Party Like it’s 2016 NBA Free Agency

If you’re a fan of the NBA, at this point, you’ve probably heard something about the Great Salary Cap Leap of 2016. That’s when the league’s new TV rights deal will kick in, which means a bump in television revenue to the tune of $1.74 billion dollars. Since the players are due 51 percent of whatever basketball-related income the league sees, that means their piece of the pie (i.e. the team salary cap) should go way up. Wayyyy up.

Once the ink dried on the new TV deal last fall, however, the league tried to resist this one-time sudden impact on the cap, proposing an alternative plan dubbed “cap-smoothing,” in which the cap would increase more than usual over the course of multiple years. In essence, this would spread the players’ share out over a longer period of time than one summer in order to maintain competitive balance and spread the wealth outside of the 2016 summer.

On Wednesday, the Player’s Union officially rejected the NBA’s “cap-smoothing” proposal, which means the salary cap will indeed leap up in 2016, which means things are gonna get crazy.

How crazy? Crazy like, LeBron James and Kevin Durant will headline what should be a bonkers free-agent class, as many players (like James) signed contracts with this jump in the salary cap in mind. They’ll be rewarded handsomely, as most experts anticipate the salary cap to skyrocket to around $90 million that summer, an almost 50-percent increase from this year’s $63-million cap, leaving most teams with at least an extra $25 million to spend. That’s a lot of money.

Obviously, big-time stars like James and Durant will be the main beneficiaries of this jump, as max contracts are always percentage-based deals, so those will increase accordingly with the salary cap. For example, a veteran with 7-9 years of experience, like Durant, could command up to 30 percent of his team’s total salary in a maximum free-agent contract, which would mean salaries of $30 million or more for such players if the cap does hit $90 million or more.

Basically, any player sniffing a max contract in 2016 will benefit greatly from this, including potential restricted free agents like Anthony Davis or Andre Drummond, whose incumbent teams will be able to match any offer sheet from another team, but thanks to the jump, will also have more competition for RFA’s services than a typical offseason.

The players have obviously been aware of the huge impact this deal will have; LeBron’s two-year contract with the Cavs was evidence enough of that alone. In that sense, the NBA was fighting a losing battle here with its cap-smoothing proposal, since suggesting that employees wait to receive their cut of money that owners are already enjoying is a tough stance to sell in any negotiation. NBPA executive director Michele Roberts’s rhetoric from All-Star Weekend is a telling depiction of the players’ point of view (via ESPN.com):

“The proposal that the league submitted … would artificially deflate the salary cap,” she said. “And that, of course, meant that players’ salaries would not increase as much as they would otherwise were it not for smoothing. That pretty much was what killed it. It killed it in the eyes of the economists that made the recommendations, and it killed it in the eyes of the players.”

This idea was a hard sell, and it’s easy to see why star players especially were uninterested in spreading the wealth over the course of several years, plural.

The unanimous decision to reject caught some people by surprise, though, including NBA salary cap expert Larry Coon, who expounded on that surprise in a series of tweets that also articulate the best argument in favor of the league’s cap-smoothing proposal:

Coon makes a great point about how this could negatively affect the league’s middle class. While it’s impossible to predict exactly how teams will spend their 2016 bonus cap space, given the caliber of the free-agent class, most teams are expected to join in on the gold rush, and if that proves true, what does it mean for the free-agent market in 2017 or 2018? Sure, star players are going to get their maxes; teams will always make room for them. But how long will it take to determine the market value of middle-class role players?

It’s a real possibility that those guys will have to wait out the duration of this first batch of mega-deals handed out in 2016 before teams can really evaluate how much to pay the fifth- or sixth-most-important member of a team. The length of those contracts could last at least as long as the NBA’s cap-smoothing timeline, perhaps even longer. At least in the world of cap-smoothing, free agents in subsequent summers would’ve been guaranteed the opportunity to enjoy a similar influx of revenue and a correspondingly larger cap.

Obviously, that will now be a moot point, and the thinking in the vote is probably along the lines of, “there will be enough money to go around.” The game has changed a ton even in the last five years, and we’ve increasingly learned about the value of not just certain players, but certain skills, like rim protection or lethal three-point shooting, even in niche players, so who’s to say that’s not true?

After the decision to take the giant leap in 2016, we won’t know, not until the league has enjoyed a couple more years under the new cap, at least. It’s very interesting that this deal––great for the stars, seemingly not so for the “rank-and-file” players––has largely been engineered by a Player’s Union headed by president Chris Paul and vice-president James, two of the league’s biggest stars, and it certainly seems to increase the chances of a lockout in 2017, as all this money could have the players eyeing a return closer to their former 57 percent BRI share, and maybe a fairer way to allocate it.

One thing is for sure, however: the summer of 2016 is going to be crazy. The league’s two best players are set to become free agents, and every team is set to become $25 million richer. What would you do?

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