$45 Million Hard Salary Cap Means Serious Trouble For The Knicks

As reported today by John Lombardo of SportingNews, the NBA has proposed a $45 million hard salary cap.

The details, spelled out in an April 26 memo issued by National Basketball Players Association Executive Director Billy Hunter, marks the league’s push for a major overhaul of the NBA’s economic model and emphasizes to players an aggressive bid to significantly slash costs and shorten contracts.

The memo’s most eye-popping element is the league’s proposed $45 million hard cap, which cuts the current $58 million soft cap by nearly 25 percent.

Hunter said in the memo that the NBA projects the $45 million hard cap number with a team’s total salary not to exceed the cap for any reason. The proposed hard cap as outlined by Hunter also would eliminate the current luxury tax provision, which penalizes teams with a dollar-for-dollar tax for the amount spent on player payroll exceeding the salary cap.

The proposed hard cap is something the NBA has never had under collective bargaining, but it has become a critical element to owners. This initial proposal, and its steep cut in player cap space, demonstrates a strong commitment by the owners to dramatically curtail player payrolls while also supporting NBA Commissioner David Stern’s mantra of making the league more profitable.

Basically what this means for the Knicks, a team with over $43 million on their books for Carmelo Anthony and Amar’e Stoudemire alone in 2012-13 (when the proposed plan would be expected to be in play), is a major problem. There’d be no chance of signing another marquee free agent, as the league looks to level the playing field among small and large market franchises. The financial model that’s been proposed is similar to the NFL, where each team’s destiny is fairly distributed into their own hands. In order for this to take place, current player’s contracts would have to be restructured and scaled back to put teams under the hard cap, but good luck sliding that by the Player’s Association. If this report is true, the union and the league are as far apart as humanly possible at the moment. The chances of a lockout are very, very high, and us, the fans, are the biggest losers.

Tags: David Stern

  • Ed

    If their is a change in the salary cap one of 2 things will take place

    A player with a MAX salary under the current rules would have their salary rolled back to the new MAX salary


    If a player has a MAX salary under the old rules they will have their salary’s grandfathered in and the salary dollars will only be counted as the new max salary number on the cap

    Example: Say the current MAX Salary is $20 Million a year and the new rules state the NEW MAX Salary is $15 Million a year, The Player would be Paid his $20 Million and only $15 will be counted against the cap

    It is not going to be OK Melo and Stat make $43 Million and the new cap is $45 Million, fill out the rest of your roster with $3 Million,

    Either their old Salary would be rolled back or grandfathered in to work under the new cap

    To go along with my previous example Stat and Melo Salary’s would add up to $30 Million under a $45 Million Cap leaving $15 Million for other Players

    ( I am rounding off the numbers in the examples to make it easier to explain )

    In Conclusion: Expect their to be games missed in the 2011-2012 NBA Season, the NBA is trying for an overhaul similar to what the NHL did

  • Michael Pina

    Great insight Ed. Much appreciated.