With all of the excitement from this year’s NBA free agency, I had a moment where I thought it would be cool to break down the Collective Bargaining Agreement (CBA) for the NBA. I wanted to get a real good sense of the salary cap, players contracts, etc. I got to the third paragraph of a simple CBA 101 doc from NBA.com and… well, take a read… it has a math problem.
The Salary Cap for each future season, subject to certain adjustments, will be calculated by multiplying projected “Basketball Related Income” (a defined term that generally includes all income received by teams as a result of basketball operations) by 44.74%, subtracting projected player benefits, and then dividing the result by 30.
I took a peek at some other parts, but look, doing the necessary research for a single post is time consuming (But I do want to direct a website that has 100+ FAQ posted). It would have taken an amazing amount of effort on my part and I just didn’t want to…. I mean how silly was it for me to think I could just casually peruse the CBA and come away with a solid understanding. But I do want to highlight some things.
- The NBA’s Revenue is growing
- The unofficial revenue for the 2015 season, which dictated the 2016 season, was approx. $5.87BN. Multiple all 5 billion by .4474 and divide it by 30 and you get roughly $63MM.
- It is projected that for he 2016 season it will be over $8BN. Meaning that the salary cap is $119MM – an 88% increase yoy.
- There are a lot of provisions that favor the home team and rewards loyalty
- See the Larry Bird Exception
- If you stick around long enough, the money gets better
- There is a lot to chew on with it’s own lexicon
- Check out http://www.spotrac.com/ and http://www.basketballinsiders.com/ for more on teams salaries and player contracts