Apr 6, 2012; Dallas, TX, USA; Portland Trail Blazers small forward Nicolas Batum (88) brings the ball up the court during the game against the Dallas Mavericks at the American Airlines Center. The Trailblazers defeated the Mavericks 99-97 in overtime. Mandatory Credit: Jerome Miron-US PRESSWIRE
The Hook explores how lower aggregate costs but the retention of laughably high player salaries is exactly the result NBA owners wanted in the lockout deal.
One year ago, the NBA was mired in a lockout that would eventually claim 16 regular season games from each team and lead to some pretty major salary cap changes, most notably lowering the split of revenue that players would take from 57 percent to 50 percent. Unfortunately, some fans believed that the lockout deal would end the pervasiveness of stupid NBA free agent deals and level the table between markets of different sizes.
Welp, so much for that.
If you needed any proof that the lockout wasn't about competitive balance and wasn't about reigning in individual salaries for mid-rung players, you're getting it this week. Many of the provisions of the lockout deal are currently in place; in another year, they'll be fully implemented. Most of the agreements reached this week include salary for 2013-14 and beyond, which means that these contracts will be subject to the provisions yet to take effect, such as harsher luxury tax penalties.
The L.A. Lakers' Steve Nash deal is one such agreement. Late Wednesday, the Lakers (No. 3 in total payroll since 2006) executed a sign-and-trade deal for the two-time MVP, paying him $27 million over three years ... despite already sitting more than $20 million over the salary cap for next season with just eight players under contract. L.A. was $9 million beyond the luxury tax line before acquiring Nash, and will be about $20 million beyond it when all is said and done. As of right now, including Nash, the Lakers are about $14 million over the cap for 2013-14 with six roster spots accounted for.
So much for the lockout deal tamping down team salaries, right?
The lockout deal didn't come close to ending massive contracts for largely unproven players, like $25 million for back-up center Omer Asik, up to $50 million for 23-year-old three-and-D wing Nicolas Batum, $34 million for recent back-up Goran Dragic, $40 million for recent back-up George Hill and a max $58 million deal for Eric Gordon, a four-year vet who missed basically all of last season.
To be sure, all of these players are promising; I have absolutely no problem with the Gordon max, the Asik offer or the Batum deal. But some of the owners complained about committing large salaries to unproven players, and they used that as a rationale for perpetuating the lockout even when the union made concessions elsewhere.
Guess what? We're still seeing large salaries for unproven players.
There are no Joe Johnson deals to be seen; Deron Williams is the only player to approach triple digits on a current contract at $100 million over five years, and the majority of NBA teams would gladly take that on right now. But withhold some hope for more crazy deals: Ryan Anderson, Ersan Ilyasova and maybe Andrei Kirilenko still need to be paid. There are reports of a truly unreal contract for Jeff Green, and Jason Thompson has a deal with a starting salary of $6 million on the table. (That he hasn't scooped it up tells you all you need to know about the market.)
The aim of the NBA lockout all along was to save the owners some money by tamping down aggregate salaries. The actual mechanics of how that will happen are interesting to cap wonks like myself, but the endgame is what matters. And the endgame is lowered expenses for NBA owners. If you lower the expenses, you increase the profit or minimize any losses. Tada! It's like magic.
So Eric Gordon gets $58 million over four years instead of almost $80 million over five years, as previous fourth-year vets had. Batum gets $50 million over four years instead of $65 million over five. Williams takes $100 million over five years instead of $125 million over six. Dragic's contract increases by just 4.5 percent per year instead of 7.5 percent. It all adds up for owners.
So does the escrow account that owners will soak right up. Under the new deal, every player puts 10 percent of their salary in a pot. If at season's end, aggregate player salaries exceed 50 percent of the league's basketball-related income (with some quirks in there), owners take whatever portion of the pot brings the books to balance. In all likelihood, for the next six years, the owners will be taking that entire pot. So Steve Nash's $27 million deal is more like $24 million. It all adds up for owners.
And watch the salary cap climb slowly in 2013 and beyond despite sure-to-be insane upticks in league revenue, all thanks to the players' acceptance of a lower share of revenue. But all the stunted salary cap growth figures to affect is max contracts, which are based on a percentage of the cap. That won't tamp down salaries for mid-rung players (as the league argued it would) -- it will leave open gaping holes in teams' salary structures for players like Asik, Batum and Hill to slide in and soak up, ensuring we will have contracts to complain about for years to come.
And in those years to come, when the L-word strikes again, owners will use those contracts like cudgels to argue that player salaries are still too high. Owners are saving huge pots of money under this lockout deal, but player salaries still look insane to the common fan. That's pretty much a best-case scenario for the owners, and it makes you wonder if that was the plan all along.
The Hook is a daily NBA column by Tom Ziller. See the archives.