive balance will be destroyed and fans, both live and TV, will loose interest. Oh, fans will come out to see the super teams once. But, they won't come out for say Milwaukee vs Utah.

The league is built around star power and every team needs a star to be successful.

[Heat11114]

Because salaries are limited by the CBA Max, we have the unintended consequence of players (LeBron/Wade/Bosh) and now (Melo and Paul) dictating where and with who they want to play.
Since a player will make the same on any new team they sign with or can force a sign and trade from the old to the new team, they can essentially go any where they want.

If salaries were limited only by how much of the Cap a team was willing to spend on one player then this situation wouldn't work. When this whole scenario plays out in the next few years, we'll have a handful of super teams and everyone else will have no chance. Competitive balance will be destroyed and fans, both live and TV, will loose interest. Oh, fans will come out to see the super teams once. But, they won't come out for say Milwaukee vs Utah.

The league is built around star power and every team needs a star to be successful.

What exactly do you propose? Why in gods name would the players union ever agree to it?

[Malinhion]

There's no payoff.

You just stated an alleged problem without proposing a solution.

[Jmonty580]

There is nothing that can be done to stop player from going to wherever they want to go. Good franchises will continue to be rewarded for being good franchises. Weak franchises in less desirable cities either need to make their teams more desirable or move. Its a business, and in a business there is always competition. Other teams will just have to get creative and I'm sure they would firgure out a way to make things work if your situation became reality.

[Friend_Of_Haley]

No Max. Let Lebron get 35M a year, he deserves it. He would never team up with his superfriends if he could have made market value. In the way he did go, he lost out on a minimal amount of money. To do so in a non max climate, he probably would have given up 100M.

[Heat11114]

I know everyone feels like they somehow got anally raped as a result of the Lebron decision but you can't just do away with free agency. The players are never going to agree to these restrictive measures aimed at keeping a player on a certain team. Notice that first word in "free agency".

Edit: It's actually kind of comical that people are looking at free agents departure as the problem. If anything these guys coming out under contract and letting it be known through sources, friends, etc that they want out is more damaging to the CBA and NBA system. These are the players picking where they want to play when they are under contract not the free agents.

[DonKilluminati]

No Max. Let Lebron get 35M a year, he deserves it. He would never team up with his superfriends if he could have made market value...

Cool! I didn't know you were a fortune teller!

Do go on...

[Friend_Of_Haley]

I know everyone feels like they somehow got anally raped as a result of the Lebron decision but you can't just do away with free agency. The players are never going to agree to these restrictive measures aimed at keeping a player on a certain team. Notice that first word in "free agency".

How is getting rid of the max getting rid of free agency. Its technically making everything more free.

Hard cap at the current luxury level, no max or mle or anything like that which messes with true market value.

When a player is a free agent he'd have the choice of potentially a dozen teams. Only restrictions would really be the number of years. It'd be as free as can be.

[Old School]

The PA would agree to it because it would allow any player to get as much as any owner was willing to pay. That would obviously benefit the best players. Remember when Michael got $30 and $33 million. No one can approach that salary under today's CBA.

Ultimately, what I'd like to see in all sports instead of a salary cap is what I call a Balanced Budget.
Under a Balanced Budget each team would have to submit a balanced budget to the league (i.e. all salaries, expenses, profits ...etc). They would have to spend an agreed upon percentage on player salaries based on the CBA agreement. Because the budget would have to be balanced, no team would loose money and the players would get their agreed upon percentage.

Team success (winning and profitability) would be determined by how well organizations spent their money and scouted talent

No team could afford 3-4 of the best players because they could get more money from other teams.

[Friend_Of_Haley]

No Max. Let Lebron get 35M a year, he deserves it. He would never team up with his superfriends if he could have made market value...

Cool! I didn't know you were a fortune teller!

Do go on...

Okay, I shouldn't say never.

Lebron gave up, what about 15M or something to sign with the Heat.

Now lets say that instead there was no cap on his earning potential. Based on the Euro rumors from a few years back and some other things I think Lebrons worth to a team under the current cap/tax is probably about 30-35M per year, as opposed to the 18.3 he got. Over 6 years that is a difference of $70-$100M dollars. Would he turn that down just for a chance to form that superteam? The odds are a lot less likely, thats for sure.

[BubbaTee]

The PA would agree to it because it would allow any player to get as much as any owner was willing to pay. That would obviously benefit the best players. Remember when Michael got $30 and $33 million. No one can approach that salary under today's CBA.

How does this prevent another Miami situation? As long as rich teams can still go over the cap, they'll still have a massive advantage over poorer teams like the Bucks.

I don't see how the ability of any team to pay Lebron $30 million prevents Lebron from forcing a $30 million sign and trade to the team of his choice.

Ultimately, what I'd like to see in all sports instead of a salary cap is what I call a Balanced Budget.
Under a Balanced Budget each team would have to submit a balanced budget to the league (i.e. all salaries, expenses, profits ...etc). They would have to spend an agreed upon percentage on player salaries based on the CBA agreement. Because the budget would have to be balanced, no team would loose money and the players would get their agreed upon percentage.

Not every NBA owner is in it to make money. Mark Cuban is in it to win games. Prokhorov probably is too. If that means operating at a loss every year, so be it. These are grown men, they don't need babysitters for their bank accounts.

[Malinhion]

Arison is also one of the wealthiest owners in the NBA.

[Friend_Of_Haley]

The PA would agree to it because it would allow any player to get as much as any owner was willing to pay. That would obviously benefit the best players. Remember when Michael got $30 and $33 million. No one can approach that salary under today's CBA.

How does this prevent another Miami situation? As long as rich teams can still go over the cap, they'll still have a massive advantage over poorer teams like the Bucks.

I don't see how the ability of any team to pay Lebron $30 million prevents Lebron from forcing a $30 million sign and trade to the team of his choice.

Well part of my solution would be a hard cap, which would pretty much address that worry.

But with a S&T in which the receiving team needs to operate over the soft cap, the player has much less power to try and force his way out. You want to go to that team? Fine you'll have to do it at whatever salary they can afford you at. If they're over the cap that mean MLE or Minimum.

Bosh and Lebron didn't force S&T's. They chose a FA destination. Once that decision was made a S&T was agreed to so that their old teams got something. In order to force your way out with a S&T would be much more difficult, and that player isn't likely to get what they could get as a true FA.

[DonKilluminati]

No Max. Let Lebron get 35M a year, he deserves it. He would never team up with his superfriends if he could have made market value...

Cool! I didn't know you were a fortune teller!

Do go on...

Okay, I shouldn't say never.

Lebron gave up, what about 15M or something to sign with the Heat.

Now lets say that instead there was no cap on his earning potential. Based on the Euro rumors from a few years back and some other things I think Lebrons worth to a team under the current cap/tax is probably about 30-35M per year, as opposed to the 18.3 he got. Over 6 years that is a difference of $70-$100M dollars. Would he turn that down just for a chance to form that superteam? The odds are a lot less likely, thats for sure.

I agree, but then again, you can look at it this way: The potential monetary gains from New York's behemoth marketing engine would, in my opinion, equate to about the same monetary gain/loss you're describing in a free market situation. So, in the end, you have to understand that LeBron did give up a lot of potential earning power by signing with the Heat, so you can't just throw it out there that 100 million would have made all the difference. If that was true, why wouldn't he have just signed with the Knicks?

[Friend_Of_Haley]

I question how much he actually lost by turning down New York. He still is Lebron James, he is a global icon if he is playing in Boise, Idaho. There are the rumors about Nike of course, but we don't know the truth to that.

The other issue is that Lebron still want's a good chance to win, and New York wasn't going to be the best place for that. Probably would have been 3 or possibly 4th, but I'll say 3rd.

[Malinhion]

I question how much he actually lost by turning down New York. He still is Lebron James, he is a global icon if he is playing in Boise, Idaho. There are the rumors about Nike of course, but we don't know the truth to that.

The other issue is that Lebron still want's a good chance to win, and New York wasn't going to be the best place for that. Probably would have been 3 or possibly 4th, but I'll say 3rd.

He made a lot of money by dodging New York State and City taxes (they have both).

[BubbaTee]

The PA would agree to it because it would allow any player to get as much as any owner was willing to pay. That would obviously benefit the best players. Remember when Michael got $30 and $33 million. No one can approach that salary under today's CBA.

How does this prevent another Miami situation? As long as rich teams can still go over the cap, they'll still have a massive advantage over poorer teams like the Bucks.

I don't see how the ability of any team to pay Lebron $30 million prevents Lebron from forcing a $30 million sign and trade to the team of his choice.

Well part of my solution would be a hard cap, which would pretty much address that worry.

But with a S&T in which the receiving team needs to operate over the soft cap, the player has much less power to try and force his way out. You want to go to that team? Fine you'll have to do it at whatever salary they can afford you at. If they're over the cap that mean MLE or Minimum.

Bosh and Lebron didn't force S&T's. They chose a FA destination. Once that decision was made a S&T was agreed to so that their old teams got something. In order to force your way out with a S&T would be much more difficult, and that player isn't likely to get what they could get as a true FA.

I didn't say Lebron forced a S&T. He didn't have to. But if he had to force one to get to Miami, how would these new rules (with the exception of the hard cap, I'll address that later) stop him from doing so?

Teams can trade for players while over the cap without those players needing to be minimum-salaried or exception-salaried.


RE hard salary cap -
The union will fight that to their last breath. The union doesn't really care which player makes how much money, as long as the total salary pool from all the players combined increases. If Derek Fisher gets the max instead of Joe Johnson, it makes no difference to the union - they'd just collect more dues from Fisher than Johnson, whereas now they collect more from Johnson than Fisher.

A hard salary cap reduces the total salary pool from all the combined players, since teams can no longer pay salaries above the cap. That means reduced total dues and reduced power for the union.

In addition a hard cap would be harmful to the league as a whole, as it would squeeze mid-level players out of the league since teams wouldn't be able to afford them. The max players wouldn't get squeezed, because they're the stars. You'd see a significant exodus of mid-level players to Europe if teams didn't have the cap flexibility to pay them. If all an NBA team could pay Josh Childress was the minimum, he'd still be in Greece.

While the NBA is clearly the premier club basketball league around, it's not in the same position as the NFL. The NFL can get away with a hard cap because other football leagues are jokes. NFL players are not going to go to Canada or the Arena league as anything but a last resort - NBA players will go, and have already gone, to Europe even though NBA teams wanted them.

[Friend_Of_Haley]

I question how much he actually lost by turning down New York. He still is Lebron James, he is a global icon if he is playing in Boise, Idaho. There are the rumors about Nike of course, but we don't know the truth to that.

The other issue is that Lebron still want's a good chance to win, and New York wasn't going to be the best place for that. Probably would have been 3 or possibly 4th, but I'll say 3rd.

He made a lot of money by dodging New York State and City taxes (they have both).

State taxes are overrated in the grand scheme of things. All these guys are gonna be in the top federal tax bracket which is how you lose the most money. New York City is unique in that they also have the city income tax as well as just a general high cost of living, but when its all said and done, they're all at the VERY least at the 28% Marginal Tax Rate (the AMT) if not the 35% regular bracket. That's whats losing you the most money.

[Winsome Gerbil]

Because salaries are limited by the CBA Max, we have the unintended consequence of players (LeBron/Wade/Bosh) and now (Melo and Paul) dictating where and with who they want to play.
Since a player will make the same on any new team they sign with or can force a sign and trade from the old to the new team, they can essentially go any where they want.

If salaries were limited only by how much of the Cap a team was willing to spend on one player then this situation wouldn't work. When this whole scenario plays out in the next few years, we'll have a handful of super teams and everyone else will have no chance. Competitive balance will be destroyed and fans, both live and TV, will loose interest. Oh, fans will come out to see the super teams once. But, they won't come out for say Milwaukee vs Utah.

The league is built around star power and every team needs a star to be successful.

This is actually a very strong observation (I say that because I have made it myself ). Wihtout the max salary rule, what happened in Miami probably does not happen. Instead of giving up a few million a piece, those guys would have been giving up the potential for $10 mil a year more, halving their salaries etc.

But I remember how it was before the max salaries came about, and returnign to that stupid time when single players were getting paid like Alex Rodriguez and taking half the cap is ridiculous too (unless you happen to be a slimewad sports agent). So...I am in favor of looking at a potential franchise player tag of some sort. Perhaps nothing more than the ability for a team to tag one player on its roster as restricted. What ahppened just has to be stoped from spreading across the league or it really is a disaster for the league. But I don't see going back to the days of superstars holding their teams hostage for 10 year contracts as the answer.

P.S. the observation above about Europe being a much greater threat in basketball than it is to the NFl is also very strong. Ironically the NBA's very concern wiht spreading the game's popularity around the world limits its bargaining position vis a vis its players. It can't chop salaries too far or get too draconian or the top European teams absolutely come into play and could slowly start to drain of talent fro the league. Let that go on long enough, and 10 years down the line you have created a real competitor to the NBA and split the best players in the world amongst several leagues ratehr than getting to watch them all play eahc other under one roof.

[Malinhion]

I question how much he actually lost by turning down New York. He still is Lebron James, he is a global icon if he is playing in Boise, Idaho. There are the rumors about Nike of course, but we don't know the truth to that.

The other issue is that Lebron still want's a good chance to win, and New York wasn't going to be the best place for that. Probably would have been 3 or possibly 4th, but I'll say 3rd.

He made a lot of money by dodging New York State and City taxes (they have both).

State taxes are overrated in the grand scheme of things. All these guys are gonna be in the top federal tax bracket which is how you lose the most money. New York City is unique in that they also have the city income tax as well as just a general high cost of living, but when its all said and done, they're all at the VERY least at the 28% Marginal Tax Rate (the AMT) if not the 35% regular bracket. That's whats losing you the most money.

You are laughably wrong.

The Federal Rate (top bracket 35%) obviously applies to any max free agent. The difference is made at the state and city level, where Florida has no withholding.

In New York, Assembly Speaker (and de facto Governor) Sheldon Silver and other Democrats will impose a two percentage point "millionaire tax" on New Yorkers who earn more than $200,000 a year ($300,000 for couples). This will lift the top state tax rate to 8.97% and the New York City rate to 12.62%.

Their tax rates just went up again on September 1.

He'd be giving up at least an additional $14m. That basically means that he'd be playing a season for free just to live in New York. No thank you.

If that's just a drop in the bucket to you, you must be an oil sheikh or something.