NBA Lockout: Hard Cap Back On Table May Be Too Much For Players To Take

The NBA lockout ultimatum includes the threat that the hard salary cap will be put back on the table. Given how long it's been gone, that could be terrifying for players under pressure. Plus, The Hook considers whether the mini mid-level is a good thing for high-salary teams.

David Stern's NBA lockout ultimatum has to be terrifying for players, but not because of the continued jousting on the revenue split issue. Stern said that if players don't take the league's deal by Wednesday, the owners' new offer will lower the proposed revenue split to 47 percent for players ... and the good ol' flex cap will be back.

Players have faced the specter of a revenue split at or below 50 percent for some time now. Though the league has moved to 50 percent several times since the start of October, the union has been well aware that this issue remains at play so long as negotiation are ongoing. Players have lived with the idea that their aggregate salary will sharply decrease in the new deal.


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But the hard salary cap -- which is what the league's NHL-style flex cap actually is -- has been off of the table for months. This is something I'm certainly guilty of forgetting as negotiations roll on: dropping the flex cap for piecemeal cap system fixes was a big concession on the part of the owners. I don't personally think that the league has much ground to demand a hard-cap system for the reasons it has been pushing (namely competitive balance, which is more a flying unicorn than a reasonable goal), but both sides were clearly invested in getting their way on it. The league caved. That's worth a lot.

Bringing it back into the picture now, after months of negotiations on other items, is a real big play by the league, and it's something that players can't ignore. If Stern sticks to his word and players reject the 50-50 deal, and a year is lost through court proceedings, and NHL players end up being right, that it's no use to miss a season because you'll take the same crappy deal in the end, and that crappy deal includes a hard cap? Players will be furious with themselves and their leaders. They can take a deal without a hard cap right now. That deal may not be on the table by Thursday. That's a huge thing to consider, given how strident players were in opposing the hard cap.

WHO ARE WE HELPING?

The mini mid-level deal presented by owners as a compromise on the issue of limits to what teams over the luxury tax line can do seems like a fair, smart compromise. The normal mid-level exception, as negotiated in the new deal, starts at $5 million and extends for up to three years. Any team over the cap can use it once a season, split between multiple players if they'd like.

But owners didn't want teams over the tax to be allowed to boost their salary by using the mid-level any longer. The owners and union were at loggerheads over the issue, even after big ticket items like the luxury tax itself were settled. So owners proposed a mini mid-level for tax teams. Teams over the tax threshold -- which is roughly 120 percent of the salary cap -- can only use a two-year mid-level with a starting salary of $2.5 million. In theory, this would hurt tax teams' negotiating position, which would have the dual effect of sending the "best" mid-level players to teams that can offer the full mid-level, and then as a result create an incentive for teams to stay under the tax approach free agency. It would also reduce tax teams' top-level salary by $2.5 to $3 million, even if there were no impact on where free agents signed.

That's all theoryball, though. I can see a world where the mini mid-level actually helps tax teams avoid costly mistakes.

We know how dreadfully the mid-level has performed over time. Teams over the tax -- like the Lakers, Heat and Mavericks -- have an interesting advantage in competing for free agent veterans on account of competing for a championship. You don't see veteran free agents lining up to sign with the Kings, after all. Consider a player like Mike Miller, who fits a need with the Heat, has made plenty of money, but is young enough that taking the veteran's minimum isn't quite right. The Heat would love to be able to offer him the full mid-level, but geez, the Big Three have sent them into tax territory. They have the mini mid-level, though. And that's all the other major contenders have, too. 

So Miller would end up taking it, I reckon. That means a lower salary level and a shorter commitment for Miami.

Now consider Al Harrington. He's choosing between the Mavericks (already over the tax) and Nuggets (not quite yet). The Mavs have the mini mid-level, the Nuggets have the full version. Dallas represents the better chance to compete by a decent margin ... but Denver can offer twice the annual salary and an extra year. If salaries were even, he'd pick Dallas. But they aren't, so he chooses Denver.

Denver can't dare offer just half of its mid-level -- then they'd lose their guy. But capping the amount tax teams can spend on their mid-level players, the league does those teams a favor ... because we're pretty certain mid-level players like Harrington and Miller are worth closer to $2.5 million than $5 million. 

There will be some mid-level players who will hold out for the full version instead of the mini edition; Samuel Dalembert seems like a class of 2011 player suited to the $5-million exception, in particular. But in the aggregate, over time, I'm pretty sure the creation of a second mid-level will help tax teams by artificially constricting their ability to make mistakes. Maybe in 10 years teams that don't pay the tax will be begging for a mini mid-level of their own.

Star-divide

The Hook runs Monday through Friday. See the archives.

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