clock menu more-arrow no yes

Filed under:

NBA will try to gradually introduce salary-cap increases from new $24 billion TV deal

New, comments

The league will bargain for a gradual increase of the salary cap over multiple seasons instead of one big jump in the first year of their new $24 billion television deal.

If you buy something from an SB Nation link, Vox Media may earn a commission. See our ethics statement.

Brad Penner-USA TODAY Sports

The NBA will attempt to "smooth out" the massive projected increases in the salary cap that'll result from the new $24 billion television deal starting in 2016, commissioner Adam Silver confirmed in a press conference. The idea is to have them arrive in smaller doses rather than one huge jump in 2016.

Such a move will need to be collectively bargained with the players union, but Silver said he has preliminary meetings planned with new NBPA head Michele Roberts to discuss just that.

The salary cap is calculated as a percentage of basketball-related income, which will rise significantly in 2016 once the new TV deal is in place. Very rough estimates suggest the salary cap could rise to over $88 million in that one year alone, which is $25 million more than this year's figure. The summer of 2016, which is expected to include big-name free agents like Kevin Durant and perhaps LeBron James, would become a massive free-for-all as current players do everything possible to cash in on the one-time increase and teams rush to sign expensive free-agent deals to fill their balance sheets.

This explains why the league wants to smooth out the salary cap, but the exact mechanisms remain unclear because the cap is directly tied to league revenue. One theory posed by Grantland's Zach Lowe: the league could add the projected gains of a new TV deal into next year's cap figure, causing a preliminary jump, but one that won't be too far off from whatever the new figure ends up being in the first year of the new TV deal. There'd still be an increase in 2016, but in theory, it won't be as big of one.

But that must be agreed to by the player's union, which may not go along with it. The league is expected to argue that a massive one-time jump in the salary cap is unfair to players who won't be free agents that year, according to USA Today's Jeff Zilgitt. At the same time, a significant number of players specifically signed short-term deals to hit the market in 2016 because of that projected TV bump, as our Tom Ziller noted.

However, there's hope for the NBA. The NFL adopted a similar measure prior to signing its new TV deal, and it was pushed by the players association. From a 2013 USA Today article:

"You don't want to have a year where it increases $2 million and then $12 million the next year. That's not fair to the guys who did long-term deals in the years it only went up $2 million," [NFLPA Director of Salary Cap and Administration Mark] Levin said. "You smooth it out so that the increases are fairly consistent."

The NFL ultimately arrived at a 2013 cap figure by borrowing against projected TV revenues, yet still saw a $10 million increase in the cap in 2014, which was more than initial projections suggested. It remains to be seen if the NBA adopts a similar path.

It should be noted that players will be guaranteed 50 percent of basketball-related revenue regardless of the decision made with the salary cap.