NBPA Rejects Latest Smoothing Proposal; Major Cap Spike Expected in 2016

The NBA wants to avoid the huge cap spike projected for the 2016-17 season in the wake of big new national television deals that are scheduled to take effect that year, but the players union has rejected the latest "smoothing" proposal offered by the league.

Under the proposal, the money that would have gone to the players in contracts under a new, higher salary cap, would instead be paid to the union for distribution to its members. The specific details are not entirely clear, but the idea appears to be that instead of seeing the cap go from the expected $66-$68 million in 2015-16 to somewhere likely between $80-$90 million for 2016-17, the cap increase would be more moderate with the shortfall being paid by the league to the union.

The union has rejected this proposal, and there are understandable reasons why. First, it's in the union's interests for the salary cap to be as high as possible--it gives them a better bargaining position. Once the cap hits heights in the range of $90M, it isn't going down. The players will be in a better position to opt out of the agreement they signed in the last round of negotiations, one that was a clear win for the owners. If the players can negotiate from a place where the cap is already closing in on $90M, they stand to come out of bargaining with a better deal than they otherwise would.

In 2017, the salary cap will have gone up roughly $30M (and roughly 50%) in the five years since the previous deal was signed. This despite a significant reduction in players' percentage of BRI. At that point, the players will be more than justified in rejecting ownership claims of poverty, and will no doubt be looking to recoup some of their own losses from the current agreement. We could be looking at another work stoppage in 2017-18, which might take the form of either a strike or a lockout.

Furthermore, the union's power brokers are now maximum salary players Chris Paul and LeBron James. Max salaries are tied in to the salary cap--they exist as a percentage of the cap. This is a huge incentive for max guys to reject any smoothing proposal--it specifically costs them money. Now, the flip side is that it helps the non-max guys--particularly those on the lower end of the salary scale, but they do not appear to be demanding a smoothing proposal, or at least they aren't doing so publicly. Younger players on the lower ends of the scale might also be of the opinion that a rising tide lifts all boats. They will have their shot at free agency eventually, and the higher the cap is the better off they will be, even if they aren't max level players.

The group of players that a non-smoothed deal hurts is guys at the ends of their careers. A smoothing proposal like the one offered by the league would probably result in their receiving a substantial check, while they will not have the benefit of being able to take advantage of huge increases in the salary cap (h/t Larry Coon). The other group that might be hurt is the free agent class in the summer of 2015. Will they try to sign short, one or two year deals in order to hit the market again under the new cap figures? That's a risk, and teams will be negotiating from the opposite perspective of wanting to lock guys up before the cap explosion.

All of this makes the next couple of summers fascinating. Plenty of teams will have room this summer; virtually everyone will next summer. What do teams with cap space this summer do? Can they take advantage of their relative freedom before everyone goes hog wild in 2016? Is that good thinking? What about guys who are RFA's this summer? Does it make sense for them to sign qualifying offers to hit the market in 2016? Lots of questions to be answered.

Some thoughts on the Wolves cap situation:

The Wolves have committed salaries totaling roughly $55M for 10 players for next season. This includes Chase Budinger's player option for $5 million, but not Lorenzo Brown's unguaranteed salary of under $1M. It does not include a salary for Kevin Garnett, who they are widely expected to try to bring back for at least another season, nor does it include a salary, likely to be in the $3-$5M range, for their first round draft pick. Given the expected cap, it is unlikely that the Wolves will be able to take advantage of any cap room this summer.

The following year, of course, everyone will have room due to the expected increase. Currently the Wolves have roughly $49M committed to nine players; this includes option years for several guys, but ignores the 4th year of Anthony Bennett's contract, which might be wishful thinking on my part. It also includes the final year of Kevin Martin's contract, which is a player option. It does not include salary for future first rounders this year or next.

Of course it's impossible to say what their salary figure will look like in summer 2016; too many things could happen between now and then. What is likely is that they will be in a large group of teams with money to spend. How wisely they are able to do so will be a question for every team's fans.

Another issue that will come to the forefront with the massive cap increase for 2016-17 is the minimum salary. The CBA calls for a salary floor of 90% of the cap, which means teams will be required to spend close to $77M if the cap winds up at $85M. The alternative is that they make up the shortfall by distribution among their own players, but most teams will scramble to find someone to pay.

The Wolves might find themselves in that boat: having money they not only CAN spend, but money they almost HAVE TO spend, and limited options on who they can acquire for that money. The likelihood that we see a ton of outsized deals by desperate teams--not only the Wolves--in the summer of 2016 is high.

At any rate, it's going to be a crazy summer. I'm not sure it bodes well for the smaller, less desirable markets, as the big market teams will almost certainly have the cap resources to go after the best players, but it's going to be something to see.