The NBA is potentially facing an interesting impasse over league’s push to include an “upper spending limit” – to prevent big market teams like the Los Angeles Clippers from bloating their payrolls while being able to live with the subsequent luxury tax penalties, which has been met with hard resistance from the NBPA.
As the both sides approach the December 15 deadline to opt out of the current collective bargaining agreement, longtime NBA insider Marc Stein reported in his Substack on Friday that the NBA is looking to get “closer to a true hard cap” in the next CBA, something that will surely be a no-go for the players’ union:
Full story: The NBA has been proposing something closer to a true hard cap -- what it terms an Upper Spending Limit -- in labor negotiations with the players' union --> https://t.co/CGC8P6hO5a— Marc Stein (@TheSteinLine) October 28, 2022
It’s clear that the players’ main concern is that, during a time where basketball franchises and owners are increasingly making more money than ever before, a hard cap would reduce the amount that trickles down to the talent that is actually leading to record TV deals and sale prices. On the other hand, the main concern for the NBA is parity, ensuring there is a spread of talent across the league and making the overall product of a higher quality. You would imagine the players wouldn’t necessarily be against that as a concept, but will clearly want to reach a different route of achieving it – one which, not unreasonably, doesn’t have an impact on their salaries.
The Clippers are a franchise that has profited from a padded payroll without needing to be too concerned about the luxury tax penalties they may accrue. The organization pays the most in salaries (roughly $192 million) and the second most in luxury tax (roughly $145 million) behind the Golden State Warriors. That has enabled them to sign the majority of their core to multi-year deals that reflect their contributions to the team in recent years and their potential in years to come. Alongside Steve Ballmer being the 12th richest human being in the world, according to Forbes, being located in a big market means they pull in more money from local/regional TV deals than smaller market teams can. Both those factors make luxury tax penalties are easier to stomach on the whole.
Ballmer has endeared himself to fans and players with his commitment to the Clippers, taking the time to not only immerse himself in the organization and the community that surrounds it, but also being such a vocal supporter from his courtside seat. Those aspects are something any NBA fan could get behind and want for themselves too. What people outside the franchise may disapprove of more is the former Microsoft CEO’s commitment financially, especially owners of other teams who can’t or won’t invest more of their money. This could simply be a way of those figures protecting themselves from that by capping what big spenders like Ballmer can get away with.
An upper spending limit would, at least in theory, mean the Clippers would have to scale back from their free-spending ways. The front office has been able to construct a roster that is one of, if not the, deepest in the league without having any of their players on veteran minimum contracts. From one through 12, it may well be the strongest squad in basketball.
However, if the league doesn’t think that has been built upon a level playing field, they may just have to cut that number down, which not only impacts Ty Lue’s pool of players to pick from, but could also impact the size of the rotations he chooses to roll with. Given how much we as fans have grown to love this current group, the idea that we’d have to say goodbye to any of them would be tough to accept, but may well be the right decision in the interest of leaguewide parity.
One of the big problems with the spending limit lies within those details. The Clippers are a rarity for having none of their guys currently on a vet minimum, and any upper limit would impact the kind of money players can get paid at that lower level anyway. The idea that the owners will be able to continue exponentially maximizing their profits with no restrictions, while the talent will be further restricted in terms of what they can earn on their given teams is one that would cause understandable resistance by the players. T
he current system helps the biggest stars get paid more of course, but that also sets the market for others throughout the NBA. It’s why Kawhi Leonard and Paul George can get the max while seven of their teammates still collect eight-figure salaries of their own.
The idea of parity shouldn’t scare the Clippers organization or its fans, but an upper spending limit — especially one in which doubts remain about whether it would even establish the playing field the league believes it would — could have a dramatic effect on the depth of their roster and the success they hope having so much talent could bring.
Ultimately though, we want our favorite players to be happy, healthy and getting paid the money that their talents deserve relative to the money they bring into the NBA by making the product as good as it is. It’s for that reason you’d hope both sides can come to an agreement that suits everybody with no disruption to the game itself.