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The National Basketball Players Association has informed the NBA that it will not agree to "smoothing" of the salary cap prior to the 2016-17 season, the league announced Wednesday. That sets up a massive one-year increase of the salary cap during the summer of 2016 as a result of the new national television deal that will go into effect that season.
With annual national TV revenues set to increase from $930 million to $2.67 billion starting in 2016-17, player salaries will balloon along with the league's income. That led to league officials trying to find a way to spread increases in the salary cap over several years instead of all in one year, but any maneuvers would've required the union's blessing.
As the league's announcement explains, the proposed "smoothing" would've involved smaller increases to the salary cap and evenly distributing the remainder of increased compensation to all players.
"Smoothing would have avoided a substantial Salary Cap spike in 2016-17," NBA executive vice president of communications Mike Bass said. "Under the league's smoothing approach, the salary shortfall resulting from more gradual Cap increases would have been paid directly to the Players Association for distribution to all players, and thus the total compensation paid to players in any given season would not have been impacted."
However, the NBPA has rejected this proposal in favor of a major spike to the salary cap in 2016. Experts believe the salary cap could rise to $90 million or more that year; it's at just $63 million this year. As NBA cap expert Larry Coon points out, this is a decision that should negatively affect a lot of rank-and-file union members who would have received bonus compensation under the proposed "smoothing" plan:
You know who gets screwed the most from this? Rank and file players who don't have many years left in the league. Under smoothing they would
— Larry Coon (@LarryCoon) March 11, 2015
...have gotten a big shortfall check in 2016-17. But this way, all the 2016 money goes to 2016 free agents. Playes need to be in the league
— Larry Coon (@LarryCoon) March 11, 2015
...past 2017 to reap the benefits. Players whose last years in the league are 2016-17 or 2017-18 will miss out. This is why I'm surprised
— Larry Coon (@LarryCoon) March 11, 2015
The big factor here is the league's maximum salary, which is determined by the salary cap and should rise substantially in the summer of 2016. That means top free agents will be able to command significantly more money than ever before, and the vast majority of the new salary cap space will go to those players. Any leftover money will go to players who are set to be free agents that year and not to players who are already under contract.
That's caused some to question the union's strategy. While star players with free agency eligibility in 2016 are surely getting giddy at the idea of record-setting contracts, the alternative proposal would've increased payouts for everyone even if they were already under contract.
The statement makes it official: The summer of 2016 is setting up to be ridiculous. With every team seeing more salary cap space and a large increase to the max salary, bidding for top players in that offseason will hit a level we've never seen before. Some of the names who could command huge contracts include former MVPs LeBron James and Kevin Durant, as well as solid second-tier stars like Al Horford and Mike Conley.
We still have more than a year before that offseason hits, but given the projected cap increase, it's hard to imagine anyone with a strong reputation and 2016 free agent eligibility taking a deal before then. Restricted free agents like Jimmy Butler and Kawhi Leonard will be tempted to sign one-year qualifying offers so they can be a free agent in 2016.
If one thing is certain at this point, folks are going to get paid in just over a year.