Salary Cap Rumors | Hoops Rumors

NBA, NBPA Agree To Extend CBA Termination Deadline Again

August 25th, 2020 at 1:39pm CST by Luke Adams

The NBA and the National Basketball Players Association have once again reached an agreement to push back the 60-day window giving each side the right to terminate the league’s current Collective Bargaining Agreement, reports ESPN’s Adrian Wojnarowski (via Twitter). According to Wojnarowski, October 15 is the new deadline for modifications to the CBA for 2020/21.

The NBA and NBPA first agreed to push back the Collective Bargaining Agreement termination deadline in May. The agreement gives the two sides more time to make the necessary adjustments to the CBA for the 2020/21 season to account for the impact of the coronavirus pandemic.

As Wojnarowski explains (via Twitter), an October 15 deadline will allow the NBA to complete the current season and should give the two sides a chance to make more informed decisions for the future based on the 2019/20 end-of-season revenues.

The pandemic has resulted in NBA revenue losses for this season and will affect its projected revenues going forward. However, there’s still optimism that the league and the players’ union can reach agreements on temporary changes to the Collective Bargaining Agreement and figure out next season’s salary cap without requiring the “nuclear option” of terminating the CBA, tweets Woj.

“Extending is an easy call,” NBPA executive director Michele Roberts told ESPN (Twitter link). “If everyone continues to be well-intentioned on how we deal with the economic effects of this virus, we’ll just make the appropriate adjustments and there won’t be a need to terminate the CBA at all.”

While the 2020/21 season presents a number of logistical and financial challenges on its own, teams will also hope to get some clarity this fall on what the salary cap might look like in 2021/22, ESPN’s Bobby Marks notes (via Twitter). The Jazz, for example, will have the opportunity to extend Rudy Gobert this offseason, but a new deal for him would go into effect in ’21/22 and his first-year salary would likely be based on a percentage of the cap.

NBPA Preparing For Possible Delay Of Free Agency Start Date

August 20th, 2020 at 2:35pm CST by Luke Adams

The National Basketball Players Association is preparing players for the possibility that the start of the 2020 free agency period will be postponed by several weeks, according to ESPN’s Adrian Wojnarowski.

As Wojnarowski explains, the coronavirus pandemic has resulted in major uncertainty about the league’s projected revenues for the 2020/21 season. Delaying the October 18 free agency start date would give both the NBA and NBPA more time to formulate the parameters of the 2020/21 salary cap and luxury tax lines.

The NBA previously projected a $115MM salary cap and a $139MM tax threshold for the ’20/21 season. However, that projection was released in January and hasn’t been updated in recent months to account for the pandemic, which has had a huge financial impact on the league.

According to Wojnarowski, with the October 16 draft fast approaching, front offices around the NBA are concerned about the lack of updated cap and tax projections in place, since those estimates allow teams to make roster decisions with a clearer sense of the financial ramifications.

Before finalizing its projections, the league will likely want to wait as long as possible to determine whether fans can safely be allowed to return to arenas next season. As Woj notes, the NBA may also deviate from its usual formula to determine next year’s salary cap, artificially smoothing it to avoid a significant drop based on lost revenues. The NBA and NBPA continue to collectively bargain those issues.

The NBA’s tentative offseason schedule would allow free agents to begin negotiating with teams at 5:00 pm central time on October 18, just two days after the draft. The new league year is officially scheduled to begin on October 19.

However, that calendar was created when it looked as if next season would begin as early as December 1. If the start of the ’20/21 regular season is pushed back, there may not be as much urgency to open free agency that soon. According to Wojnarowski, the NBPA has been privately suggesting to players that the season could start sometime in late December or in the new year.

Although Wojnarowski’s report suggests that free agency seems more likely than not to be delayed, it’s not clear whether this year’s draft date will be affected. According to Woj, many teams have interest in connecting the draft and free agency and postponing them together.

Financial, Logistical Uncertainty Looms Over 2020/21 NBA Season

July 10th, 2020 at 5:05pm CST by Luke Adams

Now that the NBA has finalized its plan for the summer restart and teams have reported to Orlando, we have a pretty clear idea of what the rest of the 2019/20 season will look like, assuming it can be completed. However, uncertainty looms over the ’20/21 campaign, which doesn’t yet have an official start date.

According to Alex Silverman of Morning Consult, the NBA’s Global Innovation Group recently sent out an internal planning document outlining four possible scenarios for the 2020/21 season. Three of the proposed scenarios would feature a December start date and a July end date, but the fourth would see the season start in March 2021 and run through October, Silverman writes.

As Silverman explains, that fourth scenario is one that could be considered if there’s a pathway in early 2021 to a coronavirus vaccine or therapeutic treatment for COVID-19 that would allow teams to host fans in their home arenas for a full season. Under that proposal, the league would consider breaking for the Tokyo Olympics in the summer and would execute a “rolling schedule” rather than releasing the full-season schedule at once, Silverman writes.

It seems more likely that the NBA will opt for one of the December-to-July scenarios (the league has tentatively proposed a December 1 start date), but that will mean making contingency plans and preparing for a wide variety of complications related to the state of the coronavirus pandemic across North America.

According to Silverman, the NBA may still have to consider rolling schedule releases if the season starts in December, as well as “increasing game density, building in buffers for canceled or rescheduled games, and potentially using alternate sites like neutral markets or practice and G League facilities.” Regionally restricting matchups to reduce travel is also a possibility, Silverman adds.

Determining how to safely play in a world with the coronavirus will be a crucial question for the NBA to answer as it weighs its options for next season, but there are other important factors to consider, per Brian Windhorst and Tim Bontemps of ESPN. Notably, the NBA’s owners and players will have to agree to a deal on how to financially operate, and 30 teams facing different restrictions and market conditions will have to figure out the best way to share revenues.

As Windhorst and Bontemps explain, the NBA salvaged its lucrative television deals in 2019/20 and had played about 75% of its regular season before the coronavirus pandemic forced a stoppage, so the financial losses were significant but not debilitating.

During the 2020/21 season, however, teams might not be able to fill their arenas with fans at all from opening night through the playoffs, which would significantly cut into the league’s earnings — commissioner Adam Silver has estimated that about 40% of the NBA’s revenues come from ticket sales and other arena-related revenues.

“The truth is, things are changing so fast that, when it comes to next season, the best we can do is put a stake in the ground and make a guess,” an Eastern Conference team president told ESPN. “The reality is nobody is probably going to operate in the black next season. The only question is how much each of us are going to lose.”

According to Windhorst and Bontemps, the league’s financial situation will become even cloudier if – due to local health restrictions and regulations – some teams can’t get fans into their arenas while others can. In a typical season, massive revenues for teams like the Lakers and Warriors help support smaller-market clubs. But if those smaller-market teams can host fans while big-market teams can’t, “traditional revenue sharing becomes distorted,” Windhorst and Bontemps write.

Sources tell ESPN that NBA deputy commissioner Mark Tatum recently told team presidents that the league’s plan for now is to allow local governments to regulate crowds at games. That means franchises around the NBA could be at the mercy of the policy views of local governors and mayors.

The salary cap for the 2020/21 season will be another important detail to resolve. While there’s a widespread desire to artificially smooth the cap based on this year’s $109MM rather than allowing a substantial dip, that will require negotiations between owners and players. Additionally, as Windhorst and Bontemps note, since owners and players share the NBA’s revenues, there will have to be some sort of system in place to ensure a split near 50/50 is maintained, even as revenues decrease.

According to the ESPN duo, one option would be to increase the amount of players’ salaries that are held in escrow from 10% to 20%. Another option would be for the excess player salaries needed to balance the revenue split to be offset in future seasons.

“In one case, the owners want a loan from the players. And in the other case, the players want a loan from the owners,” one agent told ESPN. “It will probably end up somewhere in the middle and it will get done after some yelling and posturing.”

The NBA put in a ton of work to establish a plan to end the 2019/20 season — much more work will be required to figure out what next season will look like.

Photo courtesy of USA Today Sports Images.

And-Ones: LaMelo, BBL, Salary Cap, Penny

May 21st, 2020 at 9:18pm CST by Alex Kirschenbaum

The Illawarra Hawks of Australia’s NBL were unready for the enormous impact inking LaMelo Ball to a contract had on the 2019/20 season, according to ESPN’s Kane Pitman. “It was weird because you had ‘Melo who was like a rock star and just followed so heavily online and with the social media stuff it made it interesting,” Ball’s teammate David Andersen told Pitman.

In just 12 games, Ball won the NBL’s Rookie of the Year award sporting a slash sheet of 17 PPG/7.5 RPG/7 APG. The 18-year-old younger brother of Pelicans guard Lonzo Ball is expected to be a top-five pick in the forthcoming NBA draft.

There’s more from around the basketball world:

Germany’s Basketball Bundesliga will resume play, after pausing the league due to the coronavirus pandemic, with a three-week final tournament commencing June 6, per Dario Skerletic of Sportando.
An adjusted salary cap would affect each of the NBA’s teams in a variety of ways, as John Hollinger of The Athletic details. Though the 2020/21 cap was projected at $115MM per team in February, that number was predicted prior to the coronavirus pandemic and will almost certainly end up being lower.
Memphis Tigers coach Anfernee “Penny” Hardaway opined to ESPN’s The Jump that the G League’s recent recruitment of players straight out of high school will greatly impact college recruitment, including his program, according to ESPN News Services. “It’s going to have a huge impact, because it’s just a recruiting war right now when it comes to that,” Hardaway said. “But I think it’s going to affect us because we’re recruiting a bunch of five-stars.”

NBA, NBPA Extend CBA Termination Deadline

May 11th, 2020 at 10:41am CST by Luke Adams

The NBA and the NBPA have reached an agreement to extend the window during which the league can terminate the Collective Bargaining Agreement, reports ESPN’s Adrian Wojnarowski. The previous 60-day period, which began when the season was suspended on March 11, had been set to expire. The deadline will be pushed back to September, according to Wojnarowski.

It may sound ominous that the NBA will continue to have the ability to “terminate” the CBA, but it’s more of a necessary formality at this point. The “force majeure” provision gives the league that power, but the NBA has no interest in taking advantage of it for now, since both the league and the players’ union want to resume the 2019/20 season in the coming months.

In order for that to happen, the Collective Bargaining Agreement will need to be restructured, so delaying this deadline gives the two sides more time to gather information on the league’s projected financial losses and to work through issues like next season’s salary cap and luxury tax thresholds, as Woj explains. When the time comes, the NBA and the NBPA figure to work together to negotiate the necessary adjustments to the CBA.

“This CBA was not built for an extended pandemic,” Silver said on Friday’s conference call with players, per ESPN. “There’s not a mechanism in it that works to properly accept a cap when you’ve got so much uncertainty; when we’d be going in next season saying, “Well, our revenue could be $10 billion or it could be $6 billion. Or maybe it could be less.”

Besides figuring out salary cap details going forward, the league and the players’ union will have to negotiate a number of other issues, including how the players will be paid for whatever portion of the 2019/20 season can be played, how free agency will work, and what the NBA schedule will look like in 2020/21 and beyond.

NBA Salary Cap Not Expected To Drop Significantly

April 7th, 2020 at 7:02pm CST by ChrisCrouse

The COVID-19 crisis continues to impact the world both from a health and financial perspective, and the NBA is no exception. While there is fear that the pandemic, which has already cost the NBA an exorbitant amount of money, will cause the league’s salary cap to drop significantly in 2020/21, that may not be the case. Ian Begley of SNY.tv reports that the salary cap shouldn’t see a steep decline from the most recent projection of $115MM.

The National Basketball Players Association has told agents to expect a drop in Basketball Related Income for 2021. While BRI is used to calculate the salary cap, Begley adds that the salary cap is expected to be calculated fairly and won’t plummet because of a one-year outlier, assuming “things unfold as expected.”

The NBA is weeks away from making a decision on the remainder of the 2019/20 season, as commissioner Adam Silver recently announced. While the league surely wants to play out the rest of the season, it doesn’t want to delay this year to the point where it significantly impacts the 2020/21 campaign.

Categories:
Salary Cap

ESPN’s Doris Burke Recovering From Coronavirus

March 27th, 2020 at 2:42pm CST by Luke Adams

Appearing on the latest episode of The Woj Pod with Adrian Wojnarowski, ESPN’s Doris Burke said that she tested positive for the coronavirus.

Burke described feeling her first symptoms on March 11, the day she worked the Mavericks/Nuggets game that ended up being the final NBA contest before the season was postponed indefinitely. The ESPN analyst, who said she experienced extreme fatigue for several days after that, was tested last week and got the results earlier this week.

Speaking with Wojnarowski about her experience, Burke confirmed she is now symptom-free and is feeling like herself again, which is great to hear.

Here’s more on the coronavirus and the NBA’s hiatus:

David Aldridge of The Athletic is the latest NBA writer to put forth a proposal for how the league might structure a resumed season. Aldridge’s series of ideas includes a mini-tournament that would help determine which lottery teams get the highest picks.
Major sporting events that feature tens of thousands of fans are candidates to become “biological bombs,” according to Gabe Lacques and Jeff Zillgitt of USA Today, who explain how the NBA and others sports leagues will look to avoid that scenario when they resume.
Joe Vardon of The Athletic takes an in-depth look at how the coronavirus pandemic has complicated the contracts between the major sports leagues and the TV networks that broadcast their games.
For those interested in how the NBA’s hiatus may affect its salary cap going forward, cap guru Albert Nahmad has updated his exploration of the subject at HeatHoops.com, digging into many of the variables at play and explaining why it’s so tricky to make any projections yet.

Categories:
COVID-19
Salary Cap

Ripple Effect Of Hiatus On Contracts, Cap, Offseason Dates

March 18th, 2020 at 10:02am CST by Luke Adams

Given the typically rigid nature of the NBA’s annual calendar, the current hiatus threatens to complicate a number of dates and deadlines that will arrive in the coming months. In his latest Insider-only article for ESPN.com, Bobby Marks takes a closer look at how those dates – linked to contracts and the salary cap – may be impacted, noting that the NBA and NBPA are expected to collectively bargain a set of transition rules once the league establishes a return timeline.

For instance, there are 29 player options and 12 team options that are currently scheduled to be exercised or declined before the end of June. Those dates will almost certainly have to be adjusted. The same goes for certain salary guarantee dates and the expiry dates on traded player exceptions, as Marks explains. Of course, the start of the 2020/21 league year will have to be pushed back too, so players with expiring contracts don’t become free agents on July 1.

Contract incentives will also be an issue worth keeping an eye on. Marks observes that during the lockout-shortened 2011/12 season, players’ incentives were prorated based on the fact that the league played 66 games instead of 82 games. The NBA could take similar measures this season. For instance, if a player needs to play 1,000 minutes to earn a bonus and his team ends up playing just 70 of 82 games, his incentive requirement would be adjusted so he only needs to play 70/82nds of 1,000 minutes (854 minutes).

Marks’ article is jam-packed with interesting info and is worth checking out in full if you have an Insider subscription. Here are a few more highlights:

Although the NBA’s basketball related income for 2019/20 is projected to take a huge hit as a result of this hiatus and the controversy with China in the fall, it’s too early to say what that will mean for the 2020/21 salary cap, according to Marks. In situations like this, the NBA and NBPA generally negotiate in good faith a cap adjustment that satisfies both sides, so we’re unlikely to see a big drop-off next year.
Still, with the cap for the next year or two no longer expected to increase by nearly as much as the NBA initially projected, the ripple effect could be significant. Maximum-salary contract extensions scheduled to go into effect next season or in 2021/22 for players like Jamal Murray, Ben Simmons, Pascal Siakam, and Damian Lillard won’t be as lucrative as previously estimated, and teams will no longer have as much cap or tax flexibility as expected. As Marks points out, that could influence players with option decisions — they may be more inclined to opt in for ’20/21, with less leaguewide spending power available in the offseason.
Resuming the regular season – rather than just jumping straight to the playoffs – may not be a top priority for many fans, but there are reasons why the NBA won’t want to skip that step, Marks writes. Teams that wanted to make roster moves prior to the postseason wouldn’t get a chance to do so if the NBA moves straight from its current moratorium to the playoffs. For example, in that scenario, the Thunder wouldn’t get the opportunity to convert two-way player Luguentz Dort to their 15-man roster. As such, the NBA may want to play a few regular season games or at least give teams a few days to make necessary roster moves.

Team Owners Await Financial Projections From NBA

March 16th, 2020 at 8:22am CST by Luke Adams

NBA team owners are waiting for the league to provide them with new financial projections on lost revenues as a result of the coronavirus-related hiatus, sources tell ESPN’s Adrian Wojnarowski. As Wojnarowski explains, NBA chief financial officer J.B. Lockhart has taken the lead on making those estimates and sharing the information with owners.

[RELATED: NBA Hiatus May Extend Into June]

Tom Haberstroh of NBC Sports and Bobby Marks of ESPN are among those who recently estimated that losing the remainder of the regular season and some or all of the postseason could cost the NBA upwards of $500MM+ in basketball related income. While the league has yet to publicize its own projections, it’s safe to say teams around the NBA are bracing for major losses.

According to Wojnarowski, the NBA will likely share a handful of projections with teams based on at least three different scenarios. Those scenarios are as follows:

Shutting down the season entirely.
Resuming the season with no fans in arenas.
Resuming and playing postseason games with fans in attendance.

That lost revenue isn’t the most pressing concern for fans, but we’ll likely see its impact going forward on the salary cap. As recently as last June, the NBA was calling for a $117MM cap for the 2020/21 season, up from approximately $109MM in 2019/20. Given the projected earnings the league will lose as a result of this hiatus and its controversy with China earlier in the season, that estimate is no longer realistic.

Categories:
COVID-19
Salary Cap

Hiatus Notes: Revenue, G League, Warriors, Kings

March 13th, 2020 at 8:15pm CST by Dana Gauruder

The league could lose nearly $500MM in ticket revenue if the remainder of the season is not played out, Tom Haberstroh of NBC Sports Philadelphia estimates. Using an unnamed high-ranking league official as a source, Haberstroh relays that the NBA makes an average of $1.2MM in gate revenue per regular season game and $2MM for each playoff game. There were 259 regular-season games remaining, a loss of approximately $300MM in ticket revenue. With 83 postseason games played on average, the league would lose $166MM in postseason revenue.

The loss of basketball-related income could actually total near the $500MM for the regular season alone, according to ESPN’s Bobby Marks. That would directly affect the salary cap and luxury tax for next season. However, a resumption of the season with fans in attendance could mitigate and eliminate those potential financial losses, Marks adds.

We have more regarding the suspension of NBA games:

G League players will be paid as contracted and receive benefits, league expert Adam Johnson tweets. The remainder of the NBAGL season has already been suspended, with Johnson suggesting it may be canceled entirely. The G League’s regular season had been scheduled to end on March 28, with the postseason to follow.
Warriors staffers will work from home for at least the next two weeks, Nick Friedell of ESPN tweets. Their players will be allowed to work out individually inside the team’s facility but it’s not a requirement.
The Kings have suspended all team activities through Monday, according to a team press release. The players will remain in the Sacramento area but will not participate in group workouts or practices. No Kings players have experienced symptoms of COVID-19.