NBA smoothing provision

[ranger001]

Instead of the cap jumping by about 20 million in 2016-2017 the NBA had proposed to smooth the increase over a few years. We know that if salaries fall below the negotiated BRI share then the players will get the money that is owed them regardless of what the salary cap is. Why did the players reject the smoothing proposal? I would think it would benefit any player that is not becoming a free agent in 2016-2017.

[Smitty731]

I haven't seen any definitive reason they rejected the proposal. All I have seen is "we are doing what is in the best interest of our players", which is a pretty standard line. Speculation is they like the idea of the big jump because it will give many players a chance to make a large amount of money all at once. And we all know NBA teams can't help themselves when they have money to spend.

[winter_mute_13]

I would also suggest that teams are more motivated to do cap smoothing than players, which means players might be able to wrangle other concessions for agreeing to this, even if it ultimately benefits both.

[HartfordWhalers]

Instead of the cap jumping by about 20 million in 2016-2017 the NBA had proposed to smooth the increase over a few years. We know that if salaries fall below the negotiated BRI share then the players will get the money that is owed them regardless of what the salary cap is. Why did the players reject the smoothing proposal? I would think it would benefit any player that is not becoming a free agent in 2016-2017.

If you accept the premise that a higher salary cap figure is better for the players than a lower one, then its easy to see why smoothing as proposed by the league is a no go.

The league proposed to solve smoothing by having the cap jump less than it normally would:

The players would receive every nickel of their 51 percent that year, but we would artificially lower the cap and then make a shortfall payment directly to the union

If you want to argue that the salary cap figure doesn't matter at all, because of the BRI split, then it is curious that the league didn't propose an accelerated growth to the larger cap number, with this upcoming season used to split the difference.

As for why a higher salary cap number matters even with the BRI split formula:
1) It enables current players to get more long term money guaranteed to them. The value of this increased security is a real gain on the individual level.
2) Current long term contracts would be subsidizing future contracts -- as the cap rises the shortfall money would decrease and anyone who signed a long term deal would be at a comparative loss. This not just pits current free agents against future free agents (who might not even be in the league now), but also creates a systematic incentive for shorter contracts which is disadvantageous to the players.
3) The 51% split is not guaranteed to last for the life of those contracts. As simple as that, the you will get all your shortfall can only be said to apply to years for which there is a CBA guaranteed to be in place. And long term deals signed even this summer don't have that guarantee, least of all ones next summer.

4) Wage inflation might lead to revenue inflation. This one is speculative, and really not needed, but worth mentioning. I would argue it is safe to say fair number of owners picked an NBA franchise versus a more traditional investment not just because of its investment possibility. And in terms of the investment aspect of an NBA business, growth in franchise value outstrips traditional discounted cash flow analysis.
So, if you accept that those two are not fully interconnected in the short term, then you can see how owners might be looking at:
Maximizing franchise value growth which is different from maximizing BRI.

If NBA franchises felt pressure to find an extra 2-3m a year (individually), could they find some revenue streams?

For example, so far the NBA has chosen not to put advertisements on uniforms, despite estimates ranging from 800k to 10m per team from this. Unless you think there will be an offsetting immediate reduction in revenue and profits elsewhere (Jersey sales plummet?), then the most obvious reason to say no to this would be that it dilutes the value of the team brand. That value of the team brand might help selling the franchise in a few years, but it also might not translate into bri for a while, leaving the players with a smaller real amount of money.

[andyhop]

The fact that the league has a soft cap means that a lower smoothed cap number doesn't automatically lead to a BRI related payout to players or if it does the amount doesn't have to be the full difference between what the salary cap is and what it should be.

[Sixerscan]

Instead of the cap jumping by about 20 million in 2016-2017 the NBA had proposed to smooth the increase over a few years. We know that if salaries fall below the negotiated BRI share then the players will get the money that is owed them regardless of what the salary cap is. Why did the players reject the smoothing proposal? I would think it would benefit any player that is not becoming a free agent in 2016-2017.

Here's one factor in addition to what has been said. The player's union is disproportionately run by the super stars. The higher the cap is, the higher the max salary is for new contracts. So, if you are a super star, you always want the cap to be as high as possible.

So, all the super stars that have been planning to be free agents in 16 and 17 pushed hard for no smoothing.

The President of the player's union (Paul) is set to be a free agent in 17, and the VP (LeBron) will be a free agent in 16. Both are superstars. Funny how that works out.