Of NBA Free Agent Period Will Put Caps to Test
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CHICAGOLAWBULLETIN.COM TUESDAY, JUNE 19, 2018 ® Volume 164, No. 119 Serving Chicago’s legal community for 163 years Start of NBA free agent period will put caps to test uly 1 will mark a new fis - tive bargaining agreement, the supermax contract extension, se - cal year for the National salary cap is adjusted each year. curing Curry for the foreseeable Basketball Association Back in 2016, there was a record TIME-OUT future, but causing concerns and the official begin - high increase in the salary cap of over the effects of exercising the ning of free agency for more than $24 million. This led designated veteran player excep - Jthe 2018-19 NBA season. After to NBA teams having more fi - tion. four years in a row of the Golden nancial flexibility to enter into AMY N. For example: it will be unlikely State Warriors facing the Cleve - higher paying contracts with that the Warriors can keep their land Cavaliers in the NBA finals, players. The league’s salary cap SCHILLER dream team together indefinite - the pressure is rising for other has not had a comparable in - ly, because they won’t be able to teams to seize opportunities to crease since 2016. also offer Golden State’s other acquire top available talent and Generally speaking, teams are Amy N. Schiller is an attorney at well-deserving veterans, Klay create greater competition with - permitted to use up to 30 per - Schiller, DuCanto & Fleck LLP where Thompson and Draymond she practices family law with a strong in the league. cent of their cap space on an in - focus on property issues and the Green, supermax contracts As exhilarating as it is to watch dividual player. Thus, a player complex financial and custody matters if/when they are eligible in the Stephen Curry and Kevin Durant under a maximum salary con - facing professional athletes and future. sink threes, and to watch LeBron tract monopolizes between 25 to entertainers. She can be reached at Another issue is that teams James play basketball in general, 30 percent of his respective [email protected]. who offer a supermax contract NBA fans are longing for the for - team’s salary cap space. This using a designated veteran play - mation of another “dream team,” makes it difficult for any one have already played seven or er exception will likely trigger a or at least for another team to team to maintain multiple star eight years with the same team mandatory luxury tax. compete in the finals. players. continuously when their contract As a deterrent to keep teams Absent the unanticipated rise But, the NBA’s salary cap is extension is signed and have only from far exceeding the soft of an underdog team or player, “soft,” meaning that teams are one or two years remaining on salary cap using exceptions, the this is likely going to require ros - permitted to exceed the cap in their current contract. For the NBA imposes a tax upon teams ter changes involving the NBA’s certain circumstances. Under designated veteran player con - that exceed a predetermined tax top athletes. past labor agreements, and even tract, a player must have already level each year. The predeter - Although some of the league’s more so under the current played eight or nine years with mined tax level is an amount best players are technically free agreement (effective since last the same team continuously. higher than the soft cap. For ex - agents this year, including both July), teams may legally exceed The designated veteran player ample in 2017-18, the NBA salary James and Durant, Paul George, the league salary cap if a player criteria also includes the follow - cap was set at approximately $99 Chris Paul and DeMarcus or players qualify for one of ing requirement, which prevents million and the tax level was set Cousins, few teams will be able many exceptions. many athletes from ever becom - at approximately $119 million. to realistically acquire these The newest exceptions to the ing eligible: i) the player was The further the tax level is ex - players. Doing so would require cap were created under the 2017 named to the All-NBA first, sec - ceeded, the higher the tax rate. teams to free up significant agreement for Designated Veter - ond or third team or was named For teams that exceed the tax salary cap space by either selling an Players. Designated veteran defensive player of the year, in level multiple years in a row, the off or trading off players from player extensions and designated the immediately preceding sea - tax rate is even higher. their current rosters. Most veteran player contracts allow a son or in two seasons during the If the NBA puts so much ener - teams are already over the NBA’s player to be offered what is re - immediately preceding three gy into penalizing teams that ex - salary cap. ferred to as a “supermax con - seasons; or (ii) the player was ceed the soft cap, why not just Simply defined, a salary cap is tract.” Under a supermax named NBA MVP during one of keep it simple and implement a a limit on the total dollars each contract, a player can earn up to the immediately preceding three hard cap, like the NFL has? NBA team is permitted to spend on 35 percent of a team’s salary cap. seasons. Commissioner Adam Silver fears player contracts each year. Although supermax contracts The intention behind the des - that making cap changes to A primary reason for a salary now exist, they are difficult to ignated veteran player excep - achieve parity could lead to pari - cap is to prevent the wealthiest come by. This is because only the tions was to help smaller market ty of mediocrity. teams from trying to obtain all of team that drafted the player or teams keep their star players by Silver’s position definitely the best players by outspending traded for the player under his having the ability to offer them makes the idea of a hard cap the other teams. But, the actual rookie contract may offer him a more than other teams. We will sound unexciting. At least under impact of a salary cap will vary supermax deal. There are also eventually see whether these ex - the current soft cap structure, as depending upon a league’s specif - time and performance thresh - ceptions serve the intended pur - long as teams are creative, able ic regulations and whether there olds that must be met for super - pose. and willing to exceed the league’s are provisions in place which max contract eligibility. Last year, the league’s champi - cap, this offseason stands to be allow for the cap to be exceeded. For the designated veteran on team, the Golden State War - more eventful than the 2018 NBA Pursuant to the NBA’s collec - player extension, a player must riors, offered Curry the first finals. Copyright © 2018 Law Bulletin Media. All rights reserved. Reprinted with permission from Law Bulletin Media..