Why The Salary Cap Is So Low/GM's Upset About It

[Way Of The Ray <wayray@ix.netcom.com>]

Originally the cap was going to be around $32 million, which is 48.4% of
last
season's "basketball-related income", but then Stern got Hunter to lower
it
to $30 million, in return for artificially inflating next year's cap
limit to
$34 million...


          January 11, 1999

          $30 Million Cap Expected to Subdue Free-Agent Market


          By CHRIS BROUSSARD

          Team owners in the National Basketball Association
          may be celebrating the ratification of the new
          collective bargaining agreement, but some of their
          general managers are in mourning. After six months of
          planning strategy for a frenzied free-agent market,
          many team executives have been forced to scrap their
          plans because of the surprisingly low salary cap that
          Commissioner David Stern announced on Thursday.

          While most teams projected that the cap would rise to
          more than $32 million this season, Stern, with the
          agreement of the players' union, set it at $30 million.
          For many teams, that $2 million gap could mean the
          difference between signing an All-Star and settling for
          a solid starter, or between adding two top-notch
          players to a lineup or just one. Some teams could be
          left out of the game completely.

          "I think a lot of people were disappointed to see that
          number," said the Nets' president, Michael Rowe, whose
          team was not significantly affected. "If you've got
          plans to make a trade or whatever, it means that you're
          going to have to work a lot harder now."

          With nearly 200 free agents available and numerous
          teams with significant cap room, the rush for players
          was expected to be feverish. But the low cap, plus the
          new rules that limit maximum individual salaries, have
          most insiders predicting that many free agents will end
          up staying with their former teams.

          "It reduces some teams' flexibility and probably takes
          some of the sting out of the frenzy," said one Western
          Conference general manager, who spoke on condition of
          anonymity. "My reaction when I heard that the cap was
          only $30 million was, 'What?' After planning all year
          to have cap room, I don't like it at all. It screws up
          our plans a lot."

          Each year, the salary cap is set at 48.4 percent of the
          previous season's basketball-related income. Based on
          last season's figures, the cap should have been close
          to $32 million. But at Stern's urging, Billy Hunter,
          executive director of the players' union, consented to
          the $30 million cap when the two were putting the
          finishing touches on the new labor agreement last week.
          In return, the league agreed to preset next season's
          cap at $34 million, which is much higher than it would
          have been because of the shortened season.

          While the lower cap benefits owners, it hurts some
          teams that hoped to bid for the services of free-agent
          stars like Scottie Pippen, Jayson Williams, Rod
          Strickland, Antonio McDyess and Tom Gugliotta. Many
          clubs that thought they would have $8 million to spend
          are now down to $6 million, not enough to land most of
          the big names.

          "I would say that every team in this league that
          thought they could make moves had to re-evaluate when
          the cap came out," Nets Coach John Calipari said. "Even
          teams that thought they were going to make small moves.
          Everybody had to come up with a different plan of
          attack."

          One agent said that three general managers asked him to
          approach the union about petitioning to add $2.5
          million to the cap. "It's a monumental difference in
          the planning that many N.B.A. teams have been doing,"
          the agent said. "It hurts everybody, but it hurts the
          teams as much if not more than the players and agents
          because all of their planning is down the tubes in many
          cases."

          Of course, not everyone is complaining. Because of the
          Larry Bird exception rule, most of the upper-echelon
          free agents can be signed by their former teams for
          much more money than any competitor could offer. Even
          teams like Phoenix and Houston, which are still more
          than $11 million beneath the cap, may shy away from the
          most expensive players in order to split their money
          among two or three lesser players. In the end, it could
          all add up to little movement among the stars. The
          agent Bill Duffy summed up the situation when asked
          yesterday if the free-agent frenzy had started. "No,"
          he said. "And it won't start because of the $30 million
          cap."


                Copyright 1999 The New York Times Company