Windhorst: "players have no idea about the capwave that's about to hit them"

[hippesthippo]

How do Sweden, Belarus and the non locked down countries look ?

Even if it was doing untold damage, societies cant afford it

You mean we can’t continue to print our way out of this crisis? /s

The average person isn't even aware of how close we are to hyperinflation or how much money has been printed in the last 6 months.

Fears of a debt related hyper-inflation have been overblown for decades. National debt skyrocketed into the trillions and we never saw it. It didn't happen during WW2 and it didn't happen after the 08 recession.

Sure, eventually a tipping point will come, but we really don't know where that point is. Right now stimulus is needed to float the economy and keep it from collapsing. It really isn't that big of a deal.

The NBA isn't any different. Owners and players alike will have to eat some dough and artificially float the cap a bit. That doesn't mean anyone has to bend over backwards to keep it on an upward trajectory, just enough to keep things from falling apart.

If the NBA keeps the cap in the $105-110m range for a couple years and slowly brings it back up relative to revenue things will be fine.

A percentage of player salaries are kept in escrow. Some owners may end up paying more in luxury tax than they anticipated. *Free agent contracts will be suppressed. Franchises may have to borrow to make payroll [nobody is going to be crying for Fertita]. Life will go on and so will the NBA.

*If players don't understand this then their agents aren't doing their job.

[Ryoga Hibiki]

they will likely keep the cap at the same level and negotiate a 25-30% escrow tax from the players.

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[Warriorfan]

I'm sure a couple of teams will finish under cap for the 1st time. Warriors LA teams and Mil only teams in the luxury.

[6ixSideSniper]

It always confused me why players didn’t sign percentage contracts as opposed to dollar amounts. It makes much more sense, especially in a league with a cap.

[puppa bear]

It always confused me why players didn’t sign percentage contracts as opposed to dollar amounts. It makes much more sense, especially in a league with a cap.

Even more so when the maximum salaries and other elements are tied directly to the cap itself as percentages.

It would simplify so many things, and likely end up putting more money in the pocket of players, especially the middle class of the NBA. Max players may be the losers in this model, especially in a downturn like right now. But they stand to be the biggest winners in a cap boom.

A max players who’s qualified to earn a contract valued at 30% of the cap should sign a contract for 30% of the cap. If the cap goes through the roof due to the league trending upwards: they make more money. If the league falls on hard times due to people no longer caring: they earn less.

[tbhawksfan1]

I think that the financial impact of Covid on the NBA will actually be much worse next season. The league wants to start about mid Jan. Covid projections are big increase in cases through the winter.

NBA had a big part of the season last year in the bag. Brought 22 teams into the bubble to finish a few games, then bubbled the playoffs. Huge financial blow losing the fans for the final quarter or so of the RS and through the playoffs.

If the 21 season starts mid Jan, with a worsening Covid, compared to now, there will be no fans. How much of the season will be played without fans? The financial implications of what has already been lost, plus what's going to happen this winter, plus the bad ratings thing is a financial hit that is going to have a dramatic effect over a long period of time.

I believe that we're going to see a dramatic impact that will affect the league for years and even if / when the Covid thing is finished, things will forever be different going forward

[Trey24]

Ol Bratwurst typically calls it wrong, so we will see what happens. I don't think the NBA would be doing themselves proper service by dropping the cap that drastically YoY. It needs to drop gradually over a few years or it would cause too big of a ripple in many different areas.

[Richard4444]

I'm sure a couple of teams will finish under cap for the 1st time. Warriors LA teams and Mil only teams in the luxury.

Boston and Nets will be in the luxury too.

I dont know what the Sixers will do. They already have an around 150M payroll and they are not a contender or big market team.

If it is financially sustainable, I think Houston will keep in the luxury line. At least they are competitive. They will have to rely on minimum salary players to improve their depth.

Indiana, Sacramento (with Bogdan re-sign and 12th), San Antonio (with Poetl re-sign), Orlando, Wolves (with Malik, Juancho re-sign, and #1 and #16) are projecting payroll near the luxury line (120M+) and they are far from being contenders. They may have to cut salary.

Utah (after re-sign Clarkson) and Denver (after re-sign Grant, Bol-Bol and a Reserve Center) are projected to spend around the luxury line (130M). They are contenders but small market teams. What a pity if they have to cut salary...

[ILikeLollies]

You mean we can’t continue to print our way out of this crisis? /s

The average person isn't even aware of how close we are to hyperinflation or how much money has been printed in the last 6 months.

Fears of a debt related hyper-inflation have been overblown for decades. National debt skyrocketed into the trillions and we never saw it. It didn't happen during WW2 and it didn't happen after the 08 recession.

Sure, eventually a tipping point will come, but we really don't know where that point is. Right now stimulus is needed to float the economy and keep it from collapsing. It really isn't that big of a deal.

The NBA isn't any different. Owners and players alike will have to eat some dough and artificially float the cap a bit. That doesn't mean anyone has to bend over backwards to keep it on an upward trajectory, just enough to keep things from falling apart.

If the NBA keeps the cap in the $105-110m range for a couple years and slowly brings it back up relative to revenue things will be fine.

A percentage of player salaries are kept in escrow. Some owners may end up paying more in luxury tax than they anticipated. *Free agent contracts will be suppressed. Franchises may have to borrow to make payroll [nobody is going to be crying for Fertita]. Life will go on and so will the NBA.

*If players don't understand this then their agents aren't doing their job.

Any sovereign nation that controls its own currency can effectively print money whenever it needs it without fears of inflation. There is no reason schools, hospitals or public utilities should be in decay or underfunded.

The threat of deficits has become a powerful tool in elections though to scare the populace into voting one way or the other.

[R-DAWG]

Here are my predictions for this..

1. The cap will kept at artificially high levels for the next two years. Since arena revenue is 40% of total and players get 50% of that, this will be done by increasing escrow from 10% to 30%. But more than that, to maximize the contract values signed this offseason and next, players will agree to a 35% escrow so that the 2021,2022 cap can be set in line with previous projections of 115 and 125 million respectively. This also allows a large number of teams to avoid paying luxury tax after planning for those numbers. Essentially players will be agreeing to a temporary paycut but trying to maintain longterm contract values.

2. While players don't want to return to bubbles, I predict that at least for the first half of next season, there will be bubbles in markets with no state tax to maximize player earning(and of course b/c of covid), but they will be shorter in duration. Teams will have a schedule of like 6 weeks in bubble, 2 weeks off rather than one super long bubble. The teams being bubbled at a given time will rotate in such a way that play is continuous.

I think your point about short term regional bubbles is likely a workable solution. Baseball turned out ok after a few outbreaks and football has had it's issues with flare ups. But remember an NBA roster is about 40% of a baseball roster and 25% of the football roster, so with less people there is a smaller chance for a flare up.

Your concept of the rotating bubble is interesting, and I could see something even shorter, like 2 weeks in a bubble of 6 teams and then 1 week off, then into a new bubble for 2 weeks, ect.

In my opinion, the best solution would be a 65-70 game season that starts on Jan 18 (MLK day) with the playoffs starting on Memorial Day weekend and ending by the end of July. That calendar would allow the league to get back to a more normal schedule of October to June for 2021-2022.

[nedleeds]

Westbricks $45 million against a $90 million cap. Lol. Another amnesty is coming for these supermax franchise killers.

[Zeno]

Here are my predictions for this..

1. The cap will kept at artificially high levels for the next two years. Since arena revenue is 40% of total and players get 50% of that, this will be done by increasing escrow from 10% to 30%. But more than that, to maximize the contract values signed this offseason and next, players will agree to a 35% escrow so that the 2021,2022 cap can be set in line with previous projections of 115 and 125 million respectively. This also allows a large number of teams to avoid paying luxury tax after planning for those numbers. Essentially players will be agreeing to a temporary paycut but trying to maintain longterm contract values.

2. While players don't want to return to bubbles, I predict that at least for the first half of next season, there will be bubbles in markets with no state tax to maximize player earning(and of course b/c of covid), but they will be shorter in duration. Teams will have a schedule of like 6 weeks in bubble, 2 weeks off rather than one super long bubble. The teams being bubbled at a given time will rotate in such a way that play is continuous.

I think your point about short term regional bubbles is likely a workable solution. Baseball turned out ok after a few outbreaks and football has had it's issues with flare ups. But remember an NBA roster is about 40% of a baseball roster and 25% of the football roster, so with less people there is a smaller chance for a flare up.

Your concept of the rotating bubble is interesting, and I could see something even shorter, like 2 weeks in a bubble of 6 teams and then 1 week off, then into a new bubble for 2 weeks, ect.

In my opinion, the best solution would be a 65-70 game season that starts on Jan 18 (MLK day) with the playoffs starting on Memorial Day weekend and ending by the end of July. That calendar would allow the league to get back to a more normal schedule of October to June for 2021-2022.

Yeah, I guess the bubbles could be shorter duration, but my thinking was that to maximize safety they would need to maintain daily testing for players When outside bubbles and have them isolate for 4 days upon return to each bubble environment. Maybe 4 weeks in, one week out at a time makes sense. In the end my idea was also to utilize areas with lower taxes to help the players more easily swallow the basically 30% paycut.

[jpengland]

It always confused me why players didn’t sign percentage contracts as opposed to dollar amounts. It makes much more sense, especially in a league with a cap.

This. Sign players to percentage of cap. Allows clarity over projected cap space, protects players from being screwed by cap raises and nae s contracts super straightforward.

[jimmy keys]

You mean we can’t continue to print our way out of this crisis? /s

The average person isn't even aware of how close we are to hyperinflation or how much money has been printed in the last 6 months.

Fears of a debt related hyper-inflation have been overblown for decades. National debt skyrocketed into the trillions and we never saw it. It didn't happen during WW2 and it didn't happen after the 08 recession.

Sure, eventually a tipping point will come, but we really don't know where that point is. Right now stimulus is needed to float the economy and keep it from collapsing. It really isn't that big of a deal.

The NBA isn't any different. Owners and players alike will have to eat some dough and artificially float the cap a bit. That doesn't mean anyone has to bend over backwards to keep it on an upward trajectory, just enough to keep things from falling apart.

If the NBA keeps the cap in the $105-110m range for a couple years and slowly brings it back up relative to revenue things will be fine.

A percentage of player salaries are kept in escrow. Some owners may end up paying more in luxury tax than they anticipated. *Free agent contracts will be suppressed. Franchises may have to borrow to make payroll [nobody is going to be crying for Fertita]. Life will go on and so will the NBA.

*If players don't understand this then their agents aren't doing their job.

You make some valid points, but that doesn't change the fact that 22% of all USD ever printed was printed in 2020 and the year isn't over yet. I don't think the USD will hyper-inflate (I hope not at least), but the Fed is devaluing the $ at an unprecedented rate and that is, despite what you think, a very big deal. Think about that a national currency with 200 year history just created 22% of the total supply in one year. I get you need to artificially prop up the economy, but this is pretty alarming. You're just praying at this point it will all work itself out. I hope you're right.

[meekrab]

It always confused me why players didn’t sign percentage contracts as opposed to dollar amounts. It makes much more sense, especially in a league with a cap.

The players get income security, the teams get cap loopholes.

[RB34]

All of a sudden fans are important

[R-DAWG]

Here are my predictions for this..

1. The cap will kept at artificially high levels for the next two years. Since arena revenue is 40% of total and players get 50% of that, this will be done by increasing escrow from 10% to 30%. But more than that, to maximize the contract values signed this offseason and next, players will agree to a 35% escrow so that the 2021,2022 cap can be set in line with previous projections of 115 and 125 million respectively. This also allows a large number of teams to avoid paying luxury tax after planning for those numbers. Essentially players will be agreeing to a temporary paycut but trying to maintain longterm contract values.

2. While players don't want to return to bubbles, I predict that at least for the first half of next season, there will be bubbles in markets with no state tax to maximize player earning(and of course b/c of covid), but they will be shorter in duration. Teams will have a schedule of like 6 weeks in bubble, 2 weeks off rather than one super long bubble. The teams being bubbled at a given time will rotate in such a way that play is continuous.

I think your point about short term regional bubbles is likely a workable solution. Baseball turned out ok after a few outbreaks and football has had it's issues with flare ups. But remember an NBA roster is about 40% of a baseball roster and 25% of the football roster, so with less people there is a smaller chance for a flare up.

Your concept of the rotating bubble is interesting, and I could see something even shorter, like 2 weeks in a bubble of 6 teams and then 1 week off, then into a new bubble for 2 weeks, ect.

In my opinion, the best solution would be a 65-70 game season that starts on Jan 18 (MLK day) with the playoffs starting on Memorial Day weekend and ending by the end of July. That calendar would allow the league to get back to a more normal schedule of October to June for 2021-2022.

Yeah, I guess the bubbles could be shorter duration, but my thinking was that to maximize safety they would need to maintain daily testing for players When outside bubbles and have them isolate for 4 days upon return to each bubble environment. Maybe 4 weeks in, one week out at a time makes sense. In the end my idea was also to utilize areas with lower taxes to help the players more easily swallow the basically 30% paycut.

I can also see them rolling with the same strategy that baseball and football are using - games in home markets with daily testing. Sure, this isn't as safe and you will have some flare ups, similar to what baseball and football have experienced. Then, back into a bubble environment for the playoffs, if necessary. Different states will have different timelines for allowing limited capacity fans into arenas.

I appreciate that the players want to able to live in their own homes, and see their families and close friends.

[CptCrunch]

CBA question here: when a player signs a max contract, are they being paid a certain percentage of the cap, or are they being paid a monetary number already predetermined upon contract signing?

Seems to me certain contracts tied to the cap (rookie contracts, max contracts etc) are not a problem for teams to deal with; it’s the contracts that are sums of money that don’t shift relative to the cap that are a concern.

They are guaranteed a fixed amount calculated at the time during which the future cap numbers are released. The subsequent years are based on the cap of the first year of that new contract.

Yes, the class of 2017 (Tatum, Bam, Domi) is about to get ****. Their max will depend on next year's reduced cap.

[Zeno]

Apologies for not reading the thread, but:

All the recent reporting has said the cap will stay artificially flat and the players just won't get all that money, via an escrow mechanism. Why, after all that, did Windhorst come out with this contrary take?

Most here don't seem to understand escrow and are just responding to the OP or the thread title alone but if you listen to the podcast itself, Windhorst isn't coming out with a contrary take at all. He actually says exactly the same things he has been saying...that escrow will likely go up to 30% in order to artificially keep the cap high. His point is that he thinks most players don't fully understand the squeeze they are facing from this and are in for a shock.

[jbk1234]

The only way the owners are going to agree to keep the cap where it's at is if players agree to a considerably larger holdback and that's going to create a serious tension within the union.

Let's say the owners say okay, we'll keep the cap at $109M, but the holdback needs to go up from 10% to 25-30%. Now, if you're unsigned, or you're going to be a FA next summer, that sounds great. But if you're LBJ or CP3, the two top officers in the union, you're being asked to give up a huge chunk of money because the NBA isn't going to make up that lost revenue, and the money held back is gone.

The talk about delaying the season further doesn't strike me as terribly serious. Unless you're talking skipping a season, come pay to attend super spreader events, indoors, before a vaccine is developed and widely distributed, isn't a serious business model.

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