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Blazersedge Mailbag: The Cap, Tax, and Money Issues


I'm a little confused about the Blazers situation. I hear that our team can't afford to keep Brandon Roy plus Oden, Batum, etc. Yet the Miami Heat still exist, ESPN desperately wants Dwight Howard to go to LA, and Chris Paul is doing everything he can to go to New York. How can all these scenarios exist, with max-salary stars creating super teams, while a group like the Blazers cannot afford to hold their own core together?

Great question! You've actually answered most of it yourself.

The Miami Heat still exist, in part, because they existed before the new CBA. But even beyond that, remember that no agreement of any sort will stop a team from signing (and by extension affording) stars. The salaries that LeBron James and Dwyane Wade draw would be paid by any team in the league, even when they're playing together. The problem isn't that they're making so much, it's that there aren't enough players like that to go around.

This lack of true star power leads to the real league poison and the real need for the CBA restrictions: players who can't play like those superstars but still get paid like it. Any team could afford James, Wade, and Chris Bosh. No team in the league could afford Gilbert Arenas, Michael Redd, and Rashard Lewis. With the new luxury tax rules a franchise has to be ultra-careful about offering those enormous contracts to just anyone.

This is one of the differences between Portland's situation and Miami's. The Heat ended up paying established superstars with proven track records. The Blazers are speculating on younger talent. Miami can target 2-3 players with its money. The Blazers have to shotgun five or six, not knowing which ones will truly pan out. Now the numbers start adding up. The Heat have the luxury of paying $45 million to three players and $2-4 million per year to everyone else. The Blazers have to pay $40 million to three players and $30 million to three others and $5-6 million to a few more. Adding up the 12-15 man rosters Portland can easily end up paying more for speculative talent than the Heat pay for actual talent.

Also notice the teams you've mentioned. The Miami Heat have Wade and James while Chris Paul wants to go to the New York Knicks and ESPN wants Dwight Howard with the Los Angeles Lakers. Notice the commonality there? Or better yet, notice a distinct lack of Sacramentos, Utahs, and Minnesotas? Major markets with major TV deals and revenue streams can still afford to take a tax hit more than small-town teams. Anything short of complete revenue sharing--a virtual impossibility--will leave that situation intact.

Has anyone brought up the possibility of Roy taking a pay cut to stay in Portland? Is it even logistically possible to negotiate what he has into a shorter, incentive-laden contract? The team is highly motivated to keep him for a number of reasons (including loyalty and avoiding alienating the fan base), and I'd imagine he has some loyalty to the team as well as preserving self-interest. I'm not sure what the market for him will be like, but if he cuts his base salary while increasing incentives, I see everybody winning. The Blazers get to save the amnesty clause, have a chance to show loyalty to a guy who's done a ton for the team, as well as a chance to see what he has left. Roy gets an opportunity to make money and get healthier this year while reinventing himself as a player in a system he already knows, and basically to audition for the 2012/13 season. Thoughts?

Why in the world would he do that? He wasn't paid at anything near an All-NBA level when he was producing All-NBA numbers. This is the first contract where he's made anything at all relative to his star-level NBA peers. He can (justifiably) view the money as a lifetime achievement award, leveling out the years of low compensation no matter how he's able to perform now. The money is precisely the way the Blazers are "showing loyalty to a guy who's done a ton for the team". Also you'd need to talk to his agent who is due a huge chunk of change for negotiating that contract. I don't think he'd be really eager to give it back.

If Roy were a grizzled veteran on his last contract and last legs looking for a shot at a title with a contender we might be able to have this discussion. None of that applies here. Unless Brandon is some kind of altruistic (masochistic?) saint, he won't be giving up that contract anytime soon.

[Edit: Even if he could. Read the comments below for Storyteller's excellent explanation of the reasons this can't work, at least right now, under the new CBA.]

I was wondering how that bidding system would work. It just seems like the league is forcing a player waived from the amnesty to go to a team who bids the highest, almost like forced free-agency. Shouldn't the player have more free choice of where he ends up? Why would anybody in the players union agree to this forceful acquisition? Also, theoretically what if the highest bidding amount is for 4 million a year. Can a team above the salary cap counter the below cap team with the mid-level exception? It makes no sense if a team over the salary cap is willing to pay more for an amnesty player and still lose out to a team below the cap.

Your description is accurate as far as it goes. This is part of why it was better to be an owner than a player in this CBA fight. But you can also look at it like the player having had the free choice when his contract was up. He elected to sign a deal for X years and to be bound by that contract even if it was traded to another team. Technically he's still getting paid that contract money by his original team even if he's waived under amnesty. Other teams are bidding cash for the right to acquire him, almost like cash considerations in a normal trade. It's to the advantage of the original team to get as much in compensation as possible in any trade scenario...including this faux one. When you start to itch because it's not really a trade remember also that he's not really a free agent in the classic sense either, as he's still getting paid.

I happen to like this rule because it prevents a half-dozen decent players from taking one million dollar contracts to play in Miami. If there were no bidding and no "forced free agency" there's no incentive to pay these guys anything and no incentive for them to go to any lower-profile team. Even if the Warriors throw $6 million at the guy and the Lakers only $1 million the player doesn't see any difference so he just takes L.A.'s money. That seems to thwart the spirit of the game and its competition.

The way I understand it only teams under the cap can bid so exceptions wouldn't be an issue. The new over-the-cap exception is only $3 million per year anyway. I don't think a team that was a million under the cap could use its $5 million exception to bid on an amnestied player. I'm sure Storyteller will correct me if I'm wrong about that.

--Dave (