Re: Raptors/Memphis (Bosh to MEM, Gay to TOR)
Posted: Tue Feb 10, 2009 1:04 am
I wouldn't do it if I were Toronto.
Sports is our Business
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To illustrate, I modeled a situation in which league revenues increase by 2 percent in 2008-09 but declined by 3 percent in 2009-10. I'm not saying this will happen, but just humor me for a second.
If that were the case, the cap would decrease by about 0.5 percent in 2008-09 ... and then it would decrease by a whopping 5.6 percent in 2009-10. The cap would go all the way down to $55.2 million that year.
Remember all those teams that projected to be able to offer max deals to the likes of LeBron James and Chris Bosh in the summer of 2010? Those projections were based on a cap number in the $60 million range, not the $50 million range; needless to say, some of them might have to rework their plans. And others, like the Knicks, might not find it so easy to squeeze in two max-level contracts under the cap if it's not at the $63-65 million level we heard thrown around this fall.
Players will feel the effects as well. Max- and mid-level contracts will be scaled lower, and in general, free-agent money will be far less plentiful. It also means fewer players are likely to opt out of contracts over the next two summers.
So as we go into 2009, pay attention to all that arcane financial data and contract legalese that goes into setting the cap level. The effect could end up being far greater than anything that takes place on the court.
Sometime before the 2008-09 season, the cap and tax figures will be set based off revenue from this season and projections for next season. An early guess would be that the cap figure might be in the $57 million range, with the tax at about $70 million.
The immediate ramifications are that teams positioning themselves for a run at free agency next summer — including Portland — will have less room with which to work. If the trend continues for more than one year, the problems for each team multiply.