Report: Some owners pushing for hard cap style spending limit in CBA negotiations

NBA players back out
NBA players back out

If there is an NBA lockout next summer, it will be because of infighting among the NBA owners, not an owner vs. player disagreement.

At the urging of some owners, the NBA will propose a hard “upper spending limit” which could replace a luxury tax as part of the new Collective Bargaining Agreement (CBA), according to reports from Adrian Wojnarowski of ESPN and longtime NBA writer Marc Stein on substack (the Associated Press confirmed the news). While the language is different, that is a hard salary cap, something the NBA has never had.

That will be a non-starter with the players union, something their representatives expressed. From Stein’s newsletter:

League sources say that there is an increasing push from the various factions on the league/ownership side to push for a system closer to a true hard cap … with a twist. The current proposals, sources say, don’t actually call it a hard cap, since those words carry such a negative stigma.

“Upper Spending Limit,” I’m told, is the nomenclature in play…

“There will be a lockout,” one source from the players’ side told me, “before there’s a hard cap.”

Not all owners support this plan, according to the reports.

This news comes just about six weeks before the Dec. 15 deadline when either the players union or the NBA (at the vote of owners) can opt out of the current CBA, ending it next June 30 and potentially setting up a summer lockout (the CBA naturally expires in 2024). Negotiations on a new CBA have been ongoing for months between the league and NBPA, with hopes of reaching a deal on a new framework before the December deadline.

This move by some of the owners is not driven by fast-rising player salaries (the split of NBA revenues that goes to players is locked in and not expected to change in the new CBA) but rather by the desire of some owners to rein in the spending of other newer, richer owners willing to reach into their pockets and pay the current luxury tax.

For example, the Clippers — owned by former Microsoft executive Steve Ballmer, who is estimated to be worth more than $75 billion and is one of the 10 richest people on the planet — are poised to spend $144.7 million in luxury tax on top of $191.9 million in payroll this season, meaning a total of $336.6 million in salary and tax. The Warriors are expected to spend closer to $360 million in salary and tax this season, and the Nets are expected to be in the same ballpark. For comparison, the Atlanta Hawks are 15th in the NBA in salary this season at $148.5 million, a number that includes no luxury tax — Ballmer’s Clippers will more than double that spending once the tax is added.

After extending Jordan Poole and Andrew Wiggins, the Golden State payroll + luxury tax bill for the 2023-24 season is already at $483 million, and that is without Draymond Green opting in or reaching a new deal with the team, or filling in other roster spots, which would push the number north of $500 million. Again, the Clippers and Nets will be north of $350 million in a year the salary cap is expected to be $134 million (the luxury tax kicks in at $162 million).

It’s a shift in ownership seen in other sports, including the NFL. Long-time owners or family ownerships — such as the Buss family with the Los Angeles Lakers — often do not want or do not have the resources to spend at the same level as wildly richer billionaire owners entering the league now. Those new NBA owners are more willing to pay a luxury tax bill and not blink. Add in the top teams upgrading their training/workout facilities and the spending asked of NBA owners is rising fast. Don’t cry for these poor owners, they more than make up any money they lose if the fast-rising franchise values, but they have to pay a little more out of their pockets now.

The conventional wisdom has been there would be no NBA lockout because everyone — owners and players — are making too much money and they don’t want to kill the golden goose (so to speak). The money coming into the league is expected to spike with the new television/streaming deal coming in 2025, which is even more reason not to mess too much with the CBA. It’s why there is ultimately optimism this will be resolved without lost games.

But never underestimate the willingness of rich people to fight over money.

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