Nothin’ but Net: NBA’s TV deals bring money, potential problems

Philadelphia, PA (SportsNetwork.com) – When the NBA announced extensions with ESPN/ABC and TNT on Monday, minds began to wander.

First, the reported sum by the New York Times is $24 billion over the nine- year agreement. That number is so staggering it’s incomprehensible for us commoners to discuss rationally, but let’s try.

The major ramification, of course, deals with the salary cap. That number will rise from $63 million this season to somewhere close to $90 million when the deal begins prior to the 2016-17 season, as reported by CBS Sports.

That’s a Scott Bakula Quantum Leap in a short period of time, which means, smart teams have already been planning. The players have been. Why do you think LeBron James signed a two-year deal which expires in the summer of 2016? It seems pretty clear why LaMarcus Aldridge didn’t put pen to paper on his max deal with the Portland Trail Blazers though he absolutely intends to stay in the Rose City.

Also, Kevin Durant will be a free agent that same summer as LeBron, so hold on to your hats because these two are just a year and a half away from becoming the highest-paid professional athletes in the history of civilization.

It’s reasonable to think James might make $30 million per season. Oof. Durant won’t be far behind, especially if he stays in Oklahoma City, although he will be able to make more on the open market than before. There are whispers that when a new CBA is agreed upon, max contracts may be a thing of the past, like mail or basic cable.

In the short term, meaning this upcoming summer, no top-tier free agents will sign long-term, max-level contracts. They’ll go with short, possibly one-year deals knowing the pay day the following June will be astronomical.

“As we all know, certain agents and players have been timing their contracts so that they would become free agents in ’16-’17, knowing that we were going to be entering into new television agreements,” commissioner Adam Silver said at the announcement on Monday.

It makes you either appreciate what Carmelo Anthony did this summer, or classify him a dope. Anthony signed a max deal in the summer of 2014 with the Knicks and although he’ll still cause a huge hit on their cap, it could’ve much worse had he gone down the avenue James did.

“I never thought about it. I never thought about a two-year deal. I didn’t want to have to go back and do what I did this summer, not at all,” Anthony told the New York Daily News. “I signed my deal, I’m good, the organization is good. We moved forward and everybody is in a good place.”

Anthony valued security above all. It’s a decision for this summer’s free agent class, highlighted by Marc Gasol, Rajon Rondo and Kevin Love.

The Knicks will be in a great place. With Amare Stoudemire and Andrea Bargnani both coming off the books this summer, the Knicks will have buckets of cash to spend. They would have anyway prior to this TV deal being signed, but with the influx of cash, New York can probably add two or even three high-profile studs to go with Anthony in a high-profile market.

With this big cap number coming, almost every long-term deal currently on the books going through 2016 will look like a steal. This inflation will lead to gigantic numbers, so any contract you viewed as too high for a player of that caliber will seem reasonable in 2016.

What will be interesting is how this deal impacts the teams already armed with tons of cash under the cap. The Philadelphia 76ers could literally start a new team with their available money. The Orlando Magic, Atlanta Hawks, Milwaukee Bucks and Utah Jazz would fit this criteria as well. A team like the Charlotte Hornets that seems to be a playoff fixture might be in the best shape of all. Same goes for the Phoenix Suns. Both are teams on the rise who have managed their money better than most teams.

It will still come down to strong leadership for all NBA teams, but those that have money to spend can make quick strides. Super teams can easily be built. That’s the way the league has trended thanks to the Miami Heat. The question most of these lower-market squads faced was, “how can we get big name free agents to come here?” The answer now might be, “we can sign three huge names to start a dynasty together.”

That’s probably still not likely, since, as “Cheers” taught us, location, location, location make a huge difference. But, the Jazz, Magic and Sixers will provide free agents with a lot of options.

Same goes for cap-strapped teams now like the Brooklyn Nets or Los Angeles Clippers. The bump in cap will allow more flexibility, so the balance of power may not shift. The opportunity for it to shift at least will exist in the summer of 2016.

Basically, everyone will get rich. You’d think that would be a good thing universally, but when that much money is at stake, there will certainly be land mines, namely in the Collective Bargaining Agreement.

“There is a potential re-opener in three years, and I’m sure both sides will be studying the impacts of this new deal and seeking to ensure that it remains a fair deal for both sides,” said Silver.

Under the current CBA, the players get as much as 51 percent of revenue off the top. That percent was down from previous deals, so, the players could say, “we took a hit for the good of the game before, we’re not doing it again.” And, clearly, the state of the game is strong if the NBA is getting in excess of $24 billion over the next nine years. It’s strong for the players, too, who get 51 percent of this growing pot as well.

Or, could the owners say, “now that we have this huge revenue stream, let’s discuss a hard salary cap once again.” The union hated the idea, but when this cap reflects this new loot, maybe players will agree with caveats like no more individual max contracts.

Good luck to Michele Roberts, the new Players Association executive director, and Chris Paul, the union president. The Players Association needs a victory after getting slaughtered in 2011. Paul is sharp and James is very engaged in the process. When stars are educated on the business the way James is, or the way Paul is, it’s great for the union.

The owners basically got the players to agree to everything they wanted in the last negotiations because the owners cried poverty. The players needed to relent for the betterment of the game. That won’t happen again.

“The owners were telling us they were losing money. There’s no way they can sit in front of us and tell us that right now,” James said. “After we continue to see teams selling for billions of dollars … and now, Prokhorov is possibly selling his majority stake in the Nets for over a billion.

“That will not fly with us this time.”

Long story short, when this CBA can be reopened in 2017, there will be a lot of issues to iron out and that generally means a work stoppage. James sounded like a man on behalf of the union who won’t let the players cave this time. (James is not an officer in the union, nor is he the Cavaliers player’s rep – that is James Jones.)

These aren’t problems for us commoners. We just will have to pay more so that ESPN and TNT can find a way to pay James and Durant.

Categorized in: NBA