NBA's New TV Deal Creates Challenge of Mounting Tension for Adam Silver

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NBA's New TV Deal Creates Challenge of Mounting Tension for Adam Silver
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NEW YORK — The happiest news the NBA has produced this season may soon become the thorniest challenge of Adam Silver’s still-young commissionership.

You’ve heard the phrase “more money, more problems”?

Last fall, the league struck a $24 billion deal with its national broadcast partners, a mind-bending windfall that will benefit players and owners alike, starting in 2016. But in the NBA, these things are never so simple.

The dramatic revenue infusion will produce a likewise dramatic increase in the 2016 salary cap—a leap of $17 million to $24 million, by various team-produced projections—and that’s where the problems begin.

The cap for next season is projected to be $67 million.

One team expects it to rise to $84 million in 2016. Another team believes it will be closer to $91 million—with an additional leap to $127 million in 2017.

Team owners hate the idea of a $24 million, one-year leap. It’s unprecedented. It’s unsettling. It could mean all 30 teams will have cap room simultaneously. The market will be flooded with spending money.

Some agents and union officials refer to all of this, quite cheerfully, as “chaos.”

Chaos produces more competition for players. Chaos makes for a more vibrant free-agent market. Chaos produces higher salaries, especially for middle and lower-tier players.

For general managers—especially those on currently capped-out teams—it should be a boon, a chance to add major talent and reshape rosters. But for owners and league officials, it’s a big, scary mess. 

For players, it should be glorious. 

Brandon Dill/Associated Press

Big-market teams that were constrained by the 2011 labor deal will suddenly be liberated to spend wildly. Teams with two max players could add a third. Teams with three max players might add a fourth.

The new TV riches might well destroy the strides the league has made toward competitive balance—one of its primary goals in the 2011 lockout.

Really, no one knows what will happen for certain. It’s all a mystery, and that’s scary enough.

The league is worried enough that it proposed a solution: cap “smoothing,” in which the cap would be artificially held down in 2016, with larger increases delayed until future years. (The players would still get their guaranteed 50 percent share of basketball revenue—but through a massive check that the union would divide among its members, even while the cap was held down.)

But union chief Michele Roberts, with the backing of her members, shot down that proposal Friday, saying the players had no interest in the smoothing proposal. On Saturday, Silver simply shrugged and said he hoped it could be revived.

Susan Walsh/Associated Press

It seems unlikely.

This may be the first real snag in Silver’s brief tenure and the first test of his so-far boundless popularity with players.

In his first 12 months on the job, Silver engendered nothing but good feelings from his various constituencies.

He moved decisively and deftly to force out Clippers owner Donald Sterling after Sterling’s racist remarks became public last spring. He moved just as swiftly to make sure that Hawks owner Bruce Levenson put his team up for sale after his own racially charged marks were revealed last summer.

And of course, Silver negotiated that eye-popping TV deal, pleasing owners and players alike.

Along the way, Silver made several small but meaningful moves to address player concerns—chief among them, expanding the All-Star break to a full week, to give players, especially the All-Stars, more time to recover.

On Saturday, Silver unofficially kicked off his second year by pledging several more player-friendly initiatives, particularly with regard to the schedule. Silver wants to reduce the number of back-to-back games and wants to eliminate, if possible, the dreaded four-games-in-five-nights scenarios.

“It's a math formula at the end of the day, in terms of the number of days in the season and the number of games we play,” Silver said at his annual All-Star Weekend address. “But we think we can make a dramatic reduction there. And while I don't think we can completely eliminate four-out-of-five nights, we hope to make tremendous progress.”

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To meet these goals, Silver said it will require some flexibility from the league’s 29 arenas and from its national television partners.

“We hear everyone loud and clearly,” Silver said, “certainly our players and our teams, that there's nothing more important than the health and welfare of our players. And ultimately we want to see players getting appropriate rest and playing at the highest level.”

Silver said he would continue to push for draft lottery reform—desired by a majority of teams, to address “tanking” concerns—and would continue to study possible changes to the playoff format (to address the imbalance between East and West).

But, as ever, it’s the financial issues between players and owners that threaten to disrupt Silver’s extended honeymoon. The players have lavished Silver with praise for his open-mindedness and his collaborative approach. The cap-smoothing proposal is the first public sign of tension.

The union has suggested—though not formally proposed—an alternate smoothing strategy: that the league advance the new TV money by a year, to start bumping up the cap this summer, rather than artificially holding it down in 2016 and pushing back the increases.

When I raised that possibility in Saturday’s press conference, Silver dismissed it outright.

“We don't have the money to advance,” he said, noting that the billions from the new TV contract will not begin rolling in until 2016. “Maybe I'm missing something. When you say`advance it,’ what do you mean by that?”

But the concept isn’t as crazy as it sounds, and in fact many team executives across the league expected exactly this approach. As one team official texted Saturday, “Why doesn't the league smooth in starting in 2015-16? They know the money is coming in. That would make the most sense.”

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A second team executive concurred, noting that teams have already begun spending more anyway (on not only players, but coaches’ salaries), in anticipation of the new TV revenue.

The NBA’s board of governors is now stocked with billionaires. They can afford to spend the extra $10 million each, via a higher cap this summer, whether the TV money is there or not.

But that TV money is, in fact, guaranteed to come just a year later. Spending it in advance is no different than a rookie NBA player taking a line of credit to start spending his millions before his first paycheck arrives.

I made this analogy to Silver, who simply responded, “I guess so. It's not something we ever considered.”

So Silver and Roberts, the new respective leaders of the league and its players, have their first serious standoff, perhaps a preview of the potential labor battle to come in 2017.

For Silver, the honeymoon isn’t over yet. But the clock is ticking.

Howard Beck covers the NBA for Bleacher Report. Follow him on Twitter, @HowardBeck.

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