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The Limitations of NBA Salary Cap Balance

A reader suggests a tweak to the salary cap system. We explain why it likely wouldn’t fly.

Portland Trail Blazers v Los Angeles Lakers Photo by Jim Poorten/NBAE via Getty Images

The Portland Trail Blazers are one of several smaller-market NBA teams. From the perspective of their fans, this brings an inherent disadvantage compared to their large-market cousins. Could the Blazers and other small-market franchises get a boost if the league tweaked the salary cap system? That’s the subject of today’s Blazer’s Edge Mailbag.

Dave,

The era of super teams has hurt team identities, small market teams and the NBA as a leagues overall product. The teams of the 90’s all had identities .... easy for me to think of the key players on the Jazz, Suns, Sonics, Blazers, Spurs, Rockets, Kings, Golden State just to think through the west and I remember intense rivalries. It was a better product when pieces were only moved on the edges...like adding Buck Williams to a core of Terry, Clyde, Kersey and Duck. The team had an identity for years. What will happen to the fan bases of Memphis if Ja leaves Minnesota when they get nothing for KAT or Utah when Mitchell moves on. Empty arenas, that’s my hunch.

My fix. If you draft a guy when he renews his contract only 75% of his salary goes towards the salary cap, or 75% for the highest paid player and goes up by a couple percent as you go down player salaries on the roster. Players can still go and try to form super teams but its going to cost them and the organization to do that. Overall teams would have better continuity, rivalries would be renewed and the league might win some of its fans back.

That’s my fix. What is yours?

Coach Wehrley

I think your solution might work. But they’d never implement it practically for a few reasons. It all hinges around what the salary cap is for.

The main selling point of the cap, publicly, is to maintain competitive balance. That’s the same thing as saying the purpose of that super-absorbent cloth infomercial is to make sure you have the cleanest counters possible. Yes, that’s the hopeful endpoint, but that commercial is there to move the product regardless.

The NBA salary cap probably helps competitive balance. As you’ve identified, it doesn’t work perfectly. There may be ways to do it better, especially if you look from the perspective of small-market teams. The cap doesn’t account for the six-foot-long party sub local television contract held by the Los Angeles Lakers versus the “PB&J on Wonder Bread” equivalent for the Trail Blazers and Jazz. Even though they operate under the same rules officially, all that extra money coming in allows L.A. to be more cavalier with their cap-and-tax spending than the Oregon and Utah teams can be.

Those concerns are secondary to most NBA owners. The perception of equity—or the potential for same—is enough. As long as fans buy the pitch, imperfections are permissible.

Side Note: This is one reason that complaining about your local GM is a cottage industry. I’m not sure the league would view that as completely negative. If we keep alive the idea that everything is equally balanced, and the smart/dumb decisions of your executive determine success, we don’t look at systemic issues as much. In reality, GM’s in Milwaukee and Cleveland have to make fewer mistakes and squeeze more out of their resources than their counterparts in New York.

Preserving the illusion of balance is only one of the purposes of the cap, though. The others are business-related. Fixing labor costs is a huge aspect of the process. Even if the price tag is high, knowing how much you’re going to have to spend, give or take a percentage, helps in operations and in prospective sales. The cap also keeps rogue (read: new) owners from breaking the system, forcing everyone else to inflate their expenses to match or face criticism for not doing so.

Those reasons alone would prevent owners from voting for extra cap exceptions like you propose, even if those exceptions brought better balance. There’s no guarantee that the extra money spent would move a team up the pecking order, particularly if a wide range of franchises had access to the same mechanism. From their point of view, it’s spending guaranteed extra labor dollars for speculative return.

The other thing is, the league doesn’t necessarily want perfect balance. The Lakers are the Lakers for a reason. They’re a marquee franchise, bringing in lots of attention and huge dollars. They do that by being better than everyone else. When that can’t happen organically—say, because they sign an overpriced, ex-All-Star point guard who fits with their team like a toothpaste and orange juice smoothie—they at least get to be first in line at reforming and improving their situation. They use the extra money to make money. Their visibility makes the league more noticeable and, thus, its franchises correspondingly more valuable.

The loss of dollars and prestige by making the Lakers look indistinguishable from the Kings and Timberwolves wouldn’t be made up by Minnesota’s and Sacramento’s chance to win a title. L.A. in a mediocre state will draw more dollars and attention than Minnesota with a title. That’s good for the league and its owners. That’s why the system will feed the big dog first, then make sure nobody else starves. They’re not going to put in measures that reverse direction too sharply.

That’s not to say the cap is useless. It does bring better balance than a cap-free league would experience. But the system provides for intentional limitations on that balance because, in the end, it’s neither the sole priority of the system nor the most important.

Thanks, Coach! All of you can send your questions to blazersub@gmail.com!