NBA owners continue to cry poverty in a league that just saw a rise in basketball related income, meaning an increased salary cap, which in turn means increased salaries by default.  They continue to talk contraction and player salary reduction, and seemingly pushing toward a lockout while being at the height of its popularity in the post-Jordan era.  Owners currently spend $2.1 billion on player salaries and benefits, and want to reduce that by upwards of $800 million.  Many people can agree that salaries may have gotten out of control given the current economic climate, and asking for pay cuts does not seem that unreasonable.  Apparently all owners are either not on the same page or do not understand fiscal responsibility, see the Memphis Grizzlies.

Memphis is one of the teams eyed for contraction due to the fact that they are consistently in the red. Then last week the Grizzlies turned around and gave Mike Conley a five year $45 million dollar contract extension, paying him more than Jason Kidd, Devin Harris, Jameer Nelson, Mo Williams and Andre Miller.  This after handing Rudy Gay $82 million dollars and tying up $130 million dollars in the future with OJ Mayo, Zach Randolph and others.  The Atlanta Hawks, another team consistently in the red handed Al Horford, who would probably get the same on the open market, a five year, $60 million extension.  This after handing Joe Johnson $120 million in the off season.  It is understandable that teams want to keep their players, but if you can not afford them, and still pay them then whose fault is that?

Surely not the players, who they want to take money away from.  If owners do not improve their spending, pay cuts won’t matter and the 2011-2012 NBA season won’t exist.

As we all already know Carmelo Anthony is involved in a four team blockbuster trade that would make him a New Jersey Net.  The only thing holding the deal up is that Melo needs to sign off on his extension, worth $65 million over three years.  Melo has his heart set on the Knicks, but at the same time wants his money.  While signing the extension would give that to him, it could also be a moot point.  NBA owners are seeking contract rollbacks, similar to what the NHL did in 2004, starting next year.  The rollbacks could be as high as 24%, leaving Melo’s extension worth $50 million over three years, or $16.5 a year.  The max contract could drop to around $11 or $12 million next season, so while Melo would make more with the Nets, is it worth it if he doesn’t want to be there?

If your Melo, what do you do?

Today, the NBA Players Union and the  owners sat down for a three hour meeting and released a press release, including the following statements:

“The increased frequency of meetings can be interpreted as a positive step as both parties work to avoid the second work stoppage in league history. The threat of a lockout next summer will loom over negotiations throughout the season.

The key issue is the players’ percentage of league revenues, currently at 57 percent. NBA owners are pushing for a drastic reduction in that percentage in an attempt to overhaul the current economic system. NBA commissioner David Stern has said teams lost approximately $370 million last season. The union has flatly rejected that claim.

Contact lengths, guaranteed salaries, Bird rights and the salary caps are among the other topics on the table. Both the owners and players have submitted CBA proposals this year, though each has been rejected by the other side during previous meetings.”

The press release stats that the talks are constructive, but I cant see how that is possible when each sides demands are unrealistic. It seems to me that a lockout is more and more possible as the days move on.

via NBA.com

The latest superstar rumors to come to the surface in the 2010 off season involve Denver Nuggets forward Carmelo Anthony.  It has been widely publicized that the Nuggets have offered Melo and three year extension worth $65 million.  It has also been widely publicized that Melo has decided to nothing with that offer and “take his time”. Anthony taking his time to make his decision pins the Nuggets into a corner, assuming the speculation that he will leave at the end of the year are true.  For everyday that he waits on signing that extention his trade value drops ever so slightly.  If the Nuggets want to get full value for Carmelo then they need to trade him as soon as possible, because no team is going to give up the farm for a one year rental of Anthony, let alone to acquire him in February.  Melo is left with a three options:

1) Agree to sign the extension on the condition he is traded

2) Refuse to sign the extension and force a trade mid year

3) Walk at the end of the year and the Nuggets get nothing in return.

None of these three options benefits the Nuggets in anyway, especially the third option.  With the first scenario  Melo would have to be traded to a team that he wants to go to, which is presumably the New York Knicks.  This scenario gives the Nuggets at best a package of Danilo Gallinari, Wilson Chandler, Eddy Curry and a 2014 first round pick, hardly enough to satisfy the fans.  With the second option its possible that Denver could receive a better package from another team in the league, but what team is going to mortgage their future for say four months of Carmelo? I would say none.  The third option helps nobody.  Denver would get nothing in return for its star, besides a couple of picks in a sign and trade.  It’s a nightmare scenario for Denver, especially if he signs with the Knicks. How bad would it look for Denver’s new GM if all he got was a 2014 first round pick for Anthony?  From Carmelo’s perspective he can’t afford to sit and wait for free agency, because it is not certain what is going to change in the new CBA, or if their will even be basketball in 2011.  Unless the next few CBA meetings go extremely well in the players favor, it wouldn’t be wise for Carmelo to not sign his extension, unless money isn’t the motivation for him which could be the case.  If winning or being in New York is the motivation, and he is willing to sacrifice  some income, than the extension debate is moot.  However you slice it Carmelo and the Nuggets both have some difficult decisions to make in the coming months.

My Prediction: Carmelo signs his extension as part of a trade to the Knicks.

As we leave behind one of the most scrutinized and followed off-seasons in the history of the NBA and enter into a season that is full of question marks, the 500 pound gorilla in the room must be addressed:

The 2011 Collective Bargaining Agreement.

At the current stage of negotiations a lockout looks more likely as offers from both the players union and the owners get rejected by both sides. A lockout would be disastrous for a league that seems to be at the height of its popularity in the post-Jordan era. For those not familiar with the negotiating points of the new CBA, below is a breakdown of what the owners presumably wants.

What The Owners Wants

1. A Hard Salary Cap

Owners are not very fond of the current soft cap system, which allows teams to go over the stated salary cap when using the Larry Bird Exception, the Mid Level Exception and also when signing players to minimum contracts.  A hard salary cap has both positives and negatives for the owners, but the negatives outweigh the positives.  One positive that would come out of a hard cap is that it would control spending by keeping teams from overpaying their own players (see Amir Johnson), thus raising the price of other free agents on the market.  It would also keep the top teams from signing top talent while over the cap by using the Mid Level Exception (see Miami Heat and Mike Miller). Talent would be more equally distributed as it would harder for players to team up without taking significant paycuts.  However by installing a hard salary cap the NBA would most likely need to eliminate the Larry Bird Exception, which will make it harder for teams to keep their top players that they drafted.  With a hard cap in place the Oklahoma City Thunder most likely will not be able to keep together the nucleus of Kevin Durant, Russell Westbrook and James Harden without the three of them taking significant pay cuts.  Does Westbrook leave a significant amount of money on the table to stay in Oklahoma City when he can make more somewhere else?  Another way that it hurts teams is that trades involving teams at the cap line would have to be for even salary, thus throwing the 125% of salary plus $100,000 rule out the window.  Under the rule a team at or over the salary cap threshold is able to take back 125% plus $100,000 of the salary that they are sending out in a trade.  It will become difficult for teams to trade stars to create cap room or take on expiring contracts to free up space.

2.  Shorter and Smaller Contracts

As currently constructed the maximum contract for unrestricted free agents signing with another team is five years, while signing with their own team is six years if the Larry Bird Exception is used.  In most circumstances the maximum salary for a player signing a new contract in 2010 ranges from $13 million to slightly over $19 million a year.  Shortening both the length (presumably to four years) and lowering the amount of contracts will help owners to control spending, and allow teams to fit more players under a potential  hard salary cap.  It is also gives teams the ability to cover up for past mistakes, as you wont have Emeka Okafors signed to six year deals at $11 million per year.

3. Non Guaranteed Contracts

This another move by the owners to have less accountability for their mistakes.  By having every contract non guaranteed for example, the Knicks would be able to cut Eddy Curry without taking a hit against the salary cap, minus whatever money was guaranteed for the years remaining on his contract.  This will be the hardest bargaining point for the owners to try to get the player’s union to concede on, because it would be a devastating blow to its players.  Injury riddled players like Michael Redd, non existent players like Eddy Curry and under performing players like Vince Carter would be waived in order to create cap space.  If you thought teams clearing cap space for the Summer of LeBron was ridiculous enough, imagine how out of hand it would have been if teams could waive players while taking only a minimal cap hit.  Every team in the league would have attempted to do what the Knicks and Heat did, and is that something the league wants taking place every summer?

While a lot of the suggested changes by the owners will improve the game, and help make them make more money, it won’t be an easy sell to the players. Why? The first reason is that the union is going to find a hard time believing the owners are losing so much money if teams’ income rose last year despite the national recession. Lets not forget the massive spending that took place this off-season. A lockout looks very possible, as does a radically changed NBA.