The NBA is pursuing a league-wide hard cap as part of the next Collective Bargaining Agreement, according to Adrian Wojnarowski at ESPN and Marc Stein at Substack. However, the idea is viewed as essentially a non-starter by the National Basketball Players Association, per Wojnarowski and Stein.
“There will be a lockout before there’s a hard cap,” a source from the players’ side told Stein.
Currently, individual teams can hard-cap themselves if they acquire a player via sign-and-trade, use their bi-annual exception, or use more than the taxpayer portion of the mid-level exception, as we outline in our glossary entry.
In that scenario, the team are prohibited from surpassing the threshold known as the “tax apron,” which is several million dollars above the luxury tax line. In 2022/23, the tax apron is $156,983,000, while the tax line is $150,267,000.
[RELATED: NBA Teams With Hard Caps For 2022/23]
However, teams that only use the taxpayer portion of the MLE – and don’t acquire a player via sign-and-trade or the BAE – technically have no limit on how much they can spend on payroll. A club faces increasingly punitive luxury tax penalties the further its team salary goes beyond the tax line, but as long as ownership is willing to pay those penalties, there’s no spending limit.
The league is looking to change that by essentially replacing the current luxury tax system with a hard cap for all teams. According to Stein, the NBA is referring to the concept as the “upper spending limit” (USL) in an attempt to avoid the stigma associated with the term “hard cap.”
As Wojnarowski explains, the NBA believes that the current system creates imbalance by allowing for such a disparity between the league’s highest- and lowest-spending teams — the thinking is that a hard limit would help even the playing field, with the league arguing that a more competitive field would result in higher revenues.
According to both Stein and Wojnarowski, support for the idea isn’t unanimous among the NBA’s 30 teams. Some are concerned that an “upper spending limit” would prevent teams from keeping well-constructed rosters together long-term, even if team ownership is willing to pay a luxury tax penalty to avoid breaking them up.
As Stein observes, the Warriors‘ ever-growing payroll is considered a major factor in spurring these discussions. After paying a record-setting $170MM+ in tax penalties last season, Golden State is on pace to break that record in 2022/23 and shatter it again in ’23/24.
While the divide between the NBA and NBPA on the issue of a hard cap is ominous, Wojnarowski points out that the two sides often use the early stages of CBA negotiations to “float wish lists.” It’s possible that the league doesn’t seriously expect to get the players union’s approval for this concept and will ultimately relent, perhaps if the union agrees to give ground on another issue.
The league’s current Collective Bargaining Agreement runs through the 2023/24 season, but the NBA and NBPA each have the ability to opt out by December 15 of this year. If one side opts out, the CBA would instead expire on June 30, 2023. The two sides’ goal is to reach an agreement sometime in the next month-and-a-half.
Here are a few other points of emphasis for the NBA in the early stages of CBA negotiations, according to Wojnarowski:
- Finding a way to incentivize top players to sit out fewer regular season games.
- Working out a cap “smoothing” plan in advance of the NBA’s next television deal to avoid another big single-year spike like the one that occurred in 2016.
- Instituting rules that prevent agents from picking and choosing the teams to whom they supply a prospect’s physical and medical information during the pre-draft process.
- Implementing some “minimal requirements” related to participation and presence in the draft combine for top prospects.
Hale no to a hard cap! If anyone should make less money it’s most definitely the owners not the players ! The system isn’t broken at all and nobody really has a right to disagree there
They should change it to where if you draft a player only a portion of his salary would go against the cap and all free agents 100% counts! And remember Warriors are not in a Big Market like New York or LA! Forbes 7.1b evaluation came from drafting and winning. Not where they are located. Just sayin
Only player of their starters that was not drafted is Wiggins. Almost the whole team is drafted players. Its a shame those teams that draft bad are complaining.
I would be okay with a temp cap on teams that overspend multiple years in a row. The Warriors are ridiculous with their spending habits. But a hard cap? Nah fam.
But the warriors are only spending on players they’ve developed and drafted, except for Wiggins. Why should they be punished but a team like Brooklyn or Lakers it’s ok?
They’d get the same punishment as the Nets and Lakers. They’ve overspent a shitton too.
Eon, what’s “ridiculous” is when fans lose their favorite players because owners of their favorite teams won’t spend $ to keep those favorite players. And the league, and you, promote this problem. That’s what is ridiculous. Tball referenced the Nets and Lakers because Irving, Durant, Simmons and James, Davis and Westbrook bolted from teams. To say those teams should be penalized equal to the Warriors is whats “ridiculous”
Exactly. Maybe you do some slight tweaking there, but teams should be rewarded for drafted and developed players.
Funny when it benefited teams during the 80s and 90s it was OK but now its a problem. So if a team builds through the draft they should be penalized?
Top players would be incentivized to play more regular season games if the regular season meant more. Obviously, Silver won’t go there.
Not sure what the big deal is about a hard cap from either side. It has no effect on player salaries, at least collectively. From the teams’ standpoint, the current luxury tax is already effective, IMO, at creating a limit on a team’s total payroll as the tax becomes prohibitive at a certain point (although that point my differ for different teams in different years). If the tax rates are still too low for some, then increase them; it’s with like effect as a hard cap and more sellable.
The revisions regarding the draft make sense and are overdue. Getting them in place prior to allowing kids to be drafted right out of high school should be a priority.
Because the clippers and Nets have been doing so much winning…gotta keep them from wasting their own money!
It’ll never come to pass because if you went further into the article, it mentions that the luxury tax payments would have to be changed and the owners happy to pocket those luxury tax payments will be opposed as well.
Jeanie Buss-and the other ‘poorer’ owners-are weeping into their Mimosas at the thunderous scoffing by the Players Association as regards a hard-cap: it’d be cool if during face-to-face negotiations, someone wadded up the proposal and sent it ringing in to a distant wastebasket and said, “Now THAT’S how you shoot from downtown, Ms. Buss…”
Would a hard cap bring more parity? I have heard arguments both ways. If anyone can explain this I’d love to hear it.
A hard Cap would be great. It will stop teams from handing out max money to B or C level players. Which is what paralyze franchises.
Except that’s exactly why the NBPA would never go for it.
Get rid of the salary cap
Incredibly flawed proposal that is just meant to be shot down at this early stage. Something along these lines comes up every time the CBA has to be re-negotiated.
The only way this would ever really flatten competition is if it were implemented at the ‘net’ salary level (so that Texas doesn’t have en edge over say Minnesota), but that will never happen. Also, teams shouldn’t be penalized for drafting well.
Better to adjust and tighten the hard cap rules than institute a full hard cap. There are ways.
Wow. Basically every commenters is against the league becoming FAIR with a hard cap? Most people who comment here seem to be in favor of stopping teams from tanking yet you don’t want to make the league FAIR with a hard cap? Probably mostly fans of teams who overspend here but wow, lots of people against making the league fair.