Hard Cap

[JCWalters]

Dboys
You are still misrepresenting your behavior as some innocent victim while misrepresenting my post to put your fabricated words in my mouth. I have asked you, again and again, to stop lying about what I have posted. But you continue to post your misrepresentation of my statments. If you made a comprehension error, then you could have just said so; no need to twist what I wrote to fit your mistake.

When I write "in recent times," I mean "in recent times." I don't mean "always." How can anyone HONESTLY think that he can credibly twist "in recent times" to mean "always?" Also when I talk about the worth of a franchise, I AM NOT talking about the profit or loss an owner accrues from the sale of the franchise. How can anyone honestly think he can twist the statment "the sticker price of gasoline is $4.00" to equal the statment "the gas station owner is making $4.00 profit on gasoline?"

But you will never answer my questions. Instead, you would rather write that you do not intend to "prove" yourself to me and that you have tried to explain to me that I am wrong when I refuse to accept your assertions that "in recent times" means "always" and the phrase "sales price" means the same as the phrase "sales price - cost = profit." I am not going to lie about clear meaning words just so you can say that you are right.

As for you declaring that you would rather talk to someone else, I would prefer that you did not talk to me at all, or, if you cannot refrain, please, at least, stop misrepresenting my posts. And from what I have read in this or another thread, I am not the first to accuse you of, expressly or implicitly, misrepresenting other people's words.

[JCWalters]

They are trying to prove nonviability to argue nonviability, not nonprofitability to argue nonprofitability.

For an owner if a franchise is non-profitable then its not worthwhile.

Disagree, most owners are in the NBA to make money. These guys are not investing billions in the hope that they can be the 1 of 30 teams that hoist a championship.

The objective of the salary cap, luxury tax, etc. is to create this level playing field; It is not to ensure that any or all owners make a profit. This is true irregardless of what the owners are in the NBA for. Remember, the owners are not kings who can just institute a salary cap, luxury tax, etc. They need the players' consent. Thus, players have a say in the intent of any caps, taxes, etc. Are you saying that the objective of the players is: "owners being in the NBA to make money?" I am pretty sure the players' objective is to make money themselves.

Both the players and owners are in it to make the most money possible. The CBA is a way of balancing these interests, levelling the playing field is a happy byproduct of each owner making money. Where are you getting that the sole purpose of the CBA is to level the playing field?

Yes this argument we've heard before, the owners are shooting themselves so they should only blame themselves. Even if that is true they still have every right to attempt to institute rules that protect them from shooting themselves in the foot. If they want to lose a year to institute those rules then they pay the bills and they can do it.

No. No one has the right to attempt to break the law. And no owner(s) has the right to attempt to collude to fix prices. The US code is quite clear on the legality of colluding to fix prices. And the code (and probably many state laws as well) says it is illegal. And the owners can pay the bills 1000x over and lose a 1000 years, but that will not change the anti-trust strictures against price-fixing and collusion.

They are exempt from antitrust because the CBA was agreed upon between the union and the owners. If there is no NBA it hurts the players more so the owners have more power in this little war thats about to unfold.

1. Your whole context is wrong. Remember what the present situation is: Owners in negotiations looking for a convincing arugment to make players make givebacks.
GOOD ARGUMENT: "Make givebacks or the league will fold due to nonviability."
WEAK ARGUMENT: "Make givebacks or I (the owner) will make less money.--> then I will sell the team and a new owner will pay you your current salary."
As you can see, if you get the context correct, owners looking for a convincing arugment to make players make givebacks, then "For an owner if a franchise is non-profitable then its not worthwhile" is irrelevant. An owner crying that it is not worthwhile and selling the franchise will just mean a new owner will buy the team and that new owner will pay the players the current salary.<-- how is that threatening??

2. True: "Both the players and owners are in it to make the most money possible." Your statement here supports me and discredits your position.
Examine:
1) the players' objective is to make as much $$ as possible
2) the CBA is a product of collaboration between players and owners--> thus, the CBA's objective must be an objective that both the owners AND the players share
3) your assertion that the objective of the CBA is to ensure/encourage profit for owners means that you are asserting that the players' objective is to help the owners get as much $$ as possible!!

Now, to you: where are you getting that the sole purpose of the CBA is to ensure/encourage profitabilty for owners? Ask yourself: are the players' primary goal that of maximizing profit for owners? You just wrote that it is not.

3. No. Businesses get exemptions from anti-trust laws for PRODUCTS OF COLLABORATION BETWEEN MANAGEMENT AND LABOR. Look at what you wrote in your previous post: "If they want to lose a year to institute those rules then they pay the bills and they can do it." Any rules that owners "institute" (instead of agree to with collaboration with labor) is open to antitrust attack. Unilateralism is the issue. Your "they pay the bills and they can do it" is akin to a parent's UNILATERAL DICTATE to a child: "I pay the bills, so my way or the highway." Any unilateral action (noncollaborative between labor and owners) is not protected from antitrust attack.

[JCWalters]

Dboys, you are really playing up the wounded victim. It is very amusing. However, on more substantive matters, I do think that you are lying. I think that you are a liar. But I have given you the benefit of the doubt through at least 2 exchanges already; yet you continue with the mischaracterization of my posts. Now you are saying that I have mischaracterized your replies. I simply asked you to explain yourself, w/o the huffing and puffing that you are prone to, as to how you can, among other things, believe "in recent times" means "always." Again, such behavior is not normal. Also, your accusation of me "intentionally misconstruing" your words needs a lot of work to be a credible lie. I stated a point and then you responded to that point after having twisted my point to mean what you wanted to fabricate. I then instructed you as to what I meant and then told you to read my post again. How can I misconstrue your words when I was repeating my words and telling you to reread?

But I thank you for your last post. You clarified that I was mistaken to have given you the benefit of the doubt. You are not ignorant. You are an ignorant liar.

You're crossing the line here into personal attacks which is against the realgm TOS. You can attack the poster's ideas not the poster. If you continue down this road you will get banned.

I wrote "in recent times"; Dboys asserts that I meant "always." I wrote about the worth of a franchise (the value or present value of a franchise); Dboys asserts that I posted about the profit or loss from the sale of a franchise (sale price - cost). I wrote about viability not including interest; Dboys claims I wrote about profitability not including interest.

I explained my post to him at least twice and told him to reread and to reread slowly. He insisted that I wrote what he fabricated that I wrote. I gave him the benefit of the doubt at least twice, but he kept saying I was talking about A when I clearly wrote B.

So, yes, I am saying his post of what I said is a lie, a fabrication, an intention misrepresentation. When I write 1 + 1 = 2 and a person insists, 2 or 3 times, that I said 1 + 1 = 10, then I will call him out on it. How can I communicate that his repeated assertions that I wrote 1 + 1 = 10 is untrue w/o saying that he is misrepresenting, mischaracterizing my posts?

Queston to you, ranger001:
I disagree with your positions in this thread.
Dboys agrees with your positions in this thread.
Dboys blatantly twisted my posts into what he wants and puts those twisted words in my mouth, and Dboys levies insults towards me--apparently I pontificate and am a fool. Yet, you JUST accuse me of attacking another poster?
You need to examine your own intentions. Don't threaten me with a ban just b/c I disagree with you. Your pretext of maintaining adherence to the TOS is transparently just you trying to intimidate me just for not agreeing with you.
You can report me/ban me all you want; your attempt at intimidation is improper and weak. I still won't agree with your positions.

[DBoys]

JC, Ranger is right. Your repeated and constant attempts at insults are over the TOS line. The rationale for banning personal attacks and attackers is because they make threads into some sort of personal fight, rather than a discussion of ideas that will be of interest to everyone, and they are boring. Could I have belittled you in return for the insults, if I wanted to go that direction? Sure, but other than a sense of evening the scales, that goes nowhere. Why bother?

I still don't see any sense in spending time on fighting some sort of internet war. There are plenty of people to talk with and places to spend time, without such nonsense.

I'm not a liar and I'm certainly not ignorant. If you looked rather than reacted, you'd see that I was simply attempting to clarify/understand your assertions, and then you launched into insult mode. Look at my replies of Mon May 30, 2011 1:05 am and Tue Jun 07, 2011 7:48 am and you see nothing that's insulting, just conversation along with general disagreement with some of what you're saying.

Yet from my attempts at understanding or getting clarification, you launched into silly attacks rather than have a normal discussion with me. I tried to get things back to some sort of ordinary exchange, and made pains to be collegial, but you went the other way. So why would I now care to unravel the thread and the topic for you so that you can comprehend? I don't.

I still think you're far off base on your opinions as to what is logical, and what should be accepted, in NBA ownership's stance in these negotiations. We'll leave it at that.

[ranger001]

Queston to you, ranger001:
I disagree with your positions in this thread.
Dboys agrees with your positions in this thread.
Dboys blatantly twisted my posts into what he wants and puts those twisted words in my mouth, and Dboys levies insults towards me--apparently I pontificate and am a fool. Yet, you JUST accuse me of attacking another poster?
You need to examine your own intentions. Don't threaten me with a ban just b/c I disagree with you. Your pretext of maintaining adherence to the TOS is transparently just you trying to intimidate me just for not agreeing with you.
You can report me/ban me all you want; your attempt at intimidation is improper and weak. I still won't agree with your positions.

Its actually better to have people who disagree, this is what discussion is about.

Howver the fact is that you did attack a poster, you called him an ignorant fool. Look at yourself, if everyone is rioting and looting it doesn't mean its ok for you to riot and loot.

Now you have a choice, you can be the bigger person and obey the TOS or you can continue to blame someone else for your violation of the TOS, its up to you.

[Nanogeek]

Pissing matches aside - it is clearly absurd for the players to propose excluding interest expense from income computations. The somewhat simple-minded position of the players is these owners have alot of money and can pick and choose where they leverage their business ventures. They may choose to use more debt leverage in their NBA franchise than they do in their manufacturing operation because their manufacturing workers do not have as much negotiating power as their NBA players do. While there may be some validity to this point, the players notion, implied or otherwise, that equity capital is free while debt capital is not is completely nonsensical. The owners have been using US GAAP financials to illustrate their profitability or lack thereof. If the players want to fuss about debt versus equity capital then the profitability of franchises should be adjusted for the weighted average cost of capital of the teams and assign a cost of equity capital as well. But simply ignoring interest expense has no conceptual basis whatsoever.


Also, JC Walters I disagree with your assertion that the objective of the salary cap is to create a level playing field and not to ensure franchise profitability. The salary cap actually contributes to both goals but by itself accomplishes neither. A salary cap can be implemented that makes most teams unprofitable and can be implemented such that teams still spend wildly different amounts on players. The current soft cap does not assist with either because it does not permit personnel costs to remain in lock step with revenues for the league as a whole and allows for some franchises to spend significantly more than others. A hard cap would not function efficiently unless there robust revenue sharing amongst the teams since otherwise some teams would be more profitable than others by definition. In any event, a level playing field is not achievable because many factors are beyond league and owner control. If Nike will pay a star $200m in NY and $50m in Memphis then its not a level playing field no matter what.

[DBoys]

it is clearly absurd for the players to propose excluding interest expense from income computations. The somewhat simple-minded position of the players is these owners have alot of money and can pick and choose where they leverage their business ventures. They may choose to use more debt leverage in their NBA franchise than they do in their manufacturing operation because their manufacturing workers do not have as much negotiating power as their NBA players do. While there may be some validity to this point, the players notion, implied or otherwise, that equity capital is free while debt capital is not is completely nonsensical. The owners have been using US GAAP financials to illustrate their profitability or lack thereof. If the players want to fuss about debt versus equity capital then the profitability of franchises should be adjusted for the weighted average cost of capital of the teams and assign a cost of equity capital as well. But simply ignoring interest expense has no conceptual basis whatsoever.

Also, JC Walters I disagree with your assertion that the objective of the salary cap is to create a level playing field and not to ensure franchise profitability. The salary cap actually contributes to both goals but by itself accomplishes neither. A salary cap can be implemented that makes most teams unprofitable and can be implemented such that teams still spend wildly different amounts on players. The current soft cap does not assist with either because it does not permit personnel costs to remain in lock step with revenues for the league as a whole and allows for some franchises to spend significantly more than others. A hard cap would not function efficiently unless there robust revenue sharing amongst the teams since otherwise some teams would be more profitable than others by definition. In any event, a level playing field is not achievable because many factors are beyond league and owner control. If Nike will pay a star $200m in NY and $50m in Memphis then its not a level playing field no matter what.

Great points.

[Agenda42]

But simply ignoring interest expense has no conceptual basis whatsoever.

On one hand, interest expense is still an expense.

On the other hand, the players do have a case that owners are doing dumb business things. The players shouldn't be held responsible for owners choosing to relocate into lousy basketball markets. The trend toward heavily leveraged acquisitions of NBA teams is a big reason why so many teams are unprofitable.

The current soft cap does not assist with either because it does not permit personnel costs to remain in lock step with revenues for the league as a whole and allows for some franchises to spend significantly more than others.

How's that? Regardless of the paper values of NBA contracts under the previous CBA, precisely 57% of BRI was shipped to players through the escrow system. That sounds pretty "in lock step with revenues" to me.

As I see it, the NBA is having difficulty with profitability because of the rapid increase in non-player expenses.

If Nike will pay a star $200m in NY and $50m in Memphis then its not a level playing field no matter what.

It's a big story. In the NFL, market size is not such a factor because every team is a national enterprise. In the NBA, most fans watch only their team until the playoffs come around. That's the driving factor for big market bias in the system, and there's no easy way to repair it.

[giberish]

The current system imposes a true hard cap on total player salaries across the NBA due to the escrow system. As noted, exactly 57% of revenue is directed to player salaries across the league.

If the NBA is in worse shape than eariler than it's due to rising non-player costs. Some of that is justifiable: Increased marketing to keep arenas full in a recession, overseas promotions, increased arena costs. Some is not: owners paying themselves and family members big $$ to run the team, sweethart deals to other companies run by the team owner, interest payments on debt because the team was bought on margin (either due to a lack of cash or for tax/accounting purposes).

A team-by-team hard cap can operate 3 ways. With strong, NFL-level or better revenue sharing, a hard cap can allow every team to spend about the same without putting any team in financial distress (unless they're run really poorly, no CBA can protect against McCourt style ownership). With the current weak revenue sharing, a cap set low enough that low-income teams can spend to it will lock in huge, permanent profits for high-revenue teams. A cap set high enough that high-revenue teams are still spending significant money on payroll will be way too high for a low-revenue team to compete with.

Right now owners can't agree on revenue sharing at all. They are trying to get the players to agree to a low hard cap as a cover.

[giberish]

One side note. Most hard cap proponents insist that more parity = higher overall fan interest.

When has the NBA been most popular? The times when there have been one or a few marquee teams to drive attention, or when there was an open field without marquee teams?

[DBoys]

The current system imposes a true hard cap on total player salaries across the NBA due to the escrow system. As noted, exactly 57% of revenue is directed to player salaries across the league.

If the NBA is in worse shape than eariler than it's due to rising non-player costs. Some of that is justifiable: Increased marketing to keep arenas full in a recession, overseas promotions, increased arena costs. Some is not: owners paying themselves and family members big $$ to run the team, sweethart deals to other companies run by the team owner, interest payments on debt because the team was bought on margin (either due to a lack of cash or for tax/accounting purposes).

A team-by-team hard cap can operate 3 ways. With strong, NFL-level or better revenue sharing, a hard cap can allow every team to spend about the same without putting any team in financial distress (unless they're run really poorly, no CBA can protect against McCourt style ownership). With the current weak revenue sharing, a cap set low enough that low-income teams can spend to it will lock in huge, permanent profits for high-revenue teams. A cap set high enough that high-revenue teams are still spending significant money on payroll will be way too high for a low-revenue team to compete with.

Right now owners can't agree on revenue sharing at all. They are trying to get the players to agree to a low hard cap as a cover.

1 I find it hard to accept the following are really at the heart of any of this
= owners paying themselves and family members big $$ to run the team
= sweethart deals to other companies run by the team owner
= interest payments on debt because the team was bought on margin

Given the fact that they have opened the books to the players, those kinds of things would be easy for the players to simply discard from the discussion. The league has said repeatedly that - despite the assumptions by those who haven't seen the books - there is no purchase amortization included in the losses. Paying family for bogus work makes no sense either, because it's by far the most inefficient way to take money out of a privately owned business for personal/family use. You wouldn't want to put them on the books because the tax man will get so much of the pay, you'd take a dividend instead.

2 "Right now owners can't agree on revenue sharing at all"

I think that's a misconception. From what I've read the owners are quite committed to implementing some significant type of rev sharing, but only want to do it amongst themselves after the league/player issues on player cost as a whole are resolved. And it's really not a player issue as to whether or not one owner subsidizes others, as long as the players themselves get the same pie either way.

3 "If the NBA is in worse shape than eariler than it's due to rising non-player costs."

I think that's the bottom line and exactly right. The fact that expenses have risen dramatically, while the players' share is calculated on pre-expense revenue, means the players' share of the net has risen dramatically. And the owners haven't had any way to escape the problem, because even if they paid less in salary to the players as costs rose, the CBA would have forced them to pay 57% anyhow.

[giberish]

The current system imposes a true hard cap on total player salaries across the NBA due to the escrow system. As noted, exactly 57% of revenue is directed to player salaries across the league.

If the NBA is in worse shape than eariler than it's due to rising non-player costs. Some of that is justifiable: Increased marketing to keep arenas full in a recession, overseas promotions, increased arena costs. Some is not: owners paying themselves and family members big $$ to run the team, sweethart deals to other companies run by the team owner, interest payments on debt because the team was bought on margin (either due to a lack of cash or for tax/accounting purposes).

A team-by-team hard cap can operate 3 ways. With strong, NFL-level or better revenue sharing, a hard cap can allow every team to spend about the same without putting any team in financial distress (unless they're run really poorly, no CBA can protect against McCourt style ownership). With the current weak revenue sharing, a cap set low enough that low-income teams can spend to it will lock in huge, permanent profits for high-revenue teams. A cap set high enough that high-revenue teams are still spending significant money on payroll will be way too high for a low-revenue team to compete with.

Right now owners can't agree on revenue sharing at all. They are trying to get the players to agree to a low hard cap as a cover.

1 I find it hard to accept the following are really at the heart of any of this
= owners paying themselves and family members big $$ to run the team
= sweethart deals to other companies run by the team owner
= interest payments on debt because the team was bought on margin

Given the fact that they have opened the books to the players, those kinds of things would be easy for the players to simply discard from the discussion. The league has said repeatedly that - despite the assumptions by those who haven't seen the books - there is no purchase amortization included in the losses. Paying family for bogus work makes no sense either, because it's by far the most inefficient way to take money out of a privately owned business for personal/family use. You wouldn't want to put them on the books because the tax man will get so much of the pay, you'd take a dividend instead.

2 "Right now owners can't agree on revenue sharing at all"

I think that's a misconception. From what I've read the owners are quite committed to implementing some significant type of rev sharing, but only want to do it amongst themselves after the league/player issues on player cost as a whole are resolved. And it's really not a player issue as to whether or not one owner subsidizes others, as long as the players themselves get the same pie either way.

3 "If the NBA is in worse shape than eariler than it's due to rising non-player costs."

I think that's the bottom line and exactly right. The fact that expenses have risen dramatically, while the players' share is calculated on pre-expense revenue, means the players' share of the net has risen dramatically. And the owners haven't had any way to escape the problem, because even if they paid less in salary to the players as costs rose, the CBA would have forced them to pay 57% anyhow.

1. Interest payments on debt is certainly a major part of it. The NBA claims $300M in losses this year, take out the $275M in interest payments on debt and it's only $25M. To some degree, this is funny buisness with accounting to make teams look less profitable. This also shows that teams are overvalued compared to their straight buisness worth due to the ego boost of owning a pro team. A team that makes financial sense to own at $200M will sell for $300M or more for ego value. If the players give back money in the CBA to make the franchise make sense at $300M it will sell for $400M+.

In addition to straight payroll, many owners and family members get very expensive perks from their teams. See the McCourt trials for over the top examples.

2. Owners could make a revenue sharing agreement at any time, they haven't and haven't come close. At best they say - wait till we break the players then we'll think about it. Most insider reports say that Stern's biggest problem is getting owners to agree with each other on revenue sharing.

3. Using net income is a problem. No hollywood movie has ever made a net profit. Using the same accountanting the net income from the NBA would be zero every year even before player salaries. There's also the general issue of how much the additional non-player expenses are from growing the buisness and how much are incompetance.

Recent income gains have come primarily through arena sales that require significant non-player salary expense from owners. The next TV deal will see a huge jump in revenue that requires minimal non-player salary expense from owners. Ideally BRI would be separated so that players get much more than half from TV deals and similar income and much less than half from arena sales and similar income.

[DBoys]

Giberish, the players have simply said "there's interest in the losses, and we don't think that should be included." The owners have said that the interest is NOT related to franchise purchases. What basis do you have for thinking that it's purchase-related interest when neither party has said that? Obviously any interest is debt related, but couldn't those specific interest payments have easily come from debt that was incurred from running operating deficits year after year?

[Laowai]

I think you should look at MLSE the majority owners of the Raptors.
Without a doubt they are the owners with the most cash but because they are owned by the Ontario Teachers Union they are run like a business. They privately financed the arena and it is money making because of the Leafs/Raptors/concerts etc. They currently are making 25 million according to Forbes with tighter accounting rules than in the USA. They will benefit greatly from a Hard Cap or a Flex Cap they will also benefit from being a responsible ownership and being in a rebuilding phase.

Teams that have overspent some wisely and some not LAL, Miami, Orlando, Dallas, Boston will be hobbled for a few years. A small market team like Memphis who over paid for Zach Randoph will be also effected.

A hard cap will spread out talent especially if it includes salary roll backs of 25% range. This is a battle of small, mid-market and NHL owners versus players and big spending clubs. Some of the contention that teams aren't profitable are a canard since if Dallas, Boston, Orlando had kept there salaries in line with the 70 million cap and not paid luxury tax they would be profitable.

While this wouldn't guarantee profitability of all teams it will eliminate the hemorrhaging of money for teams like Carolina and finding a owner for NO. The beneficiaries financially of a hard cap would be LA, NYKs, Toronto, Phoenix, Chicago, Boston who would see team values climb by the 100s of millions but also would even the field for competition for all teams.

[Nanogeek]

On one hand, interest expense is still an expense.

On the other hand, the players do have a case that owners are doing dumb business things. The players shouldn't be held responsible for owners choosing to relocate into lousy basketball markets. The trend toward heavily leveraged acquisitions of NBA teams is a big reason why so many teams are unprofitable.

However the owners choose to finance their teams is up to them. If they decide to burden them with debt then that is their choice. If the players want to protect against overleveraging they can do what the IRS does (e.g., see section 163(j) of the Internal Revenue Code) and limit the benefit of interest expense on leverage over a certain amount. And when the CBA expires as it has the owners have every right to require new terms which is what they are doing. If the players don't like the terms they can play elsewhere.

The current soft cap does not assist with either because it does not permit personnel costs to remain in lock step with revenues for the league as a whole and allows for some franchises to spend significantly more than others.

How's that? Regardless of the paper values of NBA contracts under the previous CBA, precisely 57% of BRI was shipped to players through the escrow system. That sounds pretty "in lock step with revenues" to me.

The previous CBA did not guarantee players no more or no less than 57% BRI. Due to its mechanics, players could receive no less than 57% BRI but could receive effectively more than 57% BRI. This one sided situation is a result of a limit on the amount of player salaries and benefits that was deposited into the escrow account. If player salaries and benefits were above 57% BRI by more than the maximum escrow amount and because the owners could only receive at most the entire escrow account then the players could receive more than 57% BRI. If the relationship above persisted then the amounts would not balance over time either.

[Nanogeek]

The current system imposes a true hard cap on total player salaries across the NBA due to the escrow system. As noted, exactly 57% of revenue is directed to player salaries across the league.

See above why this is not the case.

If the NBA is in worse shape than eariler than it's due to rising non-player costs. Some of that is justifiable: Increased marketing to keep arenas full in a recession, overseas promotions, increased arena costs. Some is not: owners paying themselves and family members big $$ to run the team, sweethart deals to other companies run by the team owner, interest payments on debt because the team was bought on margin (either due to a lack of cash or for tax/accounting purposes).

Players need to get smarter representation and provide rules for what owners can and can't deduct in computing BRI. Its actually very simple. Limit interest expense to a certain cap ratio (say 1.5/1 debt/equity). Limit non-player salaries to Y% of revenues or V% of player salaries, etc.

[DBoys]

Players need to get smarter representation and provide rules for what owners can and can't deduct in computing BRI. Its actually very simple. Limit interest expense to a certain cap ratio (say 1.5/1 debt/equity). Limit non-player salaries to Y% of revenues or V% of player salaries, etc.

Huh? BRI does not have deductions for such items. BRI essentially is gross income.

[Nanogeek]

Players need to get smarter representation and provide rules for what owners can and can't deduct in computing BRI. Its actually very simple. Limit interest expense to a certain cap ratio (say 1.5/1 debt/equity). Limit non-player salaries to Y% of revenues or V% of player salaries, etc.

Huh? BRI does not have deductions for such items. BRI essentially is gross income.

Yes, I am aware. But the only chance the players have of avoiding a hard cap is to change BRI to be a net income computation. However, that net income computation needs to have limits as to what owners can deduct in computing BRI so if owners want to paay non-players exorbitantly or leverage up their franchises the players are not negatively impacted.

[DBoys]

"But the only chance the players have of avoiding a hard cap is to change BRI to be a net income computation."

I understand that as a potential moving part in the negotiations, but I just don't get the linkage at all once you start using hard dollars rather than percentages.

To go one step further, I'm not sure why a hard cap should matter to the players at all. If they'll get $2 Billion (or any other specified number) altogether, if it comes from 30 teams each paying exactly $66.6667 Billion, or from teams paying random amounts that all add up to $2B, it's still the same total pay either way. So the idea that it's something for them to make noteworthy concessions to avoid just doesn't make sense to me.

[WiscoKing13]

What about keeping the current system, with a few changes.

I think their should be a small roll back of salaries, lets just say 10 percent for fun.

56 mil soft cap and a 67 mil lux tax and than something around the lines of an 80 to 85 mil hard cap.

Than something along the lines of 100 percent contracts the first two years and 33 percent the third year and final year is ungauranteed. Max contracts only 5 years and others four years.

Obviously the owners need to figure out a better revenue sharing system themselves, because the current one is completely busted and the players have a valid point.

I could see an offer like this being some type of a middle ground.