Owners' tax proposal

[sturt]

http://nba-point-forward.si.com/2011/10/11/exclusive-details-of-owners-tax-proposal/#?xid=si_nba

I think I like it... though, of course, not nearly as much as the plan I put forward over the summer. ;)

The devil, of course, is in the details, and a source close to the labor negotiations explained to SI.com just how the owners’ tax proposal would work. (An NBA spokesman declined a request to comment or verify the details of the tax proposal, saying the league will not publicly discuss the specifics of the negotiations.)

• The tax would start at $1.75 in penalty payments for every dollar a team is over the tax threshold. Say goodbye to the dollar-for-dollar hit, which was the maximum penalty a team could pay under the old system.

• That $1.75-to-1 ratio would last for the first $5 million a team is over the tax line. For every $5 million increment after that, the penalty would jump by 50 cents per dollar. So, for spending over the threshold between $5 million and $10 million, the penalty would be $2.25-to-1. For spending between $10 million and $15 million, it would be $2.75-to-1. And so on....

And the poker gets even hotter. As Yahoo! Sports’ Adreian Wojnarowski reported late Monday, the proposal would penalize teams that pay the tax in more than two seasons during any five-season stretch. That penalty is harsh, according to a source familiar with the matter. If a team has gotten into tax territory, say, twice over the preceding four seasons and finds itself over the tax line a third time, the penalty triples for the top spending range you reach. In other words, that $1.75-to-1 ratio that kicks off the tax in Year 1 would jump to $5.25-to-1 for a team paying the tax a third time. Do the math, and you could get to 10-to-1 or higher pretty quickly. Whether you’re the Lakers or the Knicks or the Bill Gates Billionaires (based in Seattle!), you are going to blink at paying $100 million in tax penalties alone. Fine, maybe Gates wouldn’t blink, but he doesn’t own an NBA team.....

[Wretch]

The way I read this is that the "cheaper" owner's want to penalize owner's who are willing to spend money for marginal players. In other words, each individual owner wants to penalize other owner's for spending above a threshold. However, each individual owner faces an incentive to sign a marginal player to improve their probability of winning a game. In stranger terms to most, this is cartel behavior of firms wanting to restrict quantity of other firms within the cartel while still trying to maximize their respective profits by producing more.

If this type of measure goes through, then quality of play goes down. As a consumer of basketball, I would prefer that quality does not go down. But hey, what I am but just a simple fan understanding the dynamics of the organization?

I agree and disagree. On one hand, I know the desire (somewhere in there) is keeping competitive balance. I can't say that this proposal is the poor trying to eat the rich. It's not like the owners are divided and fighting amongst themselves (if they are, then they're not tipping their hand). They're trying to implement a system that discourages the clubs like NY and Miami from dog-piling all the top talent onto one team.

But on the other hand, I've never liked the luxury tax idea either. It encourages a team like the Clippers to just stay under the cap and collect refunds. And under the proposed system, the cheap owners who refuse to spend will have even bigger kickbacks being redistributed and thus an even bigger incentive to stay cheap.

Would a hard cap be a better solution? For the owners, yeah probably. It cuts all the BS out and you have the ultimate in competitive balance - build your team within the framework, no cheating. But you're doing a 1 - 2 punch on the players that really isn't fair. They'd be effectively putting a headlock on individual salaries and player salaries as a whole (and affecting a portion of the player's entitlement to the BRI).

It's a slippery slope to be sure, but they just need to think outside the box. Unfortunately, neither side wants to give up the $$$ and is far more focused on what they can get than how they can balance the league. I wonder if a hard cap would work if they implemented some sort of kickback to the players.....

[coachx]

The way I read this is that the "cheaper" owner's want to penalize owner's who are willing to spend money for marginal players. In other words, each individual owner wants to penalize other owner's for spending above a threshold. However, each individual owner faces an incentive to sign a marginal player to improve their probability of winning a game. In stranger terms to most, this is cartel behavior of firms wanting to restrict quantity of other firms within the cartel while still trying to maximize their respective profits by producing more.

If this type of measure goes through, then quality of play goes down. As a consumer of basketball, I would prefer that quality does not go down. But hey, what I am but just a simple fan understanding the dynamics of the organization?

I don't see quality going down unless it restricts salaries to the point where more players go to Europe to make more money and shrinks the NBA talent pool. It definately shrinks the "middle class" of NBA players (in terms of salary).

I actually see quality going up..........there should be fewer piss poor teams and fewer super teams which should mean better competition through an 82 game season.

I'm assuming your view point is quality of play is going down b/c there will be no more "super teams" with payroll $20 mill over the cap like the Mavericks.........but the another view point is it will allow small market teams a chance to keep their veterans longer and close the competition level gap.

Edited October 12, 2011 by coachx

[Wretch]

I don't see quality going down unless it restricts salaries to the point where more players go to Europe to make more money and shrinks the NBA talent pool. It definately shrinks the "middle class" of NBA players (in terms of salary).

I actually see quality going up..........there should be fewer piss poor teams and fewer super teams which should mean better competition through an 82 game season.

I'm assuming your view point is quality of play is going down b/c there will be no more "super teams" with payroll $20 mill over the cap like the Mavericks.........but the another view point is it will allow small market teams a chance to keep their veterans longer and close the competition level gap.

Quality at the top is surely to be affected - but that is the intent, and that I agree with. There shouldn't be 3 or 4 teams that steamroll everybody else and end up playing for the gold every year. It gives the fans more reason to hope - maybe we COULD win it all? That's going to create more interest, more turnout, and more revenue.

I don't see how that is at all bad.

[Gray Mule]

If we have one super team in each division - - They have EVERY all star player

on their roster and they all make those mega bucks - - so what!

No one in their division can beat them. They get ALL the national TV coverage.

No one wants to watch the other teams on TV.

Every season they win their division and play before sold out buildings against

the champions from the other divisions to great TV audiences.

What about the other teams? Who needs them? No one.

This solves the regular season problem - - We just don't have one!

[Wretch]

If we have one super team in each division - - They have EVERY all star player

on their roster and they all make those mega bucks - - so what!

No one in their division can beat them. They get ALL the national TV coverage.

No one wants to watch the other teams on TV.

Every season they win their division and play before sold out buildings against

the champions from the other divisions to great TV audiences.

What about the other teams? Who needs them? No one.

This solves the regular season problem - - We just don't have one!

lol... 100% truth right there. Could not have said the part in bold any better.

[TheNorthCydeRises]

Here's a reality check for people. The following are the division winners in each division from the 1980 - 81 season to the 1989 - 90 season. I'm using this period because many people believe that basketball was best during this era and more balanced and competitive.

1981

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Phoenix

CHAMPION: Boston

1982

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Los Angeles

1983

ATLANTIC: Philadelphia . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Philadelphia

1984

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: Utah . . WEST: Los Angeles

CHAMPION: Boston

1985

ATLANTIC: Boston . . CENTRAL: Milwaukee ( again ) . . MIDWEST: Denver . . WEST: Los Angeles

CHAMPION: Los Angeles

1986

ATLANTIC: Boston . . CENTRAL: Milwaukee ( 6th in a row ) . . MIDWEST: Houston . . WEST: Los Angeles

CHAMPION: Boston

1987

ATLANTIC: Boston . . CENTRAL: Atlanta . . MIDWEST: Dallas . . WEST: Los Angeles

CHAMPION: Los Angeles

1988

ATLANTIC: Boston . . CENTRAL: Detroit . . MIDWEST: Denver . . WEST: Los Angeles

CHAMPION: Los Angeles

1989

ATLANTIC: New York . . CENTRAL: Detroit . . MIDWEST: Utah . . WEST: Los Angeles

CHAMPION: Detroit

1990

ATLANTIC: Philadelphia . . CENTRAL: Detroit . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Detroit

Division Titles

Los Angeles - 9

Boston - 7

Milwaukee - 6

San Antonio - 4

Detroit - 3

Denver - 2

Utah - 2

Philadelphia - 2

Atlanta - 1

New York - 1

Houston - 1

Dallas - 1

Phoenix - 1

Question . . . was there parity back in the "Golden Age" of basketball in the 1980s?

- 13 teams win a division title ( 56.5% of teams . . 23 teams ) .. ( 52% of teams . . 25 teams )

- Lakers win 4 NBA Championships . . Boston 3 . . Detroit 2 . . Philly 1

*********************************

The NBA goes to 3 divisions starting with the 2004 - 05 season. Let's see what the division winner + NBA champion looks like now.

2005

ATLANTIC: Boston . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Seattle . . PACIFIC: Phoenix . . SOUTHWEST: San Antonio

CHAMPION: San Antonio

2006

ATLANTIC: New Jersey . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Denver . . PACIFIC: Phoenix . . SOUTHWEST: San Antonio

CHAMPION: Miami

2007

ATLANTIC: Toronto . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Utah . . PACIFIC: Phoenix . . SOUTHWEST: Dallas

CHAMPION: San Antonio

2008

ATLANTIC: Boston . . CENTRAL: Detroit . . SOUTHEAST: Orlando . . NORTHWEST: Utah . . PACIFIC: Los Angeles . . SOUTHWEST: New Orleans

CHAMPION: Boston

2009

ATLANTIC: Boston . . CENTRAL: Cleveland . . SOUTHEAST: Orlando . . NORTHWEST: Denver . . PACIFIC: Los Angeles . . SOUTHWEST: San Antonio

CHAMPION: Los Angeles

2010

ATLANTIC: Boston . . CENTRAL: Cleveland . . SOUTHEAST: Orlando . . NORTHWEST: Denver . . PACIFIC: Los Angeles . . SOUTHWEST: Dallas

CHAMPION: Los Angeles

2011

ATLANTIC: Boston . . CENTRAL: Chicago . . SOUTHEAST: Miami . . NORTHWEST: Oklahoma City . . PACIFIC: Los Angeles . SOUTHWEST: San Antonio

CHAMPION: Dallas

Division Titles ( 7 year span . . 42 possible division titles to win )

Boston - 5

San Antonio - 4

Detroit - 4

Miami - 4

Phoenix - 4

Los Angeles - 3

Orlando - 3

Denver - 3

Dallas - 2

Cleveland - 2

Utah - 2

Oklahoma City - 1

New Orleans - 1

Toronto - 1

New Jersey - 1

Seattle - 1

Chicago - 1

- 17 different teams win a division within a 7 year span ( 56.7% of teams in the league )

- 5 different NBA Champions: San Antonio 2 . . Los Angeles 2 . . Boston 1 . . Miami 1 . . Dallas 1

**************************************

Old alignment

2005

ATLANTIC: Miami . . CENTRAL: Detroit . . MIDWEST: San Antonio . . PACIFIC: Phoenix

2006

ATLANTIC: Miami . . CENTRAL: Detroit . . MIDWEST: San Antonio . . PACIFIC: Phoenix

2007

ATLANTIC: Toronto . . CENTRAL: Detroit . . MIDWEST: Dallas . . PACIFIC: Phoenix

2008

ATLANTIC: Boston . . CENTRAL: Detroit . . MIDWEST: New Orleans . . PACIFIC: Los Angeles

2009

ATLANTIC: Boston . . CENTRAL: Cleveland . . MIDWEST: Denver . . PACIFIC: Los Angeles

2010

ATLANTIC: Orlando . . CENTRAL: Cleveland . . MIDWEST: Dallas . . PACIFIC: Los Angeles

2011

ATLANTIC: MIami . . CENTRAL: Chicago . . MIDWEST: San Antonio . . PACFIC: Los Angeles

Division titles ( old alignment - 28 possible division titles in 7 years )

Los Angeles - 4

Detroit - 4

Phoenix - 3

MIami - 3

San Antonio - 3

Boston - 2

Cleveland - 2

Dallas - 2

Denver - 1

New Orleans - 1

Orlando - 1

Toronto - 1

Chicago - 1

- 13 teams win division titles in 7 years ( 43.3% of teams in the league )

Edited October 17, 2011 by northcyde

[Plainview1981]

Here's a reality check for people. The following are the division winners in each division from the 1980 - 81 season to the 1989 - 90 season. I'm using this period because many people believe that basketball was best during this era and more balanced and competitive.

1981

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Phoenix

CHAMPION: Boston

1982

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Los Angeles

1983

ATLANTIC: Philadelphia . . CENTRAL: Milwaukee . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Philadelphia

1984

ATLANTIC: Boston . . CENTRAL: Milwaukee . . MIDWEST: Utah . . WEST: Los Angeles

CHAMPION: Boston

1985

ATLANTIC: Boston . . CENTRAL: Milwaukee ( again ) . . MIDWEST: Denver . . WEST: Los Angeles

CHAMPION: Los Angeles

1986

ATLANTIC: Boston . . CENTRAL: Milwaukee ( 6th in a row ) . . MIDWEST: Houston . . WEST: Los Angeles

CHAMPION: Boston

1987

ATLANTIC: Boston . . CENTRAL: Atlanta . . MIDWEST: Dallas . . WEST: Los Angeles

CHAMPION: Los Angeles

1988

ATLANTIC: Boston . . CENTRAL: Detroit . . MIDWEST: Denver . . WEST: Los Angeles

CHAMPION: Los Angeles

1989

ATLANTIC: New York . . CENTRAL: Detroit . . MIDWEST: Utah . . WEST: Los Angeles

CHAMPION: Detroit

1990

ATLANTIC: Philadelphia . . CENTRAL: Detroit . . MIDWEST: San Antonio . . WEST: Los Angeles

CHAMPION: Detroit

Division Titles

Los Angeles - 9

Boston - 7

Milwaukee - 6

San Antonio - 4

Detroit - 3

Denver - 2

Utah - 2

Philadelphia - 2

Atlanta - 1

New York - 1

Houston - 1

Dallas - 1

Phoenix - 1

Question . . . was there parity back in the "Golden Age" of basketball in the 1980s?

- 13 teams win a division title ( 56.5% of teams . . 23 teams ) .. ( 52% of teams . . 25 teams )

- Lakers win 4 NBA Championships . . Boston 3 . . Detroit 2 . . Philly 1

*********************************

The NBA goes to 3 divisions starting with the 2004 - 05 season. Let's see what the division winner + NBA champion looks like now.

2005

ATLANTIC: Boston . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Seattle . . PACIFIC: Phoenix . . SOUTHWEST: San Antonio

CHAMPION: San Antonio

2006

ATLANTIC: New Jersey . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Denver . . PACIFIC: Phoenix . . SOUTHWEST: San Antonio

CHAMPION: Miami

2007

ATLANTIC: Toronto . . CENTRAL: Detroit . . SOUTHEAST: Miami . . NORTHWEST: Utah . . PACIFIC: Phoenix . . SOUTHWEST: Dallas

CHAMPION: San Antonio

2008

ATLANTIC: Boston . . CENTRAL: Detroit . . SOUTHEAST: Orlando . . NORTHWEST: Utah . . PACIFIC: Los Angeles . . SOUTHWEST: New Orleans

CHAMPION: Boston

2009

ATLANTIC: Boston . . CENTRAL: Cleveland . . SOUTHEAST: Orlando . . NORTHWEST: Denver . . PACIFIC: Los Angeles . . SOUTHWEST: San Antonio

CHAMPION: Los Angeles

2010

ATLANTIC: Boston . . CENTRAL: Cleveland . . SOUTHEAST: Orlando . . NORTHWEST: Denver . . PACIFIC: Los Angeles . . SOUTHWEST: Dallas

CHAMPION: Los Angeles

2011

ATLANTIC: Boston . . CENTRAL: Chicago . . SOUTHEAST: Miami . . NORTHWEST: Oklahoma City . . PACIFIC: Los Angeles . SOUTHWEST: San Antonio

CHAMPION: Dallas

Division Titles ( 7 year span . . 42 possible division titles to win )

Boston - 5

San Antonio - 4

Detroit - 4

Miami - 4

Phoenix - 4

Los Angeles - 3

Orlando - 3

Denver - 3

Dallas - 2

Cleveland - 2

Utah - 2

Oklahoma City - 1

New Orleans - 1

Toronto - 1

New Jersey - 1

Seattle - 1

Chicago - 1

- 17 different teams win a division within a 7 year span ( 56.7% of teams in the league )

- 5 different NBA Champions: San Antonio 2 . . Los Angeles 2 . . Boston 1 . . Miami 1 . . Dallas 1

**************************************

Old alignment

2005

ATLANTIC: Miami . . CENTRAL: Detroit . . MIDWEST: San Antonio . . PACIFIC: Phoenix

2006

ATLANTIC: Miami . . CENTRAL: Detroit . . MIDWEST: San Antonio . . PACIFIC: Phoenix

2007

ATLANTIC: Toronto . . CENTRAL: Detroit . . MIDWEST: Dallas . . PACIFIC: Phoenix

2008

ATLANTIC: Boston . . CENTRAL: Detroit . . MIDWEST: New Orleans . . PACIFIC: Los Angeles

2009

ATLANTIC: Boston . . CENTRAL: Cleveland . . MIDWEST: Denver . . PACIFIC: Los Angeles

2010

ATLANTIC: Orlando . . CENTRAL: Cleveland . . MIDWEST: Dallas . . PACIFIC: Los Angeles

2011

ATLANTIC: MIami . . CENTRAL: Chicago . . MIDWEST: San Antonio . . PACFIC: Los Angeles

Division titles ( old alignment - 28 possible division titles in 7 years )

Los Angeles - 4

Detroit - 4

Phoenix - 3

MIami - 3

San Antonio - 3

Boston - 2

Cleveland - 2

Dallas - 2

Denver - 1

New Orleans - 1

Orlando - 1

Toronto - 1

Chicago - 1

- 13 teams win division titles in 7 years ( 43.3% of teams in the league )

I'd hate for it to be complete parity. Parity means little to no greatness. I want to know who the best team is and not who the most lucky team is.

[Buzzard]

The way I read this is that the "cheaper" owner's want to penalize owner's who are willing to spend money for marginal players. In other words, each individual owner wants to penalize other owner's for spending above a threshold. However, each individual owner faces an incentive to sign a marginal player to improve their probability of winning a game. In stranger terms to most, this is cartel behavior of firms wanting to restrict quantity of other firms within the cartel while still trying to maximize their respective profits by producing more.

If this type of measure goes through, then quality of play goes down. As a consumer of basketball, I would prefer that quality does not go down. But hey, what I am but just a simple fan understanding the dynamics of the organization?

Kobe was reportedly offered 6.4 million last month to play in Italy. Do you think he would get less in the NBA if this proposal was approved by the players? If not, I do not see how quality of play goes down.

I think the big spenders want it just as badly as the cheap owners (your words not mine). It is simple finance/business for every owner involved. Cut labor cost to create and/or increase profits.

Its not the Dirks and Kobes who continue to perform at a high level that owners are so concerned with. But they are tired of spending the MLE or more on players like Dwight Gooden, Shaq, Jermaine Oneil, Gilbert Arenas, Rashard Lewis etc...Limit the contract lengths, Kobe and Dirk will still get theirs as long as they continue to perform. But four million or more a year is over kill for those who do not.

Quality of play will only suffer if players can make just as much overseas. 6.4 for Kobe; I do not think we need to worry about that happening.

[Buzzard]

You seem to gloss over the middling/lower end players. Superstars are not likely to earn as much money outside the NBA, but what about a Childress type player? Or would a Manu Ginobili be willing to take a risk signing in the US back in 2002 where he would see suppressed wages for the early years in the NBA with no guarantee that he would turn into a star and make as much money as he does now? That is where the quality of play goes down, not from the top producers.

I think Childress is making more now than what he is worth. And players like Manu would come if your idea of suppressed salaries is 10 million a year for a all star like Manu. Seriously if Kobe is only worth 6.4 in Italy, what would a young unproven Manu be worth there? I am not glossing over, just trying give my thoughts on the value of players worth in Europe vs their worth over here.

Childress got 10 million a year in Greece and his team jumped out of that bad contract as quickly as they could. Contracts are not fully guaranteed in Europe either. I think what the growth of European basketball has done is inadvertently shown NBA owners just how overpaid players in the NBA are to be honest.

Kobe made almost 25 million last season, yet he can only get 6.4 in Italy. I frankly do not see anything wrong if Kobe "only" makes 15 to 20 million if it helps other teams become more competitive both financially and sports wise. One other thing that bothers me is Derick Fisher. He is the voice of the Union, made millions off a bad business plan, and is a role player at best. He is another overpaid example of what owners are trying to steer away from. Is it any wonder he is also the one calling the owners liars?

I do not have the exact number of teams that owners claim lost money. But just as a hypothetical lets say 50%. Now how well do you think McDonald's franchise business would do if one of their key selling point was 50% of all our franchises made money last year?