CBA Deal Done

Kurt —  June 21, 2005

Update: I just saw this on ESPN about the new CBA:

Each team will be given a one-time option this summer to waive one player from its roster and receive luxury tax relief. The team will still have to pay the player and his salary will still count against the cap, but the team won’t have to pay a luxury tax on his salary.

That means that the Lakers can waive Brian Grant, who no team will take, then will not have to pay luxury tax on his $14 million. That will help keep the Lakers under the tax threshold and may free them to go after free agents. Now, back to the regularly scheduled post…..

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ESPN is reporting that there will be a press conference today announcing a new deal between the players and owners that will avoid a lockout. Even better for us here in Southern California, it means that the Summer Pro League will go on as scheduled.

Yesterday I linked to a story from Dan Rosenbaum about the CBA negotiations — he updated that on his own site with some thoughts on the proposed agreement (as presented by ESPN.com), here are some highlights:

The deal that Chad Ford is outlining, in my opinion, is a big, big win for the union. It appears much more favorable to the players than the current collective bargaining agreement and the deal I propose in this piece.

If this pretty much is the current outline for the next deal, I would expect an explosive free agent market this summer. Teams should expect to pay substantially more for free agents than they did in the last few summers. The higher salary cap will result in more teams having more room under the salary cap and the change in how luxury and escrow taxes are distributed will greatly lessen the effect of luxury taxes on spending.

Luxury and escrow tax distributions are equal for all 30 teams. There also is no “super” tax on high-spending teams. This is a huge concession by the owners. The distribution scheme in the current deal arguably reduced team spending more than the luxury tax itself did. Without the 300 or 400 percent effective tax rate on team salary just above the luxury tax threshold, teams will be more willing to pay the luxury tax. The league must have given in on this point due to pressure from its teams.

The new salary cap will be in the $50 million range. The Lakers already have $64.3 million in salary committed for next year (that number includes the $5 million for Divac that is unlikely to be paid in full and no money for Luke Walton or draft picks). If this is going to be an aggressive free agent market it will make it that much harder for the Lakers to make a run at players we may want but now will be overpaid. We will have to see how the new CBA affects Dr. Buss’s willingness to go over the luxury tax threshold to bring in players. Rosenbaum suggests that owners such as Buss may be more willing, but we shall see.

Kurt

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